Is there any value in holding on to weanlings until next spring and selling as stores?
In light of low beef prices and general market uncertainty in the beef industry, many suckler farmers – who generally sell weanlings annually – may consider holding on to them in the hope of a better price next spring.
During today’s ‘Ploughing 2019’ livestream, AgriLand’s Niall Claffey asked Teagasc’s head of drystock, Pearse Kelly, if he believes there is any value in holding on to weanlings and selling them next spring?
Kelly said: “It’s really hard seeing people taking the prices they’re getting, but that’s all the people who are buying them can afford to give based on what their expected price is.
“People who were getting €2.30-€2.40/kg for their average weanlings are this year being offered €2.00/kg.”
Kelly noted if farmers opt to hold onto weanlings, there will be variable costs as well as fixed costs.
He outlined: “Teagasc looked at a 350kg weanling gaining 90kg and selling this animal in March.
“You’d want to be getting €2.20/kg in the spring and that’s really only to make €30-40 on that animal.
If you have suckler cows and are in the business of selling the weanlings every autumn, but hold on to a batch of weanlings, that puts the system under pressure.
“For the most part, what we’re saying to people really is you’re probably better sticking to the system you’re in at the moment.
“So, unfortunately take the lower price, but you’d want to be getting a significantly higher price to make a modest enough margin on those weanlings between now and then,” he said.
Beef Sector Agreement
In response to a question on whether the recently agreed Beef Sector Reform Agreement is a positive step for beef farmers, Kelly explained: “In any deal, what people will tell you is you don’t get everything you want.
What we’re hearing on the ground is that people have cattle to kill. Those people that have not said an awful lot up until now have cattle going over 30 months-of-age.
“With all the main organisations behind the deal, we’re moving into a time where cattle need to move on.
“A lot of pressure is coming on those farmers from a cash-flow point of view to go out to buy weanlings and stores.
“Our hope would be that people will see the positives in this deal,” Kelly concluded.