Farm Ireland

Saturday 24 February 2018

Margins less tasty than the beef

John Shirley

I attended two interesting events of cattle breeding last week. The first was a calf-to-beef trial based on Angus and Hereford cross calves born in the dairy herd. The second event saw the launch of the new ICBF Maternal Index for suckler herds.

The calf-to-beef trial is under way at the Teagasc facility in Johnstown Castle, Co Wexford and the first results have just come on stream.

The day represented one of the most rounded beef days ever held by Teagasc linking production, breeding, branding, processing and marketing.

We had the scientists reporting on the field measurement and research. We had the Angus and Hereford breed societies who got out and found premium branded markets for their cattle. We had ABP beef plant bosses who process and deliver the branded beef to its full potential. This gave the opportunity of feedback from end user to the producer.

The trial is sponsored by ABP, along with Irish Hereford Prime and Certified Irish Angus, and takes spring-born heifer and male calves and rears them on a primarily grass diet to finish over a range of ages, starting at 19 months for the heifers and ending at 23 months for the steers. The idea of staggering the slaughter age is to level out the seasonal beef supply pattern. Real markets demand product 52 weeks a year.

Over the years, Angus and Hereford breeders have felt excluded from Teagasc beef events. This was their day in the sun (notwithstanding the steady southeast drizzle) with eating quality to the fore. The tenderness and flavour of beef sandwich on offer to visitors would have one looking for more.

The first animals in the three-year trial have been slaughtered. So far, the performance targets for daily gain and carcaseweight and grade are being reached with the 19-month heifers averaging about 235kg carcases. The live animals on show were healthy and thriving. Herefords tended heavier than Angus. Maybe a few would struggle to get into the minimum O-grade carcase.

The disappointing aspect is the low-budgeted profitability. Based on an average carcase price (including bonuses) of €4/kg, the margin over direct costs ranged from €578 to €739/ha. Margin over total costs was only €144 to €165/ha.

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The problem was that calves coming into the system were too dear. An average of €250/hd for the Hereford/Angus heifers and €300/hd for the bulls reflected the actual market but was described on the day as "irrational exuberance" on the part of the buyers.

Given that the dairy cross calf is only a means of getting the dairy heifer into milk, I would have thought that a fairer price would be €200/hd less than was paid last spring. At this stage, the dairy cross weanlings would struggle to reach last spring's calf price.

There may be scope for increasing the margin per hectare by upping the stocking rate. Teagasc's Padraig French reckoned that the dairy cross heifer to 19 months will consume 2.5t of grass and silage dry matter. An output of 7.5t of DM/ha will carry three animal units through to beef. If you increase the grass output to 10t/DM/ha (as per the Grange Derrypatrick Herd) this could finish four animals per hectare.

The brand premiums for meeting the specs are substantial; up to and over €100/hd depending on grade, season and weight. Are they sustainable?

The fact that mince from Angus and Hereford can now earn a market premium is a huge help in supporting the bonus price. An ABP spokesman said that the factory handles the beef with utmost care to ensure top eating quality. Cattle are slaughtered within an hour or two of arrival, while the glycogen is in their meat. The meat pH is tested to ensure proper ageing.

For the foreseeable future demand for this high quality product exceeds supply for most of the year.

Indo Farming