Every autumn around the time of the National Ploughing Championships, Teagasc produces a set of financial budgets to assist farmers who are buying cattle during autumn.
The values included in the budgets are often subject to criticism from beef farmers, but Teagasc beef advisors always emphasise to farmers that they should use the budgets as a template and include the costing figures relevant to their own systems.
It is also worth nothing that the sample budgets detail the breakeven selling price required, another figure that sometimes generates criticism from farmers.
According to Teagasc, the reason for this is that different farmers will expect different levels of margins from their respective systems.
The equation below can be used to identify the selling price required to include the required margin on finishing cattle:
The budgets use a range of assumptions including very good levels of efficiency with a high average daily gain.
Meal costs are included at €310/tonne (farmers can use costs relevant to them when doing their own budgets).
Silage quality is assumed as well preserved 20% dry matter (DM) with a dry matter digestibility (DMD) of 72% and a costing of €45/t.
Dosing and other health costs are valued at €8-39/head (depending on the system) while transport and marketing is valued at €39-42/head. No mortality is assumed and half the interest cost on feed and animals borrowed at 7% is also assumed.
The gallery below details sample budgets for four different beef systems:
Speaking to Agriland at Ploughing 2024, Teagasc’s Alan Dillon commented on the figures.
He said: “It’s broadly similar to last year so basically the purchase price has gone up per head, the input costs have dropped but when you add it up, at the end you’re back to square one.
“You’re still hovering close to that €6/kg in terms of break even so if you want to add in €100/head (margin) you’re probably tipping north of that €6/kg for most types of stock you have.”
He noted that the big variation is the price the cattle are being bought at and said:
“The big thing is the outlay. There’s nothing (forward store) for less than €1,000 to go into a shed and then pay for your inputs which is another €600-700, so you have €1,600-1,700 tied up in an animal to try get a return.
“There’s confidence in the market now and farmers seem to be willing to pay for these stores.”
Opportunity for value when buying cattle
Giving his own perspective on the Teagasc costings, Alan Dillon said: “The heifer probably has the best chance of making a margin I would say (Table 4).
“You’re buying those 280kg heifers, there isn’t a major demand in them at the moment for some reason.
“You can buy them 280kg [heifers] for €870-880. There doesn’t seem to be much shipping demand so it does give you better chance.
“The €5.02/kg [breakeven price outlined in table 4] is a lot more achievable or even €5.30-5.40/kg [with margin], is a lot more achievable than looking for €5.80/kg [break even]for the bullocks. The weanling heifer does seem to be a bit of value in that.
“That’s one system that would show the greatest potential at the moment,” he noted.