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Independent.ie

Tuesday 17 January 2017

Keating legacy is living on as Kepak continues to innovate

John Shirley

Published 25/10/2011 | 05:00

Eighteen years ago Irish beef farming was stunned by the sudden death of Noel Keating, founder and MD of the Kepak Group. At the time Kepak was growing at a phenomenal rate.

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Today, Noel Keating's legacy lives on as the Kepak Group continues to innovate.

The company led an industry some years ago with the establishment of the KK (Keenan/Kepak) Beef Clubs.

This was the first real industry effort at tailoring a section of Irish beef production to suit the high priced Italian market and thereby earn a significant price premium to the farmer.

Putting its money where its mouth is, Kepak's own feedlot on the Dublin-Meath border specialises in Italian beef. The 2,200-place feedlot proved a major attraction at the Irish Grassland Association beef outing last week.

Ironically, to produce the specialist pink lean and white fat carcasses for Italy, demands that top quality young suckler heifers and bulls are finished on a non-grass diet. Most of the 320ha Kepak farm is in a tillage rotation of wheat, barley and maize silage, all of which are fed on site to finish about 3,000 heifers and 2,000 bulls a year.

The finishing period is a minimum 120 days and all cattle are slaughtered under 22 months. Most are killed at 18 months. Maximum carcass weights are 460kg (670-770kg live) for the bulls and 380kg (550-650kg live) for the heifers.

Feedlot manager Greg McCluskey outlined the strict veterinary, feeding and animal welfare regime which is delivering high growth and keeping mortality down to less than 0.5pc.

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The continental bulls and heifers are purchased from all over Ireland, 45pc on farms, 55pc through marts, at 12 to 17 months of age.

Heifers range from 380kg to 500kg and bulls from 380kg to 600kg. Currently the lighter animals are costing €2.30 to €2.50/kg and the heavier bulls about €2.16/kg. They are purchased to grade R or better. Some heifers may be grazed for a period but the bulls go directly into the feedlot.

On arrival the bulls/heifers are rested on a straw bed and then:

•Vaccinated against BVD, RSV, PI3 and clostridial diseases;

•Dosed for fluke/worms;

•Weighed, graded and tagged;

•Tails and backs clipped;

•Sprayed and grouped according to weight;

•Details recorded on computer.

Bulls are then penned either on straw or rubberised slats in a maximum group size of 10. This group is kept together right through until slaughter. Heifers are penned on standard slats but rubberised slats are being trialled.

After a 20-day transition, all cattle are on a standard high quality total mixed ration (TMR) for the feedlot.

Everything surrounding the ration and feeding smacks of precision.

The TMR is constituted at 12.2pc to 12.4pc protein but interestingly the heifer feed is topped up to 14pc protein in order to keep them growing frame and not getting overfat during the 120-day feeding period.

This is delivering a target 8-to-1 feed conversion efficiency for bulls at a gain of 1.6kg a day. Heifers are only slightly behind with a feed efficiency of 9-to-1 and daily gain of 1.35-1.4kg a day.

Currently the TMR per head daily for the bulls includes 2.8kg maize silage, 1kg straw, 3.5kg soda grain, 1.5kg rolled wheat, 1.75kg citrus pulp, 1.2kg molasses, 0.6kg wheat distillers, 0.6kg rapemeal.

Protein percentage is enhanced with feed grade urea or slower release urea product Optigen. A buffer is added (sodium bicarb) and, in an effort to stop initial weight loss in mart-sourced animals, an electrolyte is being tested.

Soya beans and soya hulls are deliberately excluded from the diet to ensure that its non-GM status is not put at risk. Feed cost is currently at €2.70 per head per day for the bulls and €2.20 per head per day for the heifers.

When it comes to slaughter time, the bulls especially are handled with TLC.

This same absolute attention to detail was described later in the day in a paper to the Grassland meeting by beef finisher Patrick O'Leary from Trim, Co Meath.

Finishing young bulls and heifers on a diet similar to Kepak, but including some farm-made grass silage Patrick and his brother Frank compete with live shippers for the top weanlings.

Within the Charolais and Limousin breeds both Kepak and the O'Learys find that the better the quality of the feeding bulls or heifer the higher the chances that they will make a profit.

There is no doubting the quality of the beef produced by the KK farmers, but are the businesses profitable?

During the visit to the Kepak unit budgets for fattening bulls and heifer were shown. In each case a selling price of €3.75/kg carcass-weight was assumed.

Finishing bull budget

Sales (402kg carcass) €1,508

Less purchase €1,030

Mortality €5

Gross output €473

Variable costs

Straw €5

Maize silage €76

Concentrates €208

Vet/medicines €10.50

Slurry and interest €14

Total variable costs €312.50

Gross margin per head €160.50

Sensitivity analysis

+/- 10% in beef price +/- €154.

+/- 10% purchase price +/- €103.

+/- 10% meals +/- €21.

Finishing heifer budget

Sales (325kg carcass) €1,219

Less purchase €874

Mortality €5

Gross output €340

Variable costs

Straw €5

Maize silage €76

Concentrates €178

Vet/medicines €10.50

Slurry and interest €13

Total variable costs €281.50

Gross margin per head €59.50

Sensitivity analysis

+/- 10% in beef price +/- €122

+/- 10% purchase price +/- €87

+/- 10% meals +/- €18

Is this budget, assuming the same selling price for bulls and heifers, the bulls left the higher gross margin. With a staff of five, including office secretary and manager, plus machinery, lorries, etc, the fixed costs are estimated at €70 a head if 5,000 cattle/year are put through the feedlot.

Conclusion

At today's prices for store bulls and heifers, farmers will need well over €4 a kg for beef out of sheds next spring. At the Grassland meeting the talk was that deals are being done with some meat plants for €4.20/kg but I didn't see the contracts.



PS

Arising from last week's item, my point was that soya hulls are better priced than citrus pulp and higher in protein. Also, in response to queries on bushel weights on barley and wheat, one major pig feed compounder rejects barley that is below 64kph and wheat below 69kph.

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