Business Farming

Tuesday 23 September 2014

Top beef men losing money despite 2013's record prices

Martin Ryan

Published 02/09/2014 | 00:00

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Eight year-old Ben Pearson from Ballacolla Co Laios with his Belgium Blue bull calf that was a class winner at Dualla show in Tipperary at the weekend Jennifer O'Sullivan
Eight year-old Ben Pearson from Ballacolla Co Laios with his Belgium Blue bull calf that was a class winner at Dualla show in Tipperary at the weekend Jennifer O'Sullivan
Beef farmers are still losing money
Beef farmers are still losing money

Beef farmers were left nursing losses of up to €152/ha last year despite beef prices at the factories hitting a record high in 2013.

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The shocking statistics were revealed in the latest 'profit monitor' data from close to 900 of Teagasc's best beef farmers.

Even after subsidies of close to €560/ha were included, the bottom 10pc of suckler-to-beef farmers were left with a miserable €27/ha profit for their efforts.

The subsidies included all Single Farm Payments, environmental payments and top-ups for participation in beef schemes. Losses were even greater in the bottom 10pc of profit-monitor farmers that sold their weanlings and farms that had no breeding stock.

The bottom third of all weanling producers included in the figures made a loss of €10/ha even after receiving direct payments amounting to €438/ha.

At the other end of the scale, the top 33pc of non-breeding beef farms cleared close to €1,000/ha when all direct payments were factored in.

The averages will also make sobering reading for those hoping to earn a livelihood from the sector.

Average income after all direct payments for weanling producers was less than €340/ha, but this was only before farmers had eaten into almost a third of their EU payments to cover losses of €152/ha. Farmers bringing their stock to slaughter faired slightly better, with their enterprises breaking even before subsidies are included.

The figures come from beef farms that appear to be harnessing the full value of EU farm payment regimes. In addition, they were stocked at 1.85 livestock units (LU) per hectare in the case of the suckler-to-beef farms.

The key difference between the high performance farms and the rest is the level of output per hectare, with the top third of non-breeding beef farms grossing three times that of the bottom third.

Rising costs

Pearse Kelly, head of drystock knowledge transfer at Teagasc, said that the figures were a very reliable sample of the performance of the top 30pc of all best farmers.

Mr Kelly added that 2013 ouput values rose by €44/ha due to a €0.06/kg increase in average beef price to €2.24. However, margins were hit severely by rising production costs.

"The three main areas where variable costs increased were concentrates and fertiliser, which were both up by €42/ha, along with an €18/ha in contractor costs.

"There was also a rise in variable costs, which can be attributed to the very poor grass growth in the first half of 2013 and an extended housing period in 2012," he said.

Prices in meat plants this year are back by 15pc, but sales for stores and weanlings appear to be holding at prices similar to 2013.

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