Winter finishers can be much more optimistic about the prospects of making a margin on stock this winter, according to the latest analysis from Teagasc.
"Making a margin on cattle is much more achievable this year," said Teagasc BETTER beef programme manager, Aidan Murray.
"Our analysis of 500-600kg cattle in the marts over the last four weeks shows that prices are back by about 10pc on average. With meal costs also back by €30/t, and up to 150,000 head less to go through the system next year, things are looking a lot more favourable for finishers this year compared to the same time last year," he said.
"Hopefully prices have bottomed out at the factories over the last six months and with supply and demand back in balance, I think there is a much better prospect for prices over the coming 12 months," added Mr Murray.
"I can't see production being cranked up by any of our main competitors, certainly not in Britain in any case. In fact, I've already heard of more British buyers around the mart rings here buying up fancy heifers, so they must think that there's a bit of value on offer.
"I think the sector has steadied itself again, with a lot more buying activity at farm level this month," he said.
Teagasc's beef budget for finishing steers shows that finishers will need a price of €3.59/kg to break even on a Friesian steer with a 326kg carcass. This rises to €4.03 for a Hereford-cross steer, and €4.15 for a continental-cross.
"If a finisher is looking for a €50 margin per animal, he'll need another 15c/kg on top of those prices. But these are only guidelines, since there will be lots of variables from farm to farm," said Mr Murray.
The calculation assumes a purchase price of €1.55/kg for a 500kg Friesian, rising to €2.17 for a 530kg continental-cross. The animals will eat 5-5.5t of good quality 72pc DMD silage, along with 4-4.5kg of meal per day. Kill-outs vary from 52pc for the Friesian to 56pc for the continentals.
Silage was priced at €25/t, while meals were factored in at €230/t. Dosing and veterinary costs were included at €8/hd, with transport and selling costs coming in at €42/hd. Interest on half of the outlay is also factored in at 7pc. However, no allowance is made for mortality.
Daily liveweight gains were assumed to be 0.9-1.0kg on this six-month system, which would incur total costs close to €400/hd.
On bulls, Mr Murray believes that there is a swing by buyers towards younger bull weanlings and calves as finishers seek to ensure that animals make the 16