Farm Ireland

Tuesday 20 February 2018

Cattle numbers may well be set to fall but making money from winter beef remains a challenge

Ted O'Sullivan, Bansha, Co Tipperary, shows Julie Brennan some of the heifers at Bóthar's Roscrea collection point
Ted O'Sullivan, Bansha, Co Tipperary, shows Julie Brennan some of the heifers at Bóthar's Roscrea collection point

John Shirley

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).

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On Bernard's budgets, the young bull option, with its inherent efficiency, looks the best option for making a profit (or reducing the loss).

While there has been an increase in meat plants doing deals with feeders for delivery of beef cattle next spring, the prices being mentioned are well below the rates quoted by the Teagasc man. And even if some feeders get good deals it will be at the expense of other farmers.

Larry Goodman in not overly worried if his buyers pay the odd high price, but this must be offset by cheaper cattle so that the average price suits his plans.

If the margins in winter beef are so thin, or even negative, why then do we persist with finishing cattle from the shed?

My impression is that most of the buyers around the rings of today are year-round beef finishers. They are topping up numbers while the cattle supplies are available. Many of the cattle will go to grass again before they are ready for beef.

But even cattle that are killed off grass have to be carried through one or more winters. Even if the animal is semi-starved during the winters, this cost is in the system and has to be carried. Somebody has to carry the cost of winter keep. Even bad silage has a cost.

Despite the highish looking mart prices, if your animals are close to factory fit, pushing them that final step and killing them is usually a better bet than incurring mart fees and extra transport costs.

Also some extra meal feeding pre-slaughter will improve the kill out and possibly lift the carcass into a higher value grade.

Overall, however, making profit from winter beef is again hugely challenging this year. The statistics tell us that beef cattle numbers will be well back for the next couple of years, yet there is no guarantee that prices will jump significantly between now and next spring.

We're back to maximising efficiency at every turn. Growth rate and feed efficiency is far higher with young bulls. But given the swing into bulls, should you talk to the factory outlets in advance?

On the feed front citrus/beet pulps are more competitive this year as are distillers grains. Fodder beet and high-quality maize silage are a little cheaper this year but transport and handling are still the issues.

Can you source a really high-quality feed at a very competitive price? Maybe a food by-product? That would be the real key to solving the cost of winter beef.

Irish Independent