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National Beef Association the Mart Centre, Tyne Green, Hexham, Northumberland, NE46 3SG Tel “a balanced approach to livestock health” Tel: 01644 470206 [email protected] www.mvtscotland.co.uk National Beef Association The Mart Centre, Tyne Green, Hexham, Northumberland, NE46 3SG Tel. 01434 601005 or e-mail: [email protected] Website: www.nationalbeefassociation.com NEWSLETTER April 30th 2007 HEADLINES Headlines Page Headlines Page MLC & LMC Market Prices 1 / 2 Focus on profitability at Beef Expo 2007 6 Market Summary 2 Report on SW Region AGM 6 / 7 Precision finishing should deliver… 2 Scottish members urged to attend… 7 Introduction of Video Image Analysis 2 / 3 Could new emphasis on carbon … 7 / 8 Food security 3 Robert Forsters Testimonial 8 Over correction on emergency cow… 3 / 4 Diary Dates 8 / 10 Domestic industry losing valuable stock 4 Advertisements 11 / 13 Some interesting beef cattle market… 4 / 5 Effort to discover hard figures on cattle… 5 / 6 (The information contained in this Newsletter is the intellectual property of the National Beef Association and is circulated only to registered members. No part of this Newsletter may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, electronic or mechanical to any other party, or parties, without the express permission of the NBA.) Important Announcements. (The NBA’s Newsletters are sponsored by MVT (Scotland) Ltd.) Remember the NBA’s Beef Expo 2007 at Skipton Auction Market on May 16th/17th. (See section towards end of Newsletter). Everyone with an interest in the beef industry should attend. * MLC and LMC market prices. The headline prices are an all-steer deadweight average of 210.4 (+1.6p) across Great Britain during w/e April 21st and a -O4L cow average of 152.9p (+2.4p) for the same week. The average cow price at auction over w/e April 25th was 71.24p (- 0.44p) The R4L steer average over the w/e April 24th was 204.7p (203.7p the previous week) in the South of England, 2011.5p (210.4p) in the English Midlands and Wales, 215.6p (210.4p) in the North of England and in Scotland 217.8p (216.9p). Over w/e April 21st the R4 steer average in Northern Ireland was 194.2p (195.9p) and in the Republic of Ireland 193.5p (194p) sterling equivalent. The all prime cattle average for animals put through English markets over w/e April 25th was 107.98p (- 3.41p) and in Scotland 121.03p (-3.63p) The O3 cow average in Scotland for w/e April 25th was 149.1p (149.3p w/e April 14th), in Northern England it was 154p (150.1p), in the Midlands and Wales 155.3p (149.5p), in Southern England 136.5p (145.0p), in Northern Ireland it was 151.1p (156.3p) and in the Republic of Ireland 159.6p (160.6). O4 cow averages were 154.6p in Scotland (151.3p), 152.6p in Northern England (150.3p), 153.1p in the Midlands and Wales (144.8p), 137.8p in Southern England (143.6p), 154.2p in Northern Ireland (156.3p) and 161.2p in the Republic of Ireland (160.6p). The P2 sequence was 103.7p (104.6p), 100.9p (107.7p), 118.7p (147.2p), 124.2p (120.9p), 118.0p (114.9p) and 131.5p (134.3p). 1 The P3 sequence was 111.4p (118.0p), 130.1p (134.6p), 136.0p (145.9p), 129.8p (132.8), 134.6p (135.6p), and 155.3p (155.0p). Dairy sired cull cows put through English markets over w/e April 25th averaged 66.45p (-0.91p) and the beef sired cows 79.64p (+0.22p). In Scotland dairy sired cows averaged 65.47p (-3.85p) and beef sired 87.02p (- 0.27p). Holstein bull calves averaged £37.21p (-£11.14) * Market summary. It is virtually stand on in weekly terms after heavier than usual slaughterings over the UK in the first quarter and no signs of any more enthusiasm for slaughter cattle over the last week of April and the first week of May. A useful lift in the value of P2 and P3 cows suggests more are being picked up for further feeding. The most significant price development is in the value of Holstein bull calves which hit £45 the week before last and even though they currently stand at £37 are almost twice the price being paid at the end of 2006. This is almost certainly the result of a rise in live exports which are currently estimated at 3,000 had a week and represent an unwelcome loss in throughput for UK abattoirs at this time next year. * Precision finishing should deliver bulls eye prices. (Also see following section.) More money could be earned from more prime cattle if more processors introduced tighter specifications and offered premiums, backed by discounts, to encourage more precise finishing based on higher rewards for in-specification carcases. And the NBA would like to persuade more slaughterers to offer bigger incentives to feeders who produce exactly the type of cattle their customers prefer. Some processors are already encouraging precision finishing