15 August 2011

3 minute read

Europe

But if they are to take best possible advantage of hugely favourable supply and demand developments, and push prices to the even higher levels that have still to be achieved, more of them must adjust to trading on an unusually strong sellers’ market.

“Feeders with big yards, who can draw even loads that can be delivered to processors desperately looking for cattle of that specification, have known for months that list prices are meaningless and much improved deals, some of them quite extraordinary, can be negotiated over the phone,” explained NBA director, Kim Haywood.

“However a large number of mainly smaller finishers have still to drop the habit, established over decades of selling on a buyers’ market, of ringing their regular processing company, booking their cattle in, and accepting whatever price appears on their kill sheet a few days later.”

“Booking in without negotiating a price is folly at a time when every processor in the UK is short of cattle because consumer demand is strong, exports are rising, and retailers can no longer rely on cheaper imports because world supplies are tighter, and more expensive.”

“Much more money can be made by ringing round a number of companies, finding out which one needs the cattle most, and then sticking out for much more than was originally offered.”

Finishers who prefer not to challenge processors directly can either work through a deadweight agent who will negotiate on their behalf or in the case of those only able to offer cattle irregularly, or in small lots, identify a suitable auction company and move their cattle through it instead.

“More buyers are turning up at around a dozen big auction centres hoping to pick out a load, or half load, of exactly the type of cattle they need. If small feeders use the right company, and their cattle become part of a pool of animals from which a number of processors can select what they are looking for, then they are more likely to earn the same prices as large feeders who are able to put together their own loads and sell directly,” said Ms Haywood.

“There can be no doubt that feeders are in the driving seat and those who work harder to sell their cattle at the best possible price, instead of just booking in or even taking first offer, will not just earn more money but also help to lift prices to even higher levels as autumn approaches.”

“The Association knows that processors are finding it so difficult to meet contracted orders from retailers and burger restaurant chains that secondary trading between companies helping each other out by exchanging small amounts of different cuts of beef has reached extraordinary levels.”

“We are also aware that feeders who have been given a real brushing off by deadweight buyers are being rung up just a day later and told to put their animals on a lorry at the price that was originally demanded.”

TheCattleSite News Desk