Best not to dwell on January beef sales

A few months ago, none of us could have predicted we would be looking at a beef price well over 600p/kg. It is a very welcome price increase, but I am reluctant to celebrate.

When I look back at my long involvement with the beef industry, I am always very sceptical about big price fluctuations. I have always found that for every boom we have had, there has been an even bigger bust.

I have no doubt that there will be a price correction at some stage and there will be a lot of farmers who will get a massive nip. The mart trade is continuing on a steady weekly rise. I do not think that anyone knows where it is going to stop, but eventually it will.

Free to sell

I have been closed with TB most of last year and it has meant that I was carrying a lot more stock than usual.

I eventually got clear just before Christmas and was able to sell cattle in the mart. I was a little light on silage stocks, so I decided to show some store cattle at the end of January.

I was really pleased with the prices I received and thought that I had done the right thing.

However, as everyone knows, prices have risen every week since and now it looks like I did not get enough for these cattle.

I am very pragmatic about the whole situation. I was low on silage and would have had to buy some fodder. Also, my cattle houses were very full, so maybe I was right to sell.

Current prices

I still have a lot of beef cattle on the farm and, if the current prices hold, they should come into good money.

However, it will take it all to make ends meet. You need a lot of money to keep a farm running. Interest rates have not reduced very much and insurance and energy costs have risen steadily. The biggest thing is when you start to make improvements, or even just undertake some maintenance, the cost of materials and labour has gone through the roof.

Beef

It is not easy to put a finger on why beef prices have improved so much. A lot of it is probably to do with things outside of this country and outside of our control.

But there are other things that have happened at a local level which have added to inflationary pressure. For example, suckler cows have failed to yield much of a return for a long time and this has resulted in a slow, but steady, exodus from the sector.

Some farmers have switched to milk and others to rearing and finishing dairy-bred stock. But given that the carcase weight of these animals is a lot less than suckler bred stock, it has meant overall beef production is well down.

When aligned with what is happening in other countries it has created a perfect storm – beef prices have risen as a result.

I am hoping that the pendulum does not swing the other way now. It may be that sucklers start to look a profitable option and farmers start rushing back into keeping them. They may start to chase the new suckler cow payment and a good calf price.

On this farm, I have kept my suckler numbers pretty static for the last five or six years. With the extra land that we have bought, we have kept more dairy-bred stock. We have tried to position the farm so that we have beef cattle to sell the whole year round.

We have tried to get into a system that works, and yields a return in the lean times. Our intention is to stick with that system.

Some farmers like to switch between systems and play the market. At the moment they are making money, but I would be cautious that the bubble will burst someday.