BEEF

Possibly stronger and broader demand in wholesale trade than supermarkets think Committed deadweight sellers now selling live While consumers watch Somerfield's television commercials promising deeply discounted steak and cattle finishers complain of deadweight prices at least 3% lower than a year ago, some farmers are bidding furiously for beasts needing at least a few more weeks on feed or grass before slaughter. Such anomalies can usually be explained by expected seasonal or cyclical supply shifts, but the messages from the beef market at the moment are more about confusion and lack of price transparency. First quarter UK beef production is now believed to have totalled 175,000 tonnes, the same as in January-March 1999 and heavier than MLC economists forecast. Full year output will be up by perhaps 4%, which together with strong sterling to attract imports and some ex-intervention stock still to reach the market should mean soft prices. Yet as the National Beef Association pointed out on Monday, most of the downward pressure on cattle values so far seems to have been from the abattoir operators buying direct and presumably needing to placate the supermarket discounters. The NBA calculates the price of a 320kg R4L steer carcase has fallen more than £28 since late January, whereas a similar 600kg live beast sold at auction has lost less than £18. Although the NBA's stance is nearly always against supermarkets and it distrusts deadweight selling, on this occasion its observations are almost neutral and are similar to the views of leading auctioneers, many of whom are surprised by the strength of bidding for supposedly finished cattle. They claim formerly committed deadweight sellers are selling live instead, and some nominal slaughter stock are going for further feeding. One implication is possibly stronger and broader demand somewhere in the wholesale beef trade than has been built into supermarket buyers' procurement calculations. {{MEAT }}