Survival Of Suckler Herd Down To Retailers

UK - Cattle currently moving through the beef production chain are already being sold onto a market which is becoming increasingly nervous about the impact of shorter food supplies and soaring world prices.

8 March 2011

3 minute read

Europe

The National Beef Association believes retailers still have to show they are aware that old rule books are about to be torn up – and seek out ways of maintaining UK cattle numbers over a period of global and domestic supply trauma.

“Beef cannot be produced in the UK at current volumes in future unless there is a quantum leap in farm income – and all the signposts, on every trading stage, are already saying the world has no spare beef while at the same time it is abundantly clear that more people will be demanding to eat it globally with every year that passes,” points out NBA director, Kim Haywood.

“This Association has for years warned that corporate myopia over persistent in store under-pricing could result in the domestic beef industry being almost totally dismantled if the majority of farmers are forced, through persistent loss making, to give up production.”

“That time has arrived at almost exactly the same time that surplus beef on the world market has vanished. So if retailers do not move quickly, and accept there has to be an immediate, and dramatic, lift in ex-farm cattle prices, they will either have to manage their businesses without beef or assist, later, in the re-construction of a domestic production chain that has been unnecessarily dismantled.”

The NBA is certain that the 37.5 per cent hike in farm fuel costs over the last 12 months, coupled with a doubling in world wheat prices and a 50.7 per cent lift in gas values (which govern compound fertiliser prices) will persuade hundreds, if not thousands, of previously hesitant suckled calf breeders, and finishers, to throw in the towel.

“A critical point has been reached. Breeders, almost to a man, are saying they cannot continue unless they earn more from the market and finishers have made it clear that unless slaughter cattle prices rise dramatically they will not be able to pay more for suckled calves and store cattle,” explained Ms Haywood.

“This year will be a turning point. Tightening world, EU, and domestic supplies mean cull cows are averaging 200p a kilo and relatively ordinary beef cows are making £800 a head.”

“The Argentine breeding herd has already all but disappeared because breeders were unable to resist the temptation to cash in loss making females and it has just been confirmed that in January there was a 44 per cent, year on year, leap in British cull cow disposals.”

“This justifies fears that if there are no radical improvements in domestic prices a huge proportion of the UK’s breeding herd will take the same route as the Argentine herd already has done, and be sent to the abattoir and not to the bull this summer.”