Current upturn is a welcome step forward

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The week before Balmoral Show saw the UFU issue a very confident press statement regarding the prospects for finished cattle prices over the coming weeks.

No doubt, a combination of scarce supplies and the relative weakness of Sterling are helping to buoy the UK’s redmeat market. Adding to the probable strengthening of markets is the hike in world oil prices, which has kicked in over recent days.

The current upturn in beef prices represents a welcome step forward in terms of rewarding the efforts of local farmers, who consistently produce high quality cattle. But the situation is still far from perfect. In real terms, livestock producers deserve a much better return on their investment. But farmers should not be lulled into a false sense of security regarding future prospects on the back of predictions which point to a further erosion in the UK’s potential to produce beef over the coming years. In reality, imports – cheap or expensive – could make up for the shortfall. Brexit remains a totally unpredictable deal.

Traditionally, finishers have responded to better cattle returns by paying more for stores, which only served to put more pressure on their margins further down the line.

Some of this activity could be excused by the fact that farmers needed cattle to claim subsidy. However, those days are gone forever, with the result that beef producers have no option now but to concentrate on those costs they have control over and not the vagaries of the marketplace.

Economists continue to point out that lower performing farms must increase their efficiency levels, if they are to remain in beef production. A temporary price rise alone will not be enough to deliver sustainable incomes, given the pressures that are coming down the track.

However, the worrying fact remains that a significant number of livestock farmers in Northern Ireland do not have a detailed handle on their operating cost base.

It’s extremely difficult to implement any on-farm improvement programme when the producers concerned have no idea as to what their actual starting point is.

The most obvious way round this problem comes in the shape of the CAFRE benchmarking programme. It costs nothing to get on board, yet the scheme offers a host of opportunities for farmers to gauge the efficiencies they are achieving and, thereafter, identify possible ways forward. Sounds like a plan to me!