national b eef association newsletter
TRANSCRIPT
National Beef Association Newsletter THE INFORMATION AND OPINION IN THIS NEWSLETTER IS DISTRIBUTED FOR THE USE OF NBA MEMBERS.
THE NEWSLETTER IS PUBLISHED BY NATIONAL BEEF SERVICES LIMITED. The Mart Centre, Tyne Green, Hexham, Northumberland, NE46 3SG Tel: 01434 601005
@natbeefassoc | [email protected] | www.nationalbeefassociation.com
16th September 2016: Issue 36
NBA NEWS: Processors face questions
2 Producer Share of Retail Beef Price reaches half
9
NBA Board Meeting and AGM 3 Where next for beef grading? 10
Bluetongue update 4 Pay Close Attention to Rumen Conditions to Get the Most out of Forage this Winter
11
SBA NEWS:National loan scheme will mitigate delayed CAP payments
4 Beef and Veal Imports significantly back in July
11
NBA DIARY 5 Rearing Calf Market Still Subdued 12
NBA MARKET REPORT 6 EU Commissioners split on beef impact of Mercosur deal
13
AHDB (Meat Services) and LMC market prices
8 Russia Hopes to Expand Into EU Beef Market After Becoming FMDFree
14
BEEF INDUSTRY NEWS: 9 Only legislation will combat unfair trade
14
Volume of UK Retail Beef Sales increases while Value declines
9 Advertisements On
1
NEWS AND NBA DIRECTORS WEEKLY REPORT Processors face questions Britain’s three biggest beef abattoirs have denied that changes to cattle grading have wiped millions off farmers’ incomes, as suggested by the AHDB study. In front of MPs on the Environment, Food and Rural Affairs (Efra) Committee, ABP UK chief executive Tom Kirwan said the first report was “very emotive” and offered average cattle values at his plants for the weeks before, during and after installation of the new visual image analysis (VIA) grading system. In the first week, the average price was £1,095, the second it was £1,097 and the third it was £1,100. “I do not recognise the millions of pounds a month missing [as the AHDB report suggested],” Mr Kirwan said. Dunbia group managing director Jim Dobson added that the study should be repeated over different months with different cattle. 2 Sisters red meat livestock procurement director John Dracup, like the other two witnesses, denied any price collusion between processors and said cattle values were driven by supply and demand. The NBA gave evidence to an earlier session of the EFRA Committee.We reported that tougher deductions are knocking off an extra 15% from the price farmers were being paid compared with last year, on top of the base price fall. Dairybred animals had lost £90£150 a head, while beef animals were worth £60 a head less, according to the NBA. An AHDB study found 67% of the drop in beef values in 2016 was due to changes in the grids, so far this year this accounts to over £1 million less to the farmer due to grids alone. The truth is retail price has moved up 1%, whilst until recently farm prices have been slowly, week by week, coming back to a point where farmers are getting around 46% or less of retail price.
