Greater profits returned by calves bought at market
Calves bought at the mart are more profitable than those being reared on suckler cows.
This was the clear message from one of the farm's that formed part of the Irish Grassland Association's beef summer tour.
Figures from top suckler farmer, James Grace, showed that bought-in calves were generating €75/ha more profit than calves reared to beef from his own cows, despite an inflated cost of €340 for purchased calves last year.
With the annual cost of carrying the suckler cow approaching €700, it appears that more and more beef farmers will be forced to look to the dairy herd for beefing stock in the future.
Beef processors claim they cannt halt the declining fortunes of the suckler herd. One of the country's main meat buyers, Paul Nolan of Dawn Meats told delegates that the "hard facts of life means that consumers in Italy or Britain are not concerned with the additional costs of sourcing beef from the suckler herd".
"The beef market is driven by economics. So if the average individual meat spend is €10, it's a question of whether the housewife is going to pick a tray of eight chicken fillets, or four pork chops or two beef striploins," said Mr Nolan.
"This represents 80pc of the market, with the remaining 20pc requiring a real top quality animal. But the vast majority of our requirements are fulfilled by an animal that produces a carcase somewhere between 280-380kg in weight. Whether that animal has come from the suckler herd or the dairy herd is really irrelevant," he said.
Mr Nolan was responding to a question as to whether a premium could be secured for beef from the suckler herd, given that the calves were being reared by their mothers and produced specifically for their beefing qualities.
"There is no extra premium available for sucklers beyond what the QPS grid payment system is able to offer, which is designed to reward farmers for better quality cattle," he added.
Mr Grace plans to rely more heavily on 2-8 week-old bought-in calves in the coming years in order to reduce his workload.
"I plan to reduce my cow numbers from the 63 that I have at the moment to closer to 40 initially," Mr Grace told delegates.
"Instead, I will up the numbers of calves that I buy in. I think that in the absence of the next generation getting involved, I need to look at ways of reducing the workload for myself as I'm pushing 60 at this stage."
Mr Grace buys the majority of his calves from the dairy herd, but he was reluctant to switch his entire system to a calf rearing one.
"I'm never going to get out of sucklers because I don't want to be looking out the window at a field full of P-grades.
"But there's not enough money in suckling at the moment to be able to reinvest in it," he said.
Mr Grace said that he believed that the only opportunity for suckler famers to stay profitable was to breed very fancy stock suited to high value niche markets.
"However, I'm reluctant to go up the grades because that would take a lot more management, which is something that I'm trying to avoid," he said.
The net margin for the calf to beef system was €362/ha, compared to €287/ha for the bulls and heifers sold off his suckler cows. Mr Grace's overall farm performance is among the best in the country, with a stocking rate of 2.2LU/ha and a gross margin of €692/ha. The latter is almost double the average for profit monitor farms.
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