€6.12/kg needed this winter for beef finishers to breakeven

Farmers who are finishing beef cattle this winter will need a beef price of €6.12/kg to breakeven, according to Teagasc’s winter finishing budgets.

At the Teagasc BEEF2022 Open Day in Grange, Co. Meath, on Tuesday (July 5) it was outlined that the production costs for a dairy calf-to-beef system have increased by 37% to €4.95/kg (carcass weight) this year, assuming the same level of inputs were used. In 2021, that figure stood at €3.62/kg.

However, when a scenario is taken where a beef farmer is buying in store cattle to finish over the winter, costs are greatly increased so the price needed to breakeven increases further also.

In 2021, the production costs for a winter-finishing system stood at €4.90/kg. This winter, due to virtually all inputs increasing in price, that production cost has increased to €6.12/kg, according to Teagasc calculations.

However, it must be outlined that this production cost price allows for cattle bought in at €3.04/kg liveweight. Where store cattle are bought in at a lower price/kg, the resulting production cost/kg carcass weight will be lower.

The table below shows production cost comparisons for Teagasc winter-finishing budgets this winter vs. last winter:

Every year, Teagasc produces winter-finishing budgets to provide an indication of costs and margins attainable in these systems.

For the purpose of the above table, the price of store cattle in 2022 is counted at approximately 40-50c/kg liveweight greater than 2021.

Variable and fixed costs have increased by 50% and 42%, respectively.

Overall, based on the assumptions in this analysis, total production costs have increased to €6.12/kg carcass weight.

The advice from Teagasc is that “it would be prudent to have a contract with processors to de-risk winter-finishing systems”.