Treat breeding cows like a goldmine
Suckler calf breeders are urged to treat their productive cows as goldmines, because market signals indicate further tightening of world and domestic beef supplies from autumn 2009.
That is the message from the National Beef Association. Kim Haywood, director of the NBA, expressed concern that some owners were being tempted by the extraordinarily high prices for beef-bred cull cows, currently averaging about 220p per dwkg, to cash them instead of breeding more calves to sell in three years' time, when prime beef values are expected to be much higher than they are now.
"It appears attractive to sell a good beef cow, when she is worth around £700-£800, but if she is able to breed more calves it should pay to hang on instead of dumping her," she said.
"An 18-19% drop in domestic production is expected from August next year, because of the huge decline in the birth, and rearing, of beef cross calves from the dairy herd that began two months ago - which is forecast to continue for as long as milk prices remain at current levels."
"The meat trade is already speculating that, despite the current blip in the market, prime cattle prices will hit extraordinary levels next autumn and developments at world level appear likely to sustain them too."
According to the NBA, recent reports from the USA confirm that beef cow slaughterings between January and June were up by 8.6% on 2007 and, over the last four weeks, have accelerated to 13% as breeders react to unexpectedly high soya and maize prices.
"Live cattle futures on the Chicago Mercantile Exchange remain strong at 104 cents per pound - up 16.4% in the year," said Haywood.
"Futures for 2009 delivery are trading at 114 cents, but analysts are predicting that the real shortage, and higher prices, will emerge in 2011.
"In the meantime, Argentine breeders are dumping more cows too. Disposals this year are up almost 20% on last year, as more cattle ground in the west is ploughed for soya or maize."
She added: "In addition to this, the surviving herds are being pushed on to higher, non-arable, ground in the east and conception rates in these range conditions have dropped from 75% to 50% - which suggests Argentina will struggle to meet its own domestic commitments, let alone export any beef in less than two years' time."
"And if British breeders dump cows too, the gap between domestic supply and consumer demand will widen further when less suckler-bred calves are slaughtered from September 2010."