BEEF finishers who purchased store cattle or suckled calves last autumn have already suffered massive losses as a result of the BSE crisis, but the real crunch may now come in the market for this year's suckled calves.
With prices expected to be well down on last year's record levels, the talk in the markets among finishers is that some will just not buy in any cattle at all or, if they do, then their numbers will be reduced and that those purchases will have to reflect the fall in the value of prime cattle.
Last week prime cattle in the UK averaged 103.1p per kilo compared with 120.4p in the corresponding week in 1995, a massive drop although there are signs of marginal improvements.
Clearly the continuing export ban is a major influence, especially for heifers, but, according to Meat & Livestock Commission figures, domestic consumption to June 30 is still running 24% down on last year, although the Scots are doing better with a drop of around 14%.
Sales of prime cuts are fairing relatively better, but it is mince sales which have shown the greatest slippage at 40% less.
Commenting on the prospects for the suckled calves sales, Alistair Donaldson, MLC's Scottish general manager, said: ``The finished cattle price looks fixed at between 100p and 110p and that will dictate the price of stores. Finishers have taken a big hit and unless they can get some flexibility the market looks to be under pressure.
``Home consumption is in a fairly fragile situation so we must keep pushing to restore consumer confidence. There is no question that this is absolutely vital and that there is a big promotional and marketing exercise to be done. Farm and quality assurance will be part of the process.''
Mr Donaldson is wary about predicting an early resumption of the export trade. He said: ``John Major has said it will be October or November, and then it will only be a small beginning. To be on any scale will take much longer.''
One worry that some in the beef industry are now expressing is that the EU may decide that exports can only commence once the entire selective slaughter policy is complete.
It remains to be seen exactly when this cull will get under way but the guess is either September or October.
It is further suggested that the process, including tracing cohorts, could take between six and nine months. That might mean no exports before next spring by which time markets will be extremely difficult to retrieve, especially since worldwide beef prices have plummeted.
Speaking yesterday in Edinburgh, one arable farmer who regularly buys cattle each autumn to finish said: ``The cattle I've sold today have just made their original purchase price. I don't know whether I'll be buying. Sheep and arable crops look a better bet.''
However, John Paul from Stacks, near Linlithgow, will buy.
``If you get out it can be difficult to get back in. We will buy our usual 200 cattle but the price will have to be realistic,'' he said.
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