Eddie Gillanders: Breeders selling store cattle are deserving of the current high prices
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WHAT’S happening in the beef market?
Store cattle prices have soared by more than £100 a head since the New Year – and are up £120-£150 on this time last year – and prices at Aberdeen and Northern Marts’ weekly sale at Thainstone were up again in a remarkable trade, the dearest, in relative terms, one auctioneer told me he has ever seen.
The store cattle trade, of course has always been a bit of a mystery to most of us, unless you’re actually in the business buying or selling, but there seems little rhyme or reason to the current spurt in prices.
Any attempt to rashionalise the market is almost impossible except to say we’ve seen it all before and the finishers who buy the stores are born optimists but they’re not daft.
The first thing to say is that those breeders selling the stores need – and deserve – the higher prices.
Latest figures from Anderson Consultancy’s annual analysis of farm incomes show that the income of hill and upland farms has been trailing behind farmers involved in other sectors of the market.
But we’re supposed to be a hair’s breadth away from economic recession.
Everyone is facing higher costs and many on lower incomes, we are constantly told, are struggling to feed their families and resorting to food banks, never mind being able to afford beef.
Others, but fortunately not very many, are following the fashionable trend and turning to plant-based meat substitutes.
And there’s a constant barrage of adverse and misguided publicity against meat eating on health grounds.
The other side of the coin is that finishers who are mostly on lowground arable farms have had two very profitable years as a result of two good harvests, both before being hit by higher fertiliser prices, as well as steady prices for finished cattle.
But there is another reason for the current confidence, and perhaps the most potent one
Buyers from the north of England are flocking to Thainstone and other Scottish marts to buy store cattle because of the premium they can get selling finished cattle to smaller abattoirs in their own area who can get a better price – as much as 10p/kg deadweight - supplying local independent butchers rather than depending on supermarkets as we do in Scotland.
So what has happened to the premium for Scotch beef?
It’s not there any more because our big meat companies are so dependent on their supermarket customers who are hell-bent on keeping prices to the consumer down.
So what are Scotland red meat promotional body, Quality Meat Scotland, doing about it, farmers are asking? Not a lot they can do except keep beating the drum about the high quality of Scotch beef. The market talks.
Beef prices may be on a high but that hasn’t yet halted the decline in the national beef herd in Scotland.
The recent survey by NFU Scotland indicated that beef cow numbers have fallen by another four per cent last year, on top of 12 per cent over the previous 10 years, and now stand at a total of 413,000 cows.
In some cases, cows are being replaced by sheep which has been confirmed by a two per cent increase in the national sheep flock last year which has risen to 2.57 million ewes.
“The intentions survey has provided a great base of evidence, particularly for our beef and sheep sectors,” said livestock committee chairman, Hugh Fraser, from Scaniport, Inverness.
“For far too long, we have anecdotally discussed the decline in beef cow numbers in Scotland.
“These results highlight the scale and depleting confidence levels of farmers who produce beef.”
Mr Fraser makes the point that livestock businesses are unique in that business decisions have to be made two or three years before any return is seen.
“That is why it’s imperative that the industry is given support and clarity from the Scottish Government on the future so that we can confidently invest in our farms,” said Mr Fraser.
“The results highlight how farmers are proactive, innovative and willing to adapt to provide high quality, sustainable red meat if given the support and fair returns from the supply chain.”
The survey indicated that 26 of the 339 beef farmers who responded are planning to cease production while others are cutting back on cow numbers.
Only 10 of the 290 sheep farmers who responded are planning to stop but 50 per cent plan to maintain ewe numbers and 30 per cent said they were looking to increase their flock size.
