As costs go up, savings must be found
Published 01/03/2011 | 05:00
I'm glad the General Election is over. If one more person called to the door canvassing for a vote and said "well, at least 2010 was good for agriculture", I would have blown a gasket.
Obviously they weren't looking at our farm accounts or Profit Monitor. We have just been working on completing both of the above for 2010 and they show a worrying trend.
Looking at the figures, our cost of production is just too high and it's something that we are going to have to seriously think about. One thing that jumped out of the page at me is that we used less fertiliser last year and it cost more money.
Our three big variable costs are feed, fertiliser and contractors. And, despite our best efforts, they seem to be increasing every year.
As soon as we get our Profit Monitor back we will have to go through it forensically to see where savings can be made and try to incorporate them into our Teagasc Cost Control Planner for 2011. If that process does not produce the required results then the next step is to look at our farming system and see if there are changes that we need to make there.
Looking at the factory returns from the batch of 21-month bulls sold recently, these were U and E grade Belgian Blues (with one R grade that was born with a gammy leg), their fat scores were mostly 2+s and 3s and they killed out at 430.6kg carcase weight.
These bulls put on 1.4kg of liveweight per day for their final 120 days of finish. For that period of finish we would estimate that it was costing close to €3 per day to feed them. I would reckon that they were actually costing more per day to feed in that period than they were increasing in carcase value, despite the increase in the price of beef.
It was also noteworthy that their average daily gain from birth to slaughter was just under 1.2kg/day which, though not exceptional, would be reasonable.