2013 saw a solid trade for calves from January right through to December.
Prices started strong off the back of 2012’s high prices but settled back to average €100 to €120 per head for Friesian bull calves during the main calf season of February through to May.
The autumn trade for Friesians was firm and prices averaged similar or slightly higher to the spring. Through 2013, the domestic demand for Friesian, continental and traditionally bred calves remained strong. Declining beef prices in the latter half of 2013 and a reduction in demand for lesser quality cattle combined with the current difficulties in slaughtering out-of-spec and aged bulls will have a strong impact on the demand for calves in 2014.
Calf exports to increase
Calf exports peaked in 2009 at almost 159,000 head. In 2012 exports rested at just over 38,000 head. Last year they increased to 90,600 head, which was similar to 2011 levels. It is widely anticipated that the reduced domestic demand combined with increased supply as more dairy cows calve down to Friesian sires will result in export numbers reaching 2008 or 2009 levels (140,000-160,000).
The main export destinations in order of importance are the Netherlands, Spain, Belgium and France. Traditionally, the number of calves exported to the Netherlands accounted for up to 80% of all calf exports.
More recently, the numbers exported there has fallen, and they are now at 30-40% of annual exports. In 2013, 31,400 calves were exported to the Netherlands. The second largest importer of Irish calves was Spain, which imported 31,200 calves. Demand from Spain for Irish stock reduced since 2008 after the financial crisis and increased calf prices in Ireland, but recovered to some extent last year due to lower calf and concentrate prices. Last year French farmers increased demand for Irish calves and over 6,500 head were exported as a result.
The driver of calf exports was price. Exporters purchased average to lesser quality calves at prices of €70 to €90 mainly, with prices occasionally rising to €110. With greater availability and less farmer demand in spring 2014, lower calf prices should result and numbers exported may be higher.
As stated previously, the current beef price and issues surrounding the slaughter of lesser quality out-of-spec bulls along with the forecast increased number of dairy-bred bull calves will have a dampening effect on calf prices in the spring, particularly Friesian bull calves. Finishers in dairy calf to beef systems who are currently slaughtering overage bulls are seeing carcase values failing to cover the total costs. The saying “once bitten, twice shy’’ comes to mind. These finishers are, in many cases, looking at alternative options to Friesian bull beef.
Where Friesian calves are being purchased, farmer demand is centring on the better quality types and, in many cases.
The past few years has seen increased farmer activity for Angus and Hereford calves with the intention of finishing as steers and heifers. The main driver of the increased interest in traditional breeds has been the beef price premiums available. Last year Angus bulls and heifer calves saw prices range mainly from €180 to €210 with heifer calves selling from €170 to €190. With solid farmer demand, the cost of traditional breeds calves is expected to remain similar to that of last year. However, a switch in demand from Friesian bull calves to traditional breeds could result in a slight price increase.
Systems
The most important factor to consider before buying calves is the system in which you intend to finish them. Most dairy-bred animals, regardless of breed, will bring forward poorer carcase characteristics from their mother. In general, these will receive below average prices if sold live in marts. It is also worth considering that in a market of poor demand, these cattle types will be first to receive price pressure.
Where a Friesian bull beef system is being considered, it is essential that farmers consult their factory to ensure that there will be demand for the animals when slaughter fit and that they can be finished to meet market spec.