English dairy and beef herds need to plan the disposal of their
older animals increasingly carefully over the final two years of
the Older Cattle Disposal Scheme (OCDS) if they are to avoid losing
out from the progressive annual reduction in compensation levels.
This is the suggestion from the English Beef and Lamb Executive (EBLEX)
following its analysis of the first year of the Scheme.
Official figures show that a total of 107,000 animals born before August
1996 went through OCDS in 2006, following its introduction to replace
the Over Thirty Month Scheme almost exactly 12 months ago (23 January
2006). This is markedly less than expected from original national estimates
of surviving older cattle numbers.
Throughputs proved stable over the first half of the year at between
1,000 and 1,500 animals per week. However, they rose to some 2,800
per week in the final quarter and peaked at 3,500 the week before Christmas
as spring-calved cows were culled following weaning and producers sought
to beat the New Year compensation rate fall.
At the 2006 compensation rate of €360 per animal, RPA figures
show OCDS disposals delivered an average of £240-250 per head,
depending on the monthly euro exchange rate.
From 1 January 2007, this value fell to under £220 per head as
the compensation rate was reduced by the planned annual 10% to €324
per animal. What is more, at the current monthly exchange rate the
value will fall to under £200 per head when the rate drops back
to €292 per animal for the final 12 months of the scheme from
1 January 2008.
Large numbers of animals born before August 1996 still on UK farms
coupled with the likelihood of a similar surge in disposal demand ahead
of the 2008 compensation rate fall and the strictly limited number
of abattoirs licensed to operate OCDS means weekly demand may exceed
slaughter capacity in late 2007. So pre-booking restrictions similar
to the maximum of five animals per producer per day imposed from mid-November
this year are almost inevitable.
Under these circumstances, EBLEX advises producers to note the lessons
of the first year of OCDS and plan the disposal of their older animals
particularly carefully from now on.
First and foremost, everyone should establish precisely how many older
cattle remain in their herds, identify the individuals concerned and
ensure the BCMS register is as complete as possible.
They need to be aware that disposals in 2007 will generate significantly
higher compensation levels than those in 2008. Equally, they would
be well advised to spread disposals across the year to avoid falling
foul of any end of 2007 excess of supply over scheme capacity that
could force animals to be retained until 2008 and disposed of at the
lower compensation rate.
Cattle farmers wanting further information on any aspect of the Older
Cattle Disposal Scheme should contact the Rural Payments Agency slaughter
helpline on 0118 968 7333.
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