Cattle numbers may well be set to fall but making money from winter beef remains a challenge
Published 09/11/2010 | 05:00
They say that three sure approaches to losing money are slow horses, fast women and winter beef. Again this year I hear the sages say that nobody is going to feed cattle this winter. "Too much money was lost last winter and meals this year are up €70/tonne," is the common refrain.
Yet I don't see any cheap store cattle in marts. Compared to 12 months ago, stores are dearer right across the board with the increase ranging from €30 to €70/hd. The biggest price jumps (€60 to €70/hd) are in weanlings (heifers and bulls) and in lighter steers and heifers. Quality for quality we now have among the dearest weanlings in Europe.
This past 12 months has been remarkable in that seasonality has almost been taken out of Irish cattle slaughtering. For most of the year the kill has been ambling along at between 30,000 and 35,000hd per week.
My theory is that the spread of slatted cattle housing across the country, coupled with high-level concentrate feeding has changed the face of Irish beef finishing.
While older slatted sheds lie empty across Louth, Meath, Dublin and Kildare, slatted "tigheens" across the west and midlands are full of cattle, of which some will be fed for beef. In recent years I have seen many smallish suckler herdowners with a pen of young bulls or heifers, or cull cows even, on ad lib meals, with the intention of selling them for beef.
Last autumn and winter, because forage was scarce and cereals were cheap, cattle were fed very high levels of concentrates. This resulted in strong beef supplies right through the spring. Feeders mightn't have made any money but the pipeline of cattle was there and the beef factory bosses knew that.
This year my impression is that most farmers are OK on forage but if you aim to use this forage to fatten purchased stores the sums look awful. Bernard Smyth, Teagasc's head of beef advisory, reckons that specialist beef finishers will need an average factory beef price increase of 3c/kg a week to make any profit between now and next May.
His budgets show that even with the cheapest Friesian store you will need a spring price of €3.27/kg (116.7p/lb) to make a very modest €50/hd margin. With dearer continental stores the target price for €50 profit is €3.80 a kg (135.7p/lb).