Phenomenal Store Cattle Trade
9th June 2015
The store cattle trade for all types is currently phenomenal. "Off the clock", "tears before bedtime" and "blowing their brains" are all phrases we have recently heard said to describe the trade. And yes, they are right. Since the end of February store cattle finishers have seen their price for prime cattle decimated from 375ppk to at worst 311ppk. This represents a fall of between £250 and £290 per beast. Why has this happened? Simply because the retailers have the power to do so! The pound has strengthened, making imports cheaper and at the same time making it harder for exporters to sell our meat abroad. In the hiatus of the slump we heard "they claim they can’t sell any beef". No, they did sell beef, just not as much of ours as usual!
Store cattle have sold to a peak this Spring of £1500 at Sedgemoor. At recent sales we have seen stores climb back over £1400 to a top of £1435. But unlike the finished cattle, store cattle did not drop away in value to the same extent. Why?
There is a general shortage of cattle in the country due to reduced calf registrations in 2013. It was this shortage that was thought was going to keep the finished cattle trade up but cheaper imports more than made up the shortfall.
Spring grass has also fuelled demand, particularly for "cheaper" dairy bred types as graziers look for longer term cattle to ride out the slump.
There was no real need for the retailers to slash the finished price of cattle by near twenty percent, wiping out any opportunity for finishers to make a profit and taking some capital with them as well this Spring.
Store cattle producers need a good price for their stores to encourage them to retain expensive to keep suckler cows. Store cattle finishers also need a decent margin to be able to continue buying the stores and supplying the abattoirs. However when seismic reductions in value are imposed so rapidly over the space of three months, store cattle finishers get caught out. To make matters worse, this is the second year in a row that it has happened.
Now the trade for finished cattle has turned, finishers are chasing cattle to keep their numbers up in the hope that they can recoup their losses. Let's hope lightning doesn't strike a third time in quick succession. The retail Gods need to hold their thunder and allow finishers to recover.