by defining tight specifications and paying substantial premiums for cattle that hit the bulls eye. However others fail to offer an incentive, some even prefer to buy on flat rate, and as a result the price gap between the type of cattle they really want, and those that fall short of what is needed is much to narrow and not enough is being done to raise precision and financially stimulate improvement in both breeding and feeding. The Association is ready to work with slaughterers, retailers and other farm organisations to design improved payment systems which reward the delivery of the right type of cattle. More tools are available now that the industry is looking beyond the EURO classification grid, category and weight as the sole determinants of a slaughter animal’s value. This really does open the way to more processing companies identifying more precise requirements and reducing their balancing problems because more of the cattle they buy are right on target. This cannot be done unless out of specification cattle are hit with bigger penalties but the NBA would support this because if more companies are resolute about the type of animal they are prepared to take, and discourage those they do not want, there would be an immediate response from farmers and it would not be long before a bigger percentage of cattle hit the premium bulls eye and earned more money. This would not only help to stabilise the beef sector, which continues to battle against persistent losses, it would also help processors to develop closer links with both ends of their supply chain because more of the cattle they handle would be of the right type. The NBA can easily envisage a situation in which breeders and feeders each worked together to produce quite different cattle for different markets – and then made sure they were delivered to the company they were being aimed at instead of being picked up by someone else at a discount. There is not a lot of sense in abattoirs regularly buying cattle they do not really want and a great deal of value in companies rewarding feeders who supply animals with a biggest possible percentage of higher priced cuts and at the right weight and finish too. Finishers should also make sure they send cattle to the right company. There is not a lot of point in selling butchers heifers to supermarket suppliers or extra-heavy bulls to anyone else but an exporter with the right orders. * Introduction of Video Image Analysis (VIA) machines. These tools are considered likely to take a pivotal position in the development of new deadweight price reporting techniques – not least because they 2 are capable of measuring the percentage of strip loin on a carcase and introducing premiums for long backed and broad backed cattle which delivered a higher weight of top priced cuts. This would then encourage more breeders to breed cattle with this characteristic. Defra has told the NBA that there was still not a general view within the abattoir sector on their adoption. Machines of French and Danish manufacture were being used in the Republic of Ireland using the reference specification (Old EU) and private trials are being used at a number of abattoirs in the UK. Defra reported that there are number of interruptions to the system because carcases that are contaminated with faeces cannot move through the VIA system and VIA is confused if carcases have been trimmed – as they must be to avoid cross contamination. Dressing under New EU is being allowed in the UK trials because it is judged to be sufficiently similar to the reference spec for trial purposes. However the European Commission has said New EU cannot be used in VIA machines for price reporting purposes – if VIA is used commercially. The EC is expected to confirm its judgement on whether to approve a replacement spec for New EU, which would retain the pizzle sheath and limit brisket trim, sometime this spring. * Food security. Defra has told the NBA that its policy on food security, first outlined to the NBA four years ago, is unchanged. This means it has no interest in reinforcing the production of temperate food products in the UK (including beef) because it can get the same (or better) food security results by maintaining international trade routes. It was explained to the NBA that this mirrors the thinking behind the last CAP reforms when the European Commission made it clear that it was prepared to abandon its preference for food to be produced within the EU because of the huge cost to the public purse through production subsidies – which it regarded as inefficient because they disguised the gap between high cost EU production and the delivery of the same type of, but much cheaper, food off the world market.
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