The NBA reported that we’ve seen huge penalties come through for those carcases that fall outside so called retailer specs, however the bonuses for in spec cattle are small by comparison. The committee was informed that the evidence clearly pointed towards the fact that new grids were being implemented to devalue cattle and that the penalties are far harsher than the rewards, with AHDB research having showing grid penalties have wiped over 1 million pounds of the value of cattle. We feel that the current grid system can work and is important for putting a value on cattle, but classification needs to be used in a responsible way, and not used to place upper values and introduce excessive penalties onto the carcase. We need further clarity from the processors and supermarkets – this means better communication up and down the supply chain and not knee jerk reactions. It takes a minimum of 6 months for finishers to change the way they buy in store cattle, with a change in breeding policy taking up to 3 years before changes are realised and cattle start coming through. As a result we want to work with the retailers and processors to get longer term market signals, through contracts or other means to understand and keep producing this quality product for the correct market at a fair price. We need to build an efficient supply chain, which looks forwards for pricing, and gives farmers the information they need but to do this we need trust and at the moment very few farmers would say they trust processors. I encourage the EFRA committee to continue challenging retailers, catering companies and processors on short notice periods and also on how specifications are devised. Specifications are supposed to reflect what consumers want, but I doubt consumers would be happy if they knew that the dominant retailers, food service companies and processors were financially penalising farmers to achieve this. The NBA we feel that there is a lack of competition in the beef market with control of the supply chain in too few hands. Farmers are the first and most important link in the production
2
of safe and welfare friendly beef but we are the last to be consulted on specification changes, therefore we need a process which sees farmer involvement in discussions around these changes and one which will deliver the long term notice that our farmers really need. We do not expect government intervention in the bid price but we do expect fair treatment and for government to ensure we are treated fairly. NBA Board Meeting and AGM The NBA Board met on tuesday ahead of the AGM. All relevant issues were addressed and actions decided going forward. At the AGM John Hoskin stood down from the Board of the NBA, Chair David Thomlinson thanked him for all his hard work on behalf of the NBA and the beef industry and hoped that he would continue to be a good friend of the NBA in the future. After the AGM the Board reconvened and the office bearers were elected. David Thomlinson remains as Chair of the NBA with Stephen Heenan and John Vanstone remaining as Vice Chairs of the NBA. William Walton was elected to the post of treasurer. Also arriving at the office on Tuesday were copies of the new National Beef Farmer Magazine which is now produced inhouse
These have been posted out to all our members and supporters, if by chance you have not received your copy please contact head office and this will be rectified.
3
Bluetongue update France has reported twenty new outbreaks since the 2nd of September, making a total of 318 outbreaks. All of the cases were detected as part of active surveillance as part of premovement testing, and all were in cattle where just one or two animals tested positive out of the consignment (variable numbers). None were clinical cases. France has surveillance in place along the north coast, in the free areas, as well as the regions on the border of the restriction zone. The extent of the restriction zone has not changed as a result of these cases and has been the same since April 2016. The assessment confirms that counties along the south coast of England would have been at risk of incursion if disease were circulating along the northern regions in France. It should be emphasised that disease has not been confirmed in this region. The level of vaccine uptake in France, and in the North specifically, is not known. Our risk level remains the same as our previous report, at medium, for this time of year. This level could increase at any time over the next few weeks, as the French Authorities continue with sentinel surveillance and if the virus is found to be circulating in the northern France. BTV8 vaccine has been available for the GB market since midJuly, and the decision to vaccinate should be taken by the farmer, in consultation with their private veterinary surgeon.
SBA News National loan scheme will mitigate delayed CAP payments Cabinet Secretary Fergus Ewing has announced that a national loan scheme will be made available to 17,000 farmers and crofters this autumn. The scheme has been set up to fill the gap that would have emerged in the rural economy as the Scottish Government's IT system to deliver CAP payments continues to struggle to be fit for purpose. In a statement to Scottish Parliament, Mr Ewing indicated that those eligible for CAP funding under the Basic Payment Scheme, Greening or Young Farmer elements will be able to apply for a loan worth up to 80 per cent of the value of their entitlements. Letters to eligible businesses will be issued at the end of September, with an application deadline of 12 October, creating the potential for up to £300 million to be injected into the rural economy in the first few weeks of November. The announcement of the loan scheme coincided with publication of the Scottish Government's results from the 2016 Survey of Bank Advances to Scottish Agriculture which revealed that total outstanding bank loans to agriculture were £2.2 billion, up £177m or nine per cent from May last year. The figure excludes an estimated £1.7bn of liabilities from hire purchase, leasing, family members and other sources.
