Difficult winter ahead for steer finishers

Winter finishers look set for a difficult few months ahead. Recent work, carried out by Teagasc, shows that high store costs and low factory prices will see many struggle to break-even.

Teagasc figures show that continental steer finishers, operating a store-to-beef operation, will require a break-even price of 431-458c/kg next spring. The higher break-even price (458c/kg) will be required if a 530kg steer – used for the purpose of this budget – was purchased at €2.37/kg or €1,256.

These break-even prices are significantly higher than the current quotes being offered to farmers; most beef plants are now operating off a base price of 370-375c/kg for steers. If these quotes remain unchanged until next spring, it will see many producers venture into loss-making territory.

However, it must be noted that these break-even prices were generated using various budgeted costs – many of which can vary greatly from farm to farm.

These costs include: meal at €240/t; silage at €25/t (dry matter); and fixed costs at €86/head.

Assuming that the 530kg forward store would be finished over a 140-day period – gaining 1kg/day – a 375kg carcass would expected to be produced.

At a store purchase cost of €2.37/kg, this animal would need to achieve 458c/kg or over €1,717 to provide the finisher with sufficient funds to cover his/her costs.

It must also be noted that this example does not include a margin for the farmer. If a margin of €20/head was targeted, an extra 5c/kg would have to be added to the break-even price mentioned above to allow for such a return.