Shortages in Scottish cattle trade driving up prices to all-time high
Rog Wood THIS is the time of year when beef farmers wean their calves and sell them at special sales of “suckled calves”, and prices for such animals are running at an all-time high. Auctioneers Lawrie and Symington recorded their dearest trade ever at its suckled calve sale in Lanark last Tuesday when the overall average price rose by a staggering £185.88 per head on the year for the 2000 it sold.
A decent bullock calve at Lanark would have set you back by more than £1000, while a breeder selling 50-orso calves would have gone home with a cheque roughly £10,000 bigger than last year’s.
While those farmers who buy cattle for fattening tend to pay a premium for suckled calves, the price of young, half-grown cattle, or stores as we call them is also running at an all-time high.
My father used to say: “That when things become dear, everyone wants them”. He also used to wryly add the cautionary comment that: “Anyfool can run and buy, but a wise man remembers that he has to stand to sell.”
All this hectic bidding is being driven by a number of factors, but scarcity is the main one.
Despite the substantial premiums paid by consumers for Scotch beef, Scottish beef farmers are keeping less beef cows in response to poor or non-existent returns. Year after year, official statistics showthat the average breeder of beef cattle loses money, and if it weren’t for subsidies they would not be able to make a living.
In Scotland the number of beef cows peaked at 550,300 in 1975, but that figure is now below 450,000. Worse, there are lots of stories of disillusioned producers who are currently in the process of selling their entire breeding herd – so the national herd l ooks set to continue contracting.
Another feature of the Scottish cattle trade is the increasing number of buyers from England and Wales who travel north to bid for our stores and suckled calves. They are buying significant numbers of Scottish cattle because of their high health status, and, more importantly, because Scotland is officially free of bovine TB – a dreadful disease that is rife south of the Border. Shortages of beef throughout Europe has driven up the price of prime cattle. The top-priced bullock at last week’s sale of prime stock in Ayr was £1572, while heifers sold for £1419.
Those prices are not unusual and quality, heavy cattle regularly fetch much more. So, while it may seem madness to spend more than £1000 buying bullock calves, finishers can clearly see that there is a good margin to be made from fattening them.
Not only are buyers confident that beef shortages will keep up the price of prime cattle, they also know that the cost of feeding them this winter will be much less than last year.
The unusually wet weather last autumn prevented arable farmers from sowing the usual area of winter wheat. As a result, they sowed a much greater area than usual of barley in the spring. The net effect is that there has been a bumper crop of barley this autumn. That has undermined the usual premiums paid by distillers, and led to the market for feed grain becoming oversupplied and depressed.
Harvests around the world are also predicted to be better this year, and imported animal feed is already cheaper. The old adage, “Downcorn, up horn” springs to mind – meaning that instead of selling onto a depressed market, farmers feed their poorer quality, lowpriced grain to cattle and convert it into valuable beef.
As the debate over reforms of the Common Agricultural Policy has unfolded in recent months, some have argued strongly f or increased payments from the Scottish Beef Calf Scheme to encourage farmers to keep more beef cows. It’s a scheme that offers various levels of subsidies on beef calves, and is worth about £25 million this year to Scotland’s 7500 beef producers.
I personally believe that even if those payments rose by 50%, which is unlikely, it still wouldn’t be enough to make much of a difference.
Sustained, clear market signals like the current price for beef is a surer way to maintain or even increase the national herd of beef cows.
The only cloud on the horizon is the possibility of increased imports of cheap beef from Brazil bursting the current price bubble.