4
2016 NBA DIARY Tuesday 20th September COOP Farming Conference
Wednesday 21st September BVD Free EGM
Wednesday 21st September Beef Expo Meeting, Stoneleigh
Tuesday 18th October Policy Meeting, Cullumpton
Monday 24th October NBA Pedigree Breeders Committee Meeting, Stoneleigh at 11.30am
Tuesday 6th December Board Meeting, Hexham
Entries in Red are open to all NBA Members Entries in Green indicate Meetings attended by NBA representatives Entries in Blue indicate NBA Committee Meetings
5
NBA MARKET REPORT (written today at 4pm) Cattle prices remain firm and we have seen some small increases regionally. The outlook for the short term remains good as numbers remain surprisingly tight, though as we get further into Autumn and harvesting gets completed we will see more cattle come on to the market. It remains important to go through cattle regularly to ensure they don’t get too fit and incur penalties. As is usual when numbers are tight heavier cattle, black and whites and plainer types are easier to find homes for. For the week ended 10th September, there was an increase of 3p in the GB prime cattle average price to 353.0p/kg. The slow continual improvements in price over the last few weeks has now seen the price settle above last years trade.
Steer and heifer prices both had rises in price with target R4L cattle securing price rises of 2p and 3p, respectively, on the week earlier, steers averaged 365.8p/kg and heifer’s 365.9p/kg. Young bull prices have kept pace with their steer and heifer counterparts, those meeting R3 specification were up 2p on last week at 347.9p/kg. They haven’t traded close to the 350p threshold since the early months of last year.
Prices have now been moving up for over four months and, at least in the short term, market trends look unlikely to change significantly. Cold stores are not near full and processors need to be actively procuring to meet their requirements. Producers with the right type of cattle in the right number are in a strong bargaining position and are undoubtedly able to secure higher prices than those quoted.
The cow trade also remained buoyant for another week, despite estimates suggesting that numbers coming forward were at their highest level for a number of months. Cows meeting 04L specification moved up 2p on the week earlier to average 239.7p/kg. The cow trade in the UK has fared relatively well throughout the summer in comparison to those across the EU in general, which is suffering from high dairy cow slaughterings as the collapse in the EU milk market continues to take its toll on dairy producers. Given the fall in the value of sterling, price competitiveness of UK cow beef in euro markets has improved, which has clearly supported the market.
According to the latest data from HMRC at 19,500 tonnes imports of beef and veal were down a very notable 17 per cent in July relative to last year. This trend was entirely driven by weighty decreases in shipments of fresh/chilled products from all of our main European suppliers. Shipments of this type of product from the most significant supplier Ireland was back 20 per cent, from the Netherlands 40 per cent and from Poland a drop of 30 per cent was reported. This movement on the UK market away from imported goods in the first month following the EU referendum vote is most likely a reflection of the devaluation of the pound against the Euro which make European beef less attractive to UK buyers.
With lower amounts of imported product, domestic demand for UK beef and veal has strengthened, as movements in farmgate prices has provided evidence for. Reflecting the strong demand at home and despite the weaker value of sterling, at 8,300 tonnes beef and veal exports are reported to show only a modest increase of one per cent in July compared to the corresponding month last year. However, the value of these exports is up 10 per cent in sterling terms on July 2015 bolstered by the falling value of sterling.
The small increase in exports is largely attributable to increases in shipments of fresh/chilled products, particularly bonein cuts and carcasses, with shipments up 27 per cent and 12 per cent respectively yearonyear. Hong Kong was key in driving the growth in demand for bonein cuts, alongside Ireland, while the demand for carcasses has, as always, primarily come from The Netherlands. On the flip side, fresh/chilled boneless exports were back five per cent on last year. Shipments to EU countries were down which reflects the particularly robust demand for this kind of product on the domestic market.
6
Even though prices have undoubtedly improved, are we getting a fair share of the retail price yet? In August, the producer share of the final retail price was calculated to be a fraction short of 50%, two points up on the month earlier and five points more than in the low point of the year so far in April, when farmgate prices were under significant pressure.
As this trend has been consistent throughout the summer, it may seem like some positive news, especially as the producer share is above yearearlier levels for the first time this year. However, it is worth remembering that the producer’s share of the final retail price still remains some way behind the previous fiveyear average (201115), which is around 53 per cent. Also, it is important to point out that the increase over the past four months does come on the back of the producer share in April being at its lowest point in around 10 years.
