BEEF prices have hit an all-time high and “cautious optimism” is the outlook, according to EBLEX.
But only a few months ago, beef farmers were in despair – and some are not convinced they will not be back there soon.
EBLEX, the government body which gets the levies on farmers’ sales of beef and lamb sales, said in a summary of its latest half-yearly report: “With finished cattle prices reaching an all-time high of comfortably over 300p/kg deadweight this summer and the cull cow trade showing similarly unparalleled strength, cautious optimism is the tone of the latest market outlook.”
Debbie Butcher, senior market analyst for EBLEX, said a number of factors were likely to mean there would be no boom in supply to meet the new prices and added: “With no additional supplies anticipated from Ireland or South America, imported beef volumes are expected to be below 2010 levels in both 2011 and 2012. Equally, continuing firm demand from the continent for manufacturing beef, in particular, is predicted to markedly raise export levels, compensating for any slowing of domestic consumer demand as a result of current austerity measures and inflation levels.”
Richard Tasker, speaking for auctioneers Stephenson & Son at York Mart, said: “It is true we are seeing records tumble on almost a weekly basis. But whether that means the farmers are now making a profit I don’t know, because the whole livestock industry has a problem with feed costs.”
He said the shake-out in dairy had had an effect, by cutting the supply of cheap bull calves available for fattening. And culling for TB, in the south and west, was another significant factor in the squeezing of supply.
He said the 300p a kilo deadweight figure from EBLEX had already been well overtaken.
Tony Thompson, auctioneer at Thirsk, agreed. He said he had just seen heavy heifers selling for 201.6p/kg liveweight – the equivalent of 336p/kg deadweight. And good animals were selling for considerably more.
One factor, he understood, was that abattoirs were getting money for hides and offal which were worthless a year ago.
Farmer and abattoir owner John Penny of Rawdon, near Leeds, said the prices of the “fifth quarter” were irrelevant ... “The reason for better meat prices is farmers driven out of business by imports and low prices in the past.”
But Kim Haywood, director of the National Beef Association, said there was a new export market for hides and offal but the money was being used to subsidise supermarket prices rather than being returned to the farmer.
She said: “Even at £3 a kilo deadweight you are 50p short of the cost of rearing.”
A small producer of ‘traditional beef’ said: “With diesel up 40 per cent and other inputs coming close to that, I doubt if anybody is suddenly making more money. We are just turning over more for the same margin per head. And I worry about where it is all going. Beef and lamb are now ridiculously dear.”
NBA BLAMES BANK CAUTION
BANK caution is squeezing production, says the National Beef Association. Director Kim Haywood said: “Banks appear either not to understand the urgent need for beef farmers to secure credit that reflects recent leaps in the value of store and breeding stock or their priority continues to be focused on the restoration of their balance sheet reserves instead of constructive lending.
“Turnover on a cattle farm is 20-30 per cent higher than it was but regular borrowing limits have not been raised to match it.”