Young bull prices need to improve for farmers to break-even

Latest figures from Teagasc show that farmers operating bull-beef systems will require a break-even price of 422-444c/kg on a 180-day finishing programme.

Farmers operating a 235-day finishing regime will need 438-458c/kg to break-even.

Six-month finishing

Teagasc figures show that continental young bull finishers operating a bull-beef system, finishing animals in six months, will require a break-even price of 422-444c/kg.

These break-even prices are higher than quotes offered to farmers last April; most beef plants were offering 400-410c/kg for well-finished, R and U-grade animals back then.

Assuming that a 420kg young bull would be finished over a 180-day period – gaining 1.5kg/day – a 385kg carcass would be expected to be produced.

At a purchase cost of €2.39/kg, this animal would need to achieve 444c/kg or €1,709 to provide the finisher with sufficient funds to cover his/her costs.

Taking factory prices into consideration from April 2017; if they remained the same for April 2018 producers would be out of pocket.

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: meal at €240/t; silage at €25/t (dry matter); and fixed costs at €109/head.

Eight-month finishing

Most processors were offering 401-433c/kg last June for well-finished, R and U-grade animals. Again, the break-even prices outlined by Teagasc are higher than the prices paid to farmers in June 2017.

According to Teagasc, farmers operating a bull-beef system will require a break-even price of 438-458c/kg.

If these processor quotes remain unchanged in 2018, it will see many producers venture into loss-making territory.

young bulls

Assuming that the 420kg weanling bull would be finished over a 235-day period – gaining 1.35kg/day – a 421kg carcass would expected to be produced.

At a purchase cost of €2.39/kg, this animal would need to achieve 458c/kg or over €1,928 to provide the farmer with sufficient funds to cover his/her costs.

Yet again, these break-even prices were generated using various budgeted costs. These include: meal at €240/t; silage at €25/t (dry matter); and fixed costs at €145/head.

It must also be noted that these examples do not include a margin for the farmer. If a margin of €20/head was targeted, an extra 5c/kg would have to be added to the break-even price mentioned above to allow for such a return.

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