Looking ahead, the improved outlook for the short term suggests that the finished cattle market may well continue to respond to tighter than expected supplies, lower imports and improved export opportunities. While a great deal will depend on the evolution of retail prices, the better farmgate price outlook could well result in producers attracting a modestly more favourable share of the retail price in the coming months. However, whether or not it stays ahead of last year’s position remains to be seen.
Imports of prime cattle for direct slaughter from ROI to NI increased to 181 head last week, the highest weekly level of import since late April this year. However the level of import for direct slaughter from ROI remains well below year earlier levels when 558 prime cattle were imported. A total of 79 cows were also imported from ROI for direct slaughter in NI plants last week while 45 prime cattle and 127 cows were exported from NI for direct slaughter in ROI. Exports of prime cattle to GB for direct slaughter increased to 150 head last week, the highest level of export since late February 2016.
The average R4L steer price in GB continues to rise, at 365.8p/kg this is a further lift of 1.6p/kg on the week. Scotland is now at 380.6 p/kg a lift of 1.5p/kg, the South remains steady at 360.0p/kg, the North is up 3.4p/kg for the week at 364.4p/kg, the Midlands is up 0.4p/kg at 355.5p/kg for the week. Northern Ireland Steers are up over 1.6p/kg on the week to average 342.2p/kg whilst in the ROI, steers are back around 5.5p at 315.2p/kg due to currency fluctuations and more cattle coming to the market. The average R4L heifer price in GB is up 3.2p/kg and averaged 365.9p/kg. The R4L heifer price in Scotland is up 2.8p/kg to average 377.2p/kg, Midlands are up 2.1p/kg at 358.4p/kg, the North is up 4.7p/kg on the week at 361.3p/kg, whilst Southern England heifers are up 2.9p/kg at 360.4p/kg. Northern Ireland heifers are back 3p/kg on the week and averaged 341.3p/kg whilst in ROI, heifers are back 4.2p at 325.1p/kg due to currency fluctuations and a seasonal increase in numbers. For the coming week: In the South of England, we are seeing cattle being quoted from around 355p. The North, is seeing base prices quoted for next week in the region of 362p/kg. Scotland is seeing cattle being quoted from a base of around 377p/kg. In Northern Ireland processor, prices quoted are in the region of 334p/kg based on R4L for the coming week. Angus, Shorthorn and Hereford native bred cattle continue to attract premiums of depending on the scheme, with Angus at around 410p/kg and organic cattle are over 410p/kg. Cows remain in the region of 250p, with more for better fleshed cows with good conformation.
7
AHDB (Meat Services) and LMC market prices:
Auction Averages Week Ending 14/08/2016 Price p/kg lw p/kg change on wk
STEERS 186.8 1.6
HEIFERS 200.4 1.7
YOUNG BULLS 176.9 2.4
COWS 101.4 3.2
DeadWeight Cattle Prices (p/kg) Week ending 10/08/2016 GB SOUTHERN CENTRAL NORTH SCOTLAND N.
IRELAND ROI
R4L Steer
365.8 360.0 355.5 364.4 380.6 342.2 315.6
p/kg change on wk
+1.6 0.5 +0.4 +3.4 +1.5 +1.6 5.6
R4L Heifer
365.9 360.4 358.4 361.1 381.8 340.3 325.1
p/kg change on wk
+3.2 +2.9 +2.1 +4.7 +2.8 3.0 4.2
R3 Bull 347.9 349.1 344.8 338.9 368.6 334.4 311.3
p/kg change on wk
+1.6 6.9 +2.7 +6.4 +3.3 +0.8 4.1
O+3 Cow
261.5 259.3 261.0 260.9 267.8 253.5 249.4
p/kg change on wk
+1.1 2.0 +1.2 +3.8 0.7 +1.3 3.0
All GB data in the above tables is reproduced from tables created by AHDB/LAA/IAAS – For more detailed information please visit www.laa.co.uk or www.beefandlamb.ahdb.org.uk. * The above tables are unique because they are the only ones in existence that are published on a crossUK basis that carry information on all UK regions plus the Republic of Ireland. The information, which is delivered free to NBA members by email, can only otherwise be obtained through AHD/LAA/IAAS (see above) and the Livestock and Meat Commission’s (LMC)Bulletin for Northern Ireland. The tables should be a useful source of information to committed beef finishers across the UK.
