Press Release - NBA right about 350p commercial average - and looks forward to 400p
27th November 2012
Last week no commercial R4L steer or heifer, wherever it was located in Great Britain, sold for less than 350p deadweight.
The National Beef Association, which has acquired a reputation for being well informed about prime cattle market developments, predicted last July, when the 300p ceiling was broken, that a 350p average for commercial cattle, this excludes higher priced, specialty, animals like Angus or organic, was achievable within GB.
Nevertheless its forecast was greeted with skepticism, even ridicule, by many processors some of whom declared publicly that such a price was “impossible” and mocked the NBA for its prediction.
“It is nice to be proved right. The Association pays great attention to market movements, and market income, and in recent weeks has concluded that a commercial average of 400p, or £1,464 for a typical 366 kg steer carcase, is already on track,” said national chairman, Hamish McBean.
“This is not idle speculation but a considered view formed on the back of soaring world demand for beef, the emergence, internationally, of millions of new members for the previously rather exclusive beef eating club, and tighter than expected global supplies.”
“The on-going surge in cattle values is currently being led by China where prices above 400p per carcase kilo are already being paid and the significance of our own Angus base prices, which are already in the region of 380p-400p, and set to rise further, should not be overlooked.”
But although the Association knows that a commercial R4L base price in excess of 350p is helpful because it encourages breeders and feeders to anticipate a reasonable return for their stock it is also aware that feed, fuel and fertiliser prices are surging too.
“The same upward pressures, generated by global demand exceeding global supply, that drive slaughter cattle prices are piling in behind the relentless lifts in input costs as well – and it is important that these are conquered,” said Mr McBean.
“The current, and on-going, improvements in market income are a great help but an increase in revenue alone is not enough to balance a forward moving business. Costs must come down at the same time and that can only be done through greater efficiency by, for example, producing more calves from the same sized herd of cows or spending less on inputs to produce a kilo of beef.”
“With this in mind we urge breeders to immediately cull out all sub-fertile, or poor performing, females that are not able to produce calves that can be regularly cashed at 350p or over and quickly replace them with heifers that can.”
“We would also like more processors to recognize that beef is a retail product that is still well short of reaching its maximum price level and fall in line with new industry thinking that with more care and attention even more beef than is the case at present can be sold at prices that more than justify cattle purchases of 400p and beyond,” Mr McBean added.
For more information contact:
Hamish McBean, NBA national chairman. Tel. 01309 651206
Editors notes. Last week commercial R4L steers and heifers averaged 358p-359p in the South of England, 360p in the Midlands and Wales, 361p-363p in the North of England and 364p in Scotland.