Farm Ireland
Independent.ie

Thursday 30 March 2017

Massive margin gap in beef herd

Direct payments and REPS needed to help cover losses

Caitriona Murphy

Caitriona Murphy

Gross margin on the top suckler farms in the country last year was 20 times higher than the bottom one-third of holdings, Teagasc has revealed.

The top one-third of suckler farmers generated a gross margin of €571/ha in 2009, compared to just €24/ha on the bottom one-third of farms, according to the Teagasc e-Profit Monitor.

The gap between the top and bottom suckler farms widened in 2009, the analysis showed.

The gross margin on the top 10pc of farms was €922 more than the bottom 10pc of farms, representing a staggering difference of €37,000 on a 100ac farm.

The huge differential between the top and bottom farms is even more alarming given that all of the farms involved in the Teagasc e-Profit Monitor would be classed as good farms nationally.

Critical

Higher stocking rates and higher beef output per livestock unit were the critical factors that drove gross margin on the best farms.

With a stocking rate of 1.95 livestock units per hectare (LU/ha), the top one-third of farmers carried 0.43LU/ha or 28pc more stock than the bottom one-third of farms.


Despite their higher stocking rate, the top farms also produced 53pc more beef liveweight per animal. The better animal performance was due to better feeding and management, according to Teagasc.

When the top and bottom farms were compared based on output per hectare, the top farms achieved €1,126/ha, a massive €612/hd higher than the bottom one-third of farms.

Only the top suckler farms generated a net profit (€57/ha) when premia such as the single farm payment and REPS were included. The middle and bottom one-third of farmers had to dip into their premia to the tune of €172/ha and €409/ha to cover their production costs.

Weanlings

Meanwhile, the profit monitor recorded a difference of €634/ha in gross margin between the top and bottom non-breeding farms. These are farms where weanlings or stores are bought in and brought to forward store or factory stage.

The top farms recorded a net loss of €14/ha, excluding premia, while the bottom farms had net losses of €409/ha excluding premia.

The top one-third of these feeding and finishing farms had 60pc more land, a 40pc higher stocking rate and produced twice as much beef per animal than the bottom one-third of farms.

The combination of these factors meant the top farms generated an output value €1,504/ha, compared to just €415/ha in the bottom third of farms.

Irish Independent



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