8
BEEF INDUSTRY NEWS Volume of UK Retail Beef Sales increases while Value declines Retail expenditure on beef in the UK totalled £429.3 million during the twelve week period ending 14 August 2016 according to the latest available data from Kantar Worldpanel. This is a two per cent decline from the corresponding period in 2015 when retail beef sales were valued at £438.1 million. The volume of retail beef sales totalled 55,768 tonnes during the 12 week period ending 14 August 2016, a 2.2 per cent increase from the corresponding period in 2015 when volume sales totalled 54,567 tonnes. The average retail price of beef during the 12 week period ending 14 August 2016 was £7.70/kg, back from £8.02/kg during the corresponding 12 week period in 2015. This decline in the average retail price by 32p/kg will have helped to drive the 2.2 per cent increase in the total volume of retail sales. Household penetration for beef has remained strong with 68 per cent of households surveyed by Kantar purchasing beef during the 12 week period ending 14 August 2016. This was a slight increase from 67.2 per cent during the same period in 2015. While the total volume of beef sales has increased year on year the volume sales of individual cuts has recorded a mixed performance. The most notable increase in volume sales recorded was for beef stewing meat, up by ten per cent during the 12 weeks ending 14 August 2016 when compared to year earlier levels. Mince sales also performed strongly during the 2016 period with volume sales up 6.5 per cent from year earlier levels. Meanwhile volume sales of beef marinades increased by 1.9 per cent year on year while sales of frying and grilling steaks recorded a marginal increase year on year. According to the latest Kantar data the only major beef cut that recorded a notable decline in term of volume sales was roasting joints which were back by 11.9 per cent year on year. Volume sales of processed beef products generally declined with volume sales of frozen pies back by a notable eight per cent from year earlier levels during the twelve weeks ending 14 August 2016. Meanwhile volume sales of pasties were back by 5.7 per cent from year earlier levels while volume sales of chilled ready meals, frozen ready meals and pre packed hot pies all recorded declines in volume sales. The only processed beef category that recorded an increase in volume sales during the 12 week period ending 14 August 2016 was burgers and grills which recorded a 1.3 per cent increase from year earlier levels Producer Share of Retail Beef Price reaches half With a notable strengthening in cattle prices over the past few months against levelling retail prices, the gap between the two indicators has narrowed. In August, the producer share of the final retail price was calculated to be a fraction short of half, two points up on the month earlier and five points more than in the low point of the year so far in April, when farmgate prices were under significant pressure. As this trend has been consistent throughout the summer, it may seem like some positive news, especially as the producer share is above yearearlier levels for the first time this year. However, it is worth remembering that the producer’s share of the final retail price still remains some way behind the previous fiveyear average (201115), which is around 53 per cent. Also, it is important to point out that the increase over the past four months does come on the back of the producer share in April being at its lowest point in around 10 years.
