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Beef Price Tide is Turning
07/01/08

The price tide is at last moving in the beef finisher’s direction and careful selling of finished cattle should produce a significant lift in income.

© www.jennifermackenzie.co.uk

beef cattle

So says the National Beef Association which has noted an important boost in the value of R4L slaughter cattle in the Republic of Ireland (ROI) from around 195p per dwkg in early December to 225-232p (sterling equivalent) last week.

And also points out that expanding world demand is putting more pressure on the domestic beef market at the same time as a significant lift in the value of the euro against sterling is making UK beef exports more competitive.

“If deadweight finishers take advantage of these favourable market developments by refusing to accept stand on prices and insist on receiving the same price hike that is being paid in the ROI they should reap immediate benefits,” said NBA director, Kim Haywood.

“The Irish Farmers Association has already advised its members to dig in and demand greater increases than are already being paid so that higher feed and fuel costs are adequately covered and the NBA sees no reason why feeders across the UK should not do exactly the same.”

“Slaughterers, especially those with huge regular supply contracts with the biggest multiples, are finding cattle on both sides of the Irish Channel much more scarce than they would like - and in these circumstances it would be wrong for finishers to waste the opportunity to put on their own squeeze and not give up cattle this week until they too have seen a 20p-23p rise in payments.”

According to the NBA almost every processor and wholesaler is facing depleted, post-holiday, beef stocks and on top of this the record value of the euro against sterling is making it harder to sell imports competitively while trade conditions for exporters are more favourable than they have been since 1985-86.

“The euro is currently worth more than 74p against sterling compared with its more usual 68p and this means all beef entering the UK will be dearer at the same time as currency led sales opportunities open up overseas,” said Ms Haywood.

“This is already making life much more difficult for the large slaughter companies which have to meet huge daily orders for the biggest supermarkets and it is up to every finisher in the country to make sure that they are paid the best possible price.”

“Signals at world level are extremely favourable too. Supply is shorter than demand and this shows in higher cattle prices in the USA where the deadweight average is close to 160p and also in Brazil where prices have jumped from 70p to almost 135p over the last 12 months.”

“UK farmers, who have been in a cost-price vice for decades, have at last been gifted a long awaited opportunity to take advantage of global, and local, supply squeeze and assert themselves fully at point of sale. They should not feel shy when they ask for more because current sale conditions are running full bore in the favour.”

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