Farm Ireland

Friday 28 October 2016

Everyone appears to be losing in this year's beef price lottery

John Heney

Published 07/09/2016 | 02:30

IFA President, Joe Healy getting a helping hand from George Anderson on his farm outside Laghey. Mr Healy met IFA members in Donegal who are struggling with bad ground conditions cut to the wet weather. Photo Clive Wasson
IFA President, Joe Healy getting a helping hand from George Anderson on his farm outside Laghey. Mr Healy met IFA members in Donegal who are struggling with bad ground conditions cut to the wet weather. Photo Clive Wasson

While we all know that one swallow never makes a summer, the results from the first load of cattle sold gives me a very good idea of how things will turn out in any particular year.

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So it was with not a little trepidation that I examined the result sheet of this year's first load which I sold in early August.

I suppose the first thing that strikes anyone selling cattle at the moment is the price per kilo which was back about 40c on the same week last year.

This really highlights what a lottery beef farming is; when we purchase our store cattle we never know what the trade will be like when the time comes to sell the finished article

My fears that my finished cattle were planer this year were realised, this in spite of the fact that they looked far better than previous years when bought-in last autumn.

It appears that the dairy-type Friesian cattle which I fatten get plainer as they grow older, what's more worrying is that the situation appears to be getting worse each year.

However every cloud has a silver lining and I was very pleased overall as the 'finish' which the cattle achieved this year was excellent.

Their average fat score was around 3+, with only one bullock in the load scoring less than a 3= and two actually grading over fat. I suppose I should have spotted these two and got them away earlier but I must confess that I still manage to make more than the odd mistake.

I have sold another two loads since then and while grades continue to disappoint, carcass weights are holding up pretty well and fat scores continue to be good.

This makes me a little more confident about this year's final outcome.

However, it's still far too early to draw any conclusions regarding overall weight gain or profit margins.

The name of the beef game as far as I'm concerned is to maximise the margin between what I pay for my stores and what I get for my beef, using the least amount of inputs.

The most important factor in this exercise is weight gain which is hugely reliant on a good finish - which of course is measured as fat score.

Because of this I find it most encouraging that fat scores appear to be up on last year, which itself was one of the best thriving years I have experienced for some time.

Considering the ongoing uncertainty in the beef trade, I find it extremely worrying, that but for the fact that I have land that is capable of finishing cattle without any feed, I would probably be out of business years ago.

I'm quite relieved that I got the few loads of cattle away last month as I'm a bit concerned about grass supply at the moment.

Even though growth appears very good and fields are recovering well after grazing, I find there is very little volume in this grass with paddocks lasting little more than half the number of days which they normally would.

I am also trying to build up a good supply of grass as we head into the autumn.

The first of this autumn's dairy-type store cattle came in last week and while they look well at the moment, experience would suggest that as they grow larger and older their youthful good looks will probably disappear.

At the moment they appear quite uneasy - probably because they are suffering withdrawal symptoms from meal-feeding by their previous owners.

At the moment store prices appear well back on last year. Last year's high price for beef of course resulted in a very strong trade for store cattle; unfortunately many of these are now losing money.

The opposite appears to be happening, with this year's lower beef price resulting in a considerable drop in the price which store producers are now getting for their cattle.

While there will always be winners and losers in the cattle trade, this year everyone appears to be losing.

It is little consolation to beef and store producers that eventually everything balances itself out, as, unfortunately, the profit levels at which they reach equilibrium continues to remain unsustainably low.

Joe Barry's recent article for the Farming Independent on 'How Status Anxiety Fuels Protests and Poor Decisions' prompted me to order Alain De Botton's book 'Status Anxiety' which Joe referred to in his article.

Well it arrived this morning and I am hoping that it may go some way in helping me to understand the mystery of the Irish cattle sector in which image appears to be such a hugely important factor.

John Heney is a beef farmer from Kilfeakle, Co Tipperary.

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