9
Looking ahead, the improved outlook for the short term suggests that the finished cattle market may well continue to respond to tighter than expected supplies, lower imports and improved export opportunities. While a great deal will depend on the evolution of retail prices, the better farmgate price outlook could well result in producers attracting a modestly more favourable share of the retail price in the coming months. However, whether or not it stays ahead of last year’s position remains to be seen. Where next for beef grading? The beef chain must become much more transparent, AHDB’s major research into the sector has concluded. While that thought was hardly novel, the threepart study, carried out over the summer, did show clear evidence of where farmers, abattoirs and retailers might be going wrong. The levy board found a significant number of beef cattle exceeded the 380kg weight limit, or missed the supermarket spec. Grid changes introduced last winter also knocked 7% off the value of the monthly cattle kill and the value of the grid now falls away much more sharply outside the ideal range. Farmers were seeing returns fall, while processors were not getting the carcasses they needed, AHDB market intelligence specialist manager Stephen Howarth said. “A more transparent environment, allowing more positive, open relationships to develop across the supply chain, would potentially benefit everyone,” he added. The biggest processors were initially frustrated with the study, but they found the conclusions more balanced, and some now want to have better conversations with producers. AHDB key findings
● Just half of cattle slaughtered hit target specifications ● Less than onequarter of male cattle hit both target classification and tighter weight
range ● Grid changes may have knocked £1.1m off the value of monthly cattle kill ● Value of grid now falls away more sharply outside target range
The directors of 2 Sisters, ABP and Dunbia had their say at Westminster on Wednesday 14 September. “I think there will be more of a dialogue between farmers and processors,” one insider said. Tensions tend to ease, between producer and abattoir, when beef prices rise. From a trough of 311p/kg in late April, the British allsteers average broke the 350p/kg barrier at the end of August. But longterm challenges, such as falling red meat consumption and retailer demand for smaller pack sizes, still need collaboration. The changes could be more fundamental, such as an overhaul of the Europ grid. Britain’s vote to quit the EU could allow fresh thinking, as the system, in place since the 1970s, is backed by European law. Australia, for example, grades cattle on eating quality for each cut. New technology needs to be used to price meat, based on tenderness, retail meat yield and quality.If a carcass is worth more to a consumer, it is worth more to a retailer and more to a processor, and therefore we need to have a better system to reflect this value to the farmer. Norman Bagley, head of policy at the Association of Independent Meat Suppliers, said worries about specs for supermarkets were largely irrelevant, as most of their sales were mince. Meanwhile, the fastestgrowing part of the industry was highclass, catering butchers. “Their highclass restaurant and pub customers are increasingly demanding a much higher quality and a more consistent eating experience, and this is where the growth is,” he said. “We can achieve that through things like dryageing, which is very expensive but doable, or we can look at the triedandtested Australian system, which rewards eating quality and should give farmers a better return for highclass cattle.” The risk is AHDB’s findings are welcomed, but business as usual prevails, like the sudden grid introduction that sparked the investigation. However the rewards of bold changes could be enormous.
10
Pay Close Attention to Rumen Conditions to Get the Most out of Forage this Winter With many of the year’s grass silages higher in fibre and lower in energy than in 2015, maintaining ration energy levels and maximising milk from forage could be a challenge this winter, warns Dr Derek McIlmoyle, AB Vista’s Technical Director for GB and Ireland. “The rumen will need to be working at its very best if cows are to fully utilise the fibre in forages once housed on full winter rations,” he explains. “The milk production potential of these forages is already lower, so it’ll be important to avoid overloading the rumen with too much starch trying to make up the energy deficit. “Unless done carefully, you might solve the energy problem but it will be at the expense of causing another – subacute ruminal acidosis (SARA).” According to Dr McIlmoyle, managing feed to minimise the risk of SARA – and low rumen pH in general – is essential if the breakdown of forage fibre in the rumen is to be optimised. Although pH 5.5 is considered to be the threshold for SARA, fibre digestion and fermentation efficiency are both compromised any time rumen pH drops below 5.8. “Only by ensuring the rumen spends as much time as possible close to its optimum pH 6.0 can the maximum potential be extracted from the forage in the diet and boughtin feed costs be kept to a minimum. “Where starch levels are high, at least consider using a slowrelease rumen conditioner such as Acid Buf to counter the high risk of SARA,” he adds. “The same applies where silages are at the other end of the spectrum, being high in feed value but wet and acidic. “It’s also sometimes necessary to add a metabolically active yeast like Vistacell to help ‘mop up’ excess oxygen in the rumen which fibredigesting microbes are sensitive to. In fact, research has shown that when the rumen acid load is high, using a yeast and rumen conditioner together, rather than just yeast on its own, can produce a significant improvement in rumen function and feed efficiency.” Beef and Veal Imports significantly back in July According to the latest data from HMRC at 19,500 tonnes imports of beef and veal were down a very notable 17 per cent in July relative to last year. This trend was entirely driven by weighty decreases in shipments of fresh/chilled products from all of our main European suppliers. Shipments of this type of product from the most significant supplier Ireland was back 20 per cent, from the Netherlands 40 per cent and from Poland a drop of 30 per cent was reported. This movement on the UK market away from imported goods in the first month following the EU referendum vote is most likely a reflection of the devaluation of the pound against the Euro which make European beef less attractive to UK buyers.
