High prices for beef cattle only part of the picture warns Hill

There has been some excitement in recent weeks with the price of finished cattle going over £3 per kilo deadweight for the first time but this should be seen in a perspective as there has been a gradual rise towards that level in recent months.

It should also be remembered, according to Scottish Agricultural College beef specialist Gavin Hill, that in the autumn of both 2008 and 2009, when feed costs were much lower, the price of R4L finished cattle was just under the 3 per kilo mark.

"Let us just say the present price is well appreciated and helpful after a long winter where beef producers faced additional costs and where animal feed and bedding prices rose," he said yesterday.

Along with the rise in the end price, Hill welcomed the increases currently being seen in the store market as cattle breeders have also faced increased expenditure in the production of their beef calves.

More producers are now selling their stores at 12 to 14 months old rather than as previously when they were at the 18 to 24 month old stage. Hill approves of this shift as it is often more profitable selling the younger stock.

Another factor that is being seen in the current market is the increased demand for Angus calves which will be put to grass but he cautioned that costings on this still had to be evaluated.

There is also a big demand for Charolais stores, with many of the cattle coming forward hitting the 2 per kilo liveweight level before the auctioneer's gavel comes down.

The trade for cull cows has also sharpened and a number of producers are now taking the opportunity to reduce the age of their herds by selling their older cows at well over 1,000 per head while at the same time introducing a larger percentage of heifers into their herds.

Commenting on the lift in the value of beef cattle, his SAC colleague, business consultant, Gavin Dick, advised that producers should start now in planning their winter feed regime for next winter.

"There is no doubt that some producers were caught out last winter and had to buy in expensive feed," he said. "Even if animal feed costs seem to be high just now, there will be opportunities in the volatile market to get bargains and producers should look out for these.

"It is important to avoid panic buying as this almost always costs more."

Even although there is now more money coming into the beef sector, neither thought it would result in any great increase in cattle numbers."Many farms have mixed sheep and beef enterprises and the sheep are leaving more cash behind just now," said Hill.

"The hope is that lamb prices will continue as it has to be remembered the majority of flocks are not marketing many numbers at this time of year but the signs are very encouraging."

In fact, the view of the two advisers is that, with increased profitability in the sheep sector, cattle are being "pushed up the hill a bit" as producers try and cut costs.

According to Hill: "Over the last few years many producers have altered breeding policies to bring more maternal types back into the herd using breeds such as Shorthorn, Angus, Luing, Hereford, and Simmental.

"They end up with a cow that can graze and forage successfully in upland and hill areas as well as producing a quality calf for the market when they are crossed."