December 2004

CAP reforms cast some uncertainty over beef sales

While autumn pedigree beef sales continued to reflect the seasonal changes in calving patterns, prospects for spring sales are likely to be less certain with CAP reforms kicking in from January 2005.

With support payments shifting away from production, a key factor in how well pedigree cattle sell in the future is likely to be the price of the end product - finished beef.

The National Beef Association has voiced warning calls that if the supermarkets are not prepared to pay more for home-produced beef then the UK market could face a decline.

Over the last three months the price of finished beef has fallen back by about 10p per deadweight kg to 180p but this has been influenced by finishers wanting to claim slaughter premium before the scheme ends. "We're anticipating trade to be in line with previous years for the pedigree sales at Borderway and Bristol in February and March but at this moment we don't know what the real effects CAP reform will have," said David Pritchard, Harrison & Hetherington's operations director. "The general view is that we may not see any dramatic change in 2005 as the stocking densities have not changed and on this basis we don't know all the answers yet. "Autumn sales have been as expected following changing calving patterns from autumn to spring calving and buyers have been selective, prepared to pay high prices for quality animals which in turn has reduced the demand for large numbers of bulls."

Sales of pedigree breeding females have attracted a huge interest during the autumn sales, with Charolais and Belgian Blues being in particular demand, Limousin herd production sales have also attracted high prices and traditional breeds including Welsh Blacks and Galloways achieved good prices and clearances.

Pedigree auctioneer and farmstock sales and marketing director David Thomlinson said pedigree beef sales would be influenced by the commercial beef sector. "The price of finished beef has to rise to a realistic level. Without subsidies, commercial beef farmers are going to have to look long and hard at their enterprises and the quality of what they produce will have an even bigger part to play," said Mr Thomlinson. "It will become more important to select cattle to breed what the market wants.

The CAP reforms may bring other changes in the type of cattle bought particularly in response to not having to keep animals until two years old to receive the second beef premium. "Also with the ending of the OTM Scheme we might get our export market back for beef. All these factors are going to play a part in what the British producer breeds," he added.

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