With lower amounts of imported product, domestic demand for UK beef and veal has strengthened, as movements in farmgate prices has provided evidence for. Reflecting the
11
strong demand at home and despite the weaker value of sterling, at 8,300 tonnes beef and veal exports are reported to show only a modest increase of one per cent in July compared to the corresponding month last year. However, the value of these exports is up 10 per cent in sterling terms on July 2015 bolstered by the falling value of sterling. The small increase in exports is largely attributable to increases in shipments of fresh/chilled products, particularly bonein cuts and carcasses, with shipments up 27 per cent and 12 per cent respectively yearonyear. Hong Kong was key in driving the growth in demand for bonein cuts, alongside Ireland, while the demand for carcasses has, as always, primarily come from The Netherlands. On the flip side, fresh/chilled boneless exports were back five per cent on last year. Shipments to EU countries were down which reflects the particularly robust demand for this kind of product on the domestic market.
Rearing Calf Market Still Subdued Given the uneasiness about the direction prime cattle prices took in the early part of the year and little positivity in the dairy sector, the rearing calf market was somewhat subdued in the first half of the year. More recent price data indicates that, despite improvements in the finished trade over the summer and some buoyancy in the store market, the rearing calf market has not moved in the same way. Following its regular seasonal decline, the market for Friesian/Holstein cross bull calves has maintained its position of being consistently below yearearlier levels in recent weeks. In August, averaging just above £45 per head, they are trading almost £20 down on the same month in 2015. The line between profit and loss when finishing dairybred male calves is, as always, very fine and success depends on sourcing the right type of calves for the right price. Financial returns from dairybred male beef systems are highly sensitive to changes in calf prices, finished prices, and the cost of feed, which can be controlled by the use of highquality homegrown conserved forage. Slaughter age is a key determinant of feed conversion efficiency and in all systems, attention to detail to enhance performance has the potential to improve revenues for producers. The pure dairybred male calf does not have the same carcase conformation as a suckler bred animal but, when produced to meet the market requirements for this type of animal, they can still offer economically sound opportunities for beef producers. The market for continentalcross bull calves this year has also been somewhat subdued in 2016 so far, generally trading down on the year, with the exception of a week or two. However, prices have also strengthened seasonally more recently and, in May, averaging £250 per head, they are up £30 over the past couple of months. Herefordcross bull calves have followed the same trajectory, moving up since the start of the year to average over £200 per head in May, but are still around £10 down year on year. This report has outlined the main system options for pure dairybred male calves, including veal production, bull systems and steer systems. It has challenged the traditional systems of production by suggesting that alternative feeds other than cereals can be used in finishing
12
rations for these beef cattle and that grazing can play an important part in systems to reduce feed costs where managed carefully to maintain forage quality and, therefore, animal performance. It also recognises the potential for highquality homegrown conserved forage to control costs. Slaughter age is a key determinant of feed conversion efficiency and the carbon footprint of a production system, hence in all systems attention to detail to improve performance has the potential to improve revenues for the producer. The pure dairybred male calf does not have the same carcase conformation as a suckler bred animal but, when produced to meet the market requirements for this type of animal, they can offer economically sound opportunities for beef producers.
