Farm Ireland

Saturday 24 February 2018

Coping with the challenge of cattle finishing

Partnerships offer a way to better stock

Gerry Giggins

The recent increase in the cost of concentrates, due mainly to higher cereal prices, could be the last financial straw for traditional cattle producers, but on the bright side, EU beef consumption (left) is holding up well

Over the past three years, farmers feeding cattle over the winter to service Irish meat factories have consistently lost money or have endured extremely low margins when allowance was made for the labour, housing costs and management time.

It is obvious that strong cattle prices are essential to profitability in the beef and livestock sector. Prices so far this year are 3pc below last year's levels and, at the current level of €3.05/kg, are 15-40c/kg below current EU prices.

Store prices are up on last year's levels by around five or six percent. While this is welcome for the store producer, it does again narrow the opportunity to create a margin from winter finishing.

So far this year, slaughterings are 13pc ahead of last year's levels. Live exports are also up 70,000hd on last year, at 256,000hd up to July 31. Dairy farmers are also retaining more heifers for breeding and using more dairy breeds, so there will be serious supply problems for the industry in the future.

Beef production is extremely valuable to the Irish economy, with an export value of €1.4bn last year and more than 90pc exported to the high-value EU markets. Irish beef is renowned worldwide for its quality and is produced to the highest food-safety standards. Our national herd at the June 2008 census was 6.7m head. Our modern and innovative processing sector accounts for annual slaughterings of around 1.7m head.

Ireland is the largest exporter of beef in Europe and the fourth largest in the world.

The recent increase in the cost of concentrates, due mainly to higher cereal prices, could be the last financial straw for traditional cattle producers. So, how can this important export industry cope with these challenges at a higher level than prevailed last year?

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There should be opportunities for hard-pressed producers and worried processors to work together in an innovative partnership to solve or minimise many of the current financial, supply and quality problems.

This was best demonstrated in Ireland by the emergence of the KK Club back in 1998. This was an imaginative collaboration between Keenan and Kepak and a select group of quality farmers. It brought a heightened awareness to farmers of the quality of beef they should produce. The KK Club enabled farmers to produce and adopt a new production system that ensured that the beef they finished was sold into the top-priced markets in Europe. They initially shared in the added rewards. This process opened up great opportunities for the marketing of quality Irish beef abroad.

Ireland will need to look at innovative ways to finish cattle quicker, to maximise the returns on investment and increase margins.

We need to have cattle finished at the correct weight, achieve a higher kill-out percentage and grade better to meet consumer and market requirements. The cornerstone of efficient supply-chain management is reliable delivery, wich will forecast consistently quality cattle. This will enable the processors to pay a better price.

When it comes to beef production, getting more quality meat from less feed is now essential for survival -- through higher dry matter intakes, faster live weight gain, reduced feed costs per unit of production, quicker finishing and higher annual throughput.

Using innovative feeding methods, livestock producers can optimise the use of home-grown forage and cereals to minimise feed costs.

Some other positives are that EU beef consumption is holding up well. The recession has also increased the demand for forequarters, which is helping to underpin overall market returns.

The view that higher feed cost gives Irish beef producers a greater competitive advantage is ill founded. Pig and poultry production costs will be less affected by higher feed costs than by the level of feed efficiency. Also, the notion that we can finish all our prime animals off grass to improve competitiveness is a flawed concept.

  • Gerry Giggins is an International Beef Specialist with Keenan System, based in Borris, Co Carlow

Key Points

  • Cattle need to be fed correctly when housed in order to reduce the time spent on feed.
  • Farmers should make optimum use of home-grown feeds to cut costs.
  • Improving feed conversion efficiency significantly reduces production costs.
  • Better nutrition improves liveweight gain, grading, kill-out percentages and meat quality.
  • Earlier and faster finish improves meat quality and returns on investment.
  • Younger, earlier finishing reduces quality issues and supply problems for factories.
  • Greater co-operation is essential for the survival of the winter-finishing sector.
  • Forward contracts for a chosen few distorts the supply pattern and allows the industry to secure the balance of requirements at a lower cost.

Irish Independent