Going on spring 2018 R+3= steer prices – which averaged 407-425c/kg over the months of February, March and April – farmers finishing continental bullocks will be ‘out of pocket’ at similar returns next spring, recent work by Teagasc indicates.
Winter finishers look set for a difficult few months ahead. Teagasc figures show that continental steer finishers – operating a store-to-beef operation – will require a break-even price of 440-468c/kg next spring.
The higher break-even price of 468c/kg or €1,756/head will be required if a 530kg steer – used for the purpose of this analysis – was purchased at €2.44/kg or €1,293/head.
Looking at different purchasing costs, if the bullock was purchased at a lower ‘autumn 2018’ price of €2.24/kg (€1,187/head), this animal would need to achieve 440c/kg or €1,650/head to provide the farmer with sufficient funds to cover his/her costs.
If the bullock was purchased for €2.34/kg or €1,240/head, a price of 454c/kg or €1,703/head would be needed for the farmer to break-even.
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 variable costs at €376/head and fixed costs at €87/head.
Assuming that the 530kg forward store would be finished over a 140-day period – gaining 1kg/day – a 375kg (670kg live weight) carcass would expected to be produced.
Within this period, Teagasc estimates a silage requirement of 5t and concentrates at a rate of 4.5kg/head/day.
Meal costs – for the above analysis – were taken at €280/t and silage with a dry matter value of 20%, 72% dry matter digestibility (DMD) and at a cost of €30/t was assumed.
An excellent animal health programme is essential and Teagasc attributes €8/head to cover such associated costs; transport and marketing of the bullocks was estimated at €42/head.
Profit margin
The above estimations only outline the break-even prices; if a margin of just €30/head was targeted, an extra 8c/kg would have to be added to the break-even price mentioned above to allow for such a return.
However, Teagasc highlighted that farmers have the option to switch to an ad-lib concentrate diet for the last 80 days if cheaper meals are available.
Like all beef finishing systems, finishers are urged to do their sums and speak to their processor before going down the finishing route this winter to ensure that it’s worth their while come next spring.