EU Commissioners split on beef impact of Mercosur deal Talks continue on a deal with a South American bloc of countries known as Mercosur. Negotiators will hold informal discussions this week ahead of formal talks in midOctober on a deal that Irish Independent MEP Marian Harkin says could put the squeeze on Irish beef farmers. "If large quantities of Brazilian or Argentine beef were allowed to be sold in the EU it would automatically have a detrimental impact on Irish farmers and may even put many out of business," Ms Harkin said. She says Ireland should press the EU not to do a deal that gives Mercosur wideranging access to European agricultural markets.
13
While EU agriculture chief Phil Hogan said in May that beef was off the menu in the talks, his colleague, trade commissioner Cecilia Malmström, said a deal can't be done without them. "It is unrealistic to expect Mercosur to conclude negotiations with the EU without obtaining any improvement in their access to the EU market for beef," Ms Malmström told Ms Harkin in response to a parliamentary question. She said an agreement with Mercosur would require making "market access concessions on partner countries' key export interests" but added that the Commission would respect "sensitivities in agriculture". Agricultural products make up the bulk of EU imports from the five countries in the Mercosur bloc Argentina, Brazil, Paraguay, Uruguay and Venezuela while machinery and vehicles are the EU's main exports to the region. Venezuela is not currently participating in the EU talks. EUMercosur trade was worth more than 90 billion euros last year, with the EU exporting €5 billion more than it imports from the bloc. The Irish Farmers' Association says that production standards in South American countries are inferior to the EU's, particularly when it comes to traceability, animal health, the environment and hormone use. Russia Hopes to Expand Into EU Beef Market After Becoming FMDFree Russia is in talks with the European Union on possible beef exports, the aide to the chief of the Russian agriculture watchdog Rosselkhoznadzor said. "We are negotiating with the European Union about possible purchases of our beef," Vasily Lavrovsky, of the Rosselkhoznadzor, a federal agency in charge of veterinary and phytosanitary monitoring, told RIA Novosti. Brussels banned Russian beef imports several years ago after an outbreak of the contagious footandmouth viral disease (FMD) in the Far East. The World Organization for Animal Health has recently declared most of the country free of FMD without vaccination. "A buffer zone with continued inoculations will be retained along Russia’s southern border, but most of the territory has been declared FMDfree without vaccination, which will allow us to explore new markets," Lavrovsky said. He added that the watchdog was on the fence about mass imports of Turkish fruit and vegetable. He said the agency’s mission recently inspected warehouses in Turkey that used to store agricultural products designated for Russia. Experts detected violations of sanitary norms that need to be addressed. Only legislation will combat unfair trade The EU must introduce legislation to combat unfair trading practices on the food supply chain, including "independent & robust" enforcement, the EU’s farm lobby CopaCogeca said today. In an address to the informal meeting in Bratislava, Cogeca President Thomas Magnusson said “farmers are being squeezed by both the upstream & downstream sectors, with the retail sector dominated by just a few operators in many Member States”. “We need to adopt & implement at EU level a legislative framework combined with voluntary codes of good practices to combat UTPs & ensure that the Single Market functions properly", CopaCogeca SecretaryGeneral Pekka Pesonen said. The system "must be overseen by an independent third party adjudicator that together with its enforcement role can receive & act on anonymous complaints", he said. The umbrella group also called for market observatories in each Member State to look at prices & margins using a harmonised methodology to provide data on price transparency along the whole food supply chain. “We need to have an independent governing body, which has oversight, supervision & investigative powers”, he said. The group wants to strengthen written contracts & improve price transparency. Farmers’ weak bargaining position on the food supply chain is one of the key factors discouraging new entrants into the beef sector.
14
ADVERTISEMENTS
Hexham & Northern Marts hold a weekly sale of 350 plus top quality store cattle every
Friday.
Contact our team of Auctioneers for further details or to receive copies of our catalogues. Tel: 01434 605444
Web: www.hexhammart.co.uk Email: [email protected]
Facebook: Hexham and Northern Marts
15
16
17