Is there a catch in the cattle trade?

Farmers, by their nature, are worriers. So many of the factors that determine how a farmer’s day, month, or year will go are way beyond their control. Weather, commodity prices, input costs, trade agreements, disease outbreaks... it’s no wonder farmers exhibit a mix of fatalism and pessimism a lot of the time, while continuing to drive on and invest.

“A triumph of hope over experience,” the phrase Samuel Johnson used to describe a second marriage, is appropriate.

It’s little wonder then that farmers are often most concerned when things are good. The exceptional May weather had some calling for rain after a week of sunshine. Now the weather has broken those same people are worried it will rain until October.

In the same way, the exceptional meat and milk prices we are currently experiencing leave many farmers wondering “where’s the catch”. The sense that it’s all too good to be true pertains to more than looming tax bills.

I know the gloss has fallen off the hogget market, but lambs are still making good prices as we move into June.

But those hogget finishers currently losing money are very concerned at the kind of prices they will have to pay next autumn for lambs. The continuing fall in ewe numbers means competition will be keen, and with ration quite affordable, more farmers might opt to finish lambs themselves if current prices continue through the summer.

For summer cattle grazers, the concern is that they have bought stock at the top of the market. The potential for losses is obvious. That said, a drop in prices before autumn would mean a lot of people will lose some money. If a drop in prices came during the winter finishing period, a small group of large-scale specialist cattle finishers face Armageddon.

Normally, the cure for high prices is high prices, but supply of young stock will not recover. Farmers have cut or scrapped suckler cows, not because of prices or costs, but mostly because they are too old to calve cows. And many have no-one coming after them, so they will run a few cattle around regardless of price. So with cattle exports up 20% on last year, and with supply curtailed, mart rings will be hot as we approach the housing period.

Many cattle farmers have been waiting a long time to see the current prices, with one recently remarking that he was waiting 20 years for such a lift. Whatever may come in the coming months, weather or price-wise, cattle farmers are well entitled to be basking in the good prices at the moment.