Greystoke Castle Farms manager, David Lawton has an annual turnover of 220 Charolais cross suckled calves, all of which come under the hammer sold without a single BSP claim. His future annual single payment, will clearly reflect the current regime. If the current CAP Reform proposals are legislated, he will receive a sum reflecting the estate’s 280 suckler cows; there won’t be a penny towards the calves. However he is not unduly concerned.

"The business is currently in profit and I have the will for it to live," he says. "And there can always be rich pickings for survivors." David argues in the short term, while quality suckler beef remains short, then calf prices will stay firm. "If the FSA recommendations for OTMS relaxation are accepted, then we will see a return to the market of older commodity beef - that volume must be managed very carefully, however I don’t see it in direct competition with quality suckler beef," he says.

"What’s more, CAP Reform and its payment mechanism is likely to trigger a further reduction of producers - the older generation will retire from farming at an accelerated pace, fewer sons will take over the family business, and it will become virtually impossible for youngsters to enter the industry."

He says the sector is entering a new world in which dedicated beef producers, those with future commitment, are likely to find themselves adopting a new regime driven by efficiency. "Finishers will no longer need to retain their steers until 24 months for that second BSP payment, they will be striving to finish their cattle, both steers and heifers, as quickly and efficiently as possible in order to minimise costs and maximize turn over and subsequent margins," he explains.

"At this point, the weight factor will become meaningful and producers with Charolais crosses will win hands down. Charolais leaves progeny with that unbeatable weight for age over all Continental cross calves. Furthermore Charolais crosses are accompanied by quality conformation. For producers who are finishing Charolais cross steers and heifers at 24 months, then they’ll find the brakes are off, they’ll be able to fully exploit their animals’ potential and reach target weight within 14 to 15 months and grading within the top end of the specification. Those finishing other Continental breeds are surely going to start reconsidering their genetics."

Charolais has been tried and tested at Greystoke Castle Farms for 16 years since David Lawton arrived to the 2,400 acre LFA estate based near Penrith when he was appointed to manage the farms and later as a partner in the Howard family business. Seven Charolais bulls carefully selected for their size, hind quarter muscling and conformation, run with the unit’s 280 black suckler cows in a system designed for ease of management. That includes a spring calving regime from 1 April to 20 June.

Half the crop of Charolais cross calves are sold as seven month olds through Longtown mart to maintain cash flow, while the remainder are over wintered in Greystoke’s limited accommodation on a forage based diet and offered through the same auction ring the following February. In autumn 2002, 75, seven month old Charolais cross steers leveled at £511 and 48 heifers £325; while in February 2003, 80, nine month old Charolais cross steers sold to average £572. "Selling the entire crop of calves without a claim has kept the system very simple, it has minimized the paperwork, cut out the risk of discrepancies, and what’s more the value of the first BSP has been usually reflected in the market price."

If in future under the new CAP regime quality suckler beef supply does become scarce, then David is quietly optimistic a portion of the new single payment received by finishers will start to filter back down the chain to suckler producers. "I hope the law of supply and demand will prevail and influence market price, yet whatever, I am determined this business will survive," he says.

"For starters I’ve already pared to the bone both fixed and variable costs." Labour has been cut from 10 to four full time men to manage the suckler and sheep enterprises, a total of 3,000 breeding ewes including a Swaledale flock producing annually 800 Mule gimmers. In addition, all machinery work is contracted out.

"Furthermore, we are confident we have in Charolais the most conducive genetics to match beef systems emerging from the new CAP regime. Charolais’ inherent efficiency - its weight for age plus quality conformation will protect not only us but all suckled calf producers in the marketplace.

"And finally while we already have the economies of scale, we are prepared to continue to expand," he says. "For example we will no doubt be presented with the opportunity of taking on a nearby holding, vacated by a retiring farmer, at cost lower than today’s going rate. We would use that unit to take our calves through to finishing."

He adds: "In the longer term, taking the country’s balance of payments into account, we need to look after both agriculture and our energy supply otherwise we will become extremely vulnerable. The current lamb trends are a clear reminder of how the market operates."