Press Release - Improved market income puts Scottish beef farmers in better position to tackle challenges ahead

Improved market income puts Scottish beef farmers in better position to tackle challenges ahead.
 
Market forces, both global and national, have at last shifted in Scottish beef farmers favour – and this offers them a chance to put their business on a more solid financial footing so they are in a better position to face up to a still difficult future.
 
NBA Scotland is looking forward to commercial prime cattle prices creeping up towards a previously unthinkable 350p per dwkg as UK, EU cattle supplies continue to tighten over 2011-2012 at the same time as world demand for beef rises.
 
But the challenges are immense. The industry’s only possible response to soaring cereal costs is to finish cattle using less grain and more grass (or silage) while at the same time breeding more calves from the same number of cows.
 
And this will have to be achieved using grassland pastures with a good clover content, with carefully applied slurry and manure as the principle fertilisers, while ever-more expensive nitrogen is handled like gold.
 
On top of this the Scottish industry must prepare itself for the inevitable move from historic to flat rate SFP in 2014 and there is a likelihood of even more cross-compliance demands, all of which add cost, to fall in line with.
 
“Farmers who treat their post-2014 SFP as a justified payment to cover their cross-compliance costs, and reject the notion that it is to fill the gap between costs of production and market income will be adopting the best mental  approach to get over the difficulties that lie ahead,” said Hamish McBean, chairman of NBA Scotland.
 
“The challenge of breeding and finishing cattle for less than the market price is something beef producers will have to take on themselves and at least producers can be thankful that cattle are expected to get dearer and look forward to an average, 370 kilo, R4L carcase being worth £1,300 a head – which is actually only £150 more than it is now.”
 
“Help will come from the premium on Scottish bred cattle. There is only one place they can come from and that is Scotland, and as global beef supplies fall increasingly short of world demand there will be consumers, in many locations, who will be willing to pay more than the average so they can get their teeth into the crème de la crème.”
 
“But economic survival at farm level will depend on producing more beef using fewer inputs which means the future of a beef farmer’s business lies in his own hands. Beef cattle prices are being driven upwards by the same international market forces that are lifting feed, fertiliser and fuel prices.”
 
“So sticking with cattle is a very positive option but the business will have to reduce its dependence on cereals, fuel and fertiliser use.  Raising output by carefully monitoring cow fertility and pushing more store cattle through the shed every 12 months means that the farm will have a better chance of making a genuine profit,”
 
 
For more information contact: Hamish McBean, Chairman, NBA Scotland. Tel: 01309 651206
Or: Kim Haywood, Director, NBA. Tel: 07967 698936
 
 
Notes:
 
# Global beef prices must rise further because more people are eating beef and cattle numbers are not increasing.
 
# The EU will move to flat rate SFP. The NBA believes a transition period of at least four years must be negotiated and is pressing for this. It also believes that it would be in Scotland’s best interests to calculate flat rate on an all-UK basis. (There is more income per hectare in England) but suspects an all-Scotland flat rate, using a Pack Tribunal template for distribution, will be the best it can hope for.
 
# The average British steer carcase weight is 369 kilos. The average Scottish R4L steer price last week was 309.6p
 
# The NBA’s Beef Farmer magazine, in which SAC is one of the biggest contributors, has been spelling out for some time, exactly how output can be raised and costs of production reduced. (See spring issue). Similar themes are presented in its weekly Newsletter, which also has a reputation for producing accurate forecasted information. (See recent issues). Each of these is free of charge to NBA members – who will be familiar with the arguments put forward in the above press release.