Farmers in the business of purchasing cattle at this time of the year for winter finishing will have to contend with soaring fuel and feed costs as well as a very lively trade at marts for store-type cattle.
Teagasc’s beef specialist, Aidan Murray, has outlined that over €5/kg beef price will be needed next spring in order to secure a €50/head margin on a continental steer winter-finishing system this year.
Murray explained that the €5/kg figure was reached with the following assumed costs:
- Silage €30/t;
- Finisher meal ration €300/t.
He added that the following purchase prices were used and outlined what the sale price would need to be in order for beef farmers to break even:
Breed Purchase price (liveweight €/KG) Sale price needed to break even (dead-weight €/KG) Friesian steer €1.97 €4.48 Hereford-cross steer €2.26 €4.84 Continental steer €2.55 €4.90
However, Murray added that if farmers can buy cattle at 10c/kg less it would take 10c/kg off the break-even cost and if inputs can be purchased cheaper, it would leave further room for farmers to clear a margin.
Concluding, Murray noted that across the board, cattle prices at marts are up 7% on average across all weight categories and are 0.2% above the cattle price peak in 2015.
With costs set to be high this winter, farmers should scrutinise all input costs and identify where savings can be made if they are to secure a margin this winter.
When accessing winter-finishing costs, the best place to start is silage quality.
Testing silage will help farmers to identify the level of concentrates needed to finish beef animals.
Silage of higher quality with a good Dry Matter (DM) and Dry Matter Digestibility (DMD) will require less concentrate supplementation than low DM silage or silage with a low DMD figure.
The duration of the finishing period should also be considered and an expected slaughter date should be identified by the farmer.
Farmers should be aware of the fixed costs in their system also.
Completing a beef-finishing budget and factoring in the above costs can be helpful when accessing the cost of operating a winter-finishing system.
As soon as a farmer makes a decision to finish cattle the farmer should set clear performance targets for the cattle so as to maximise the full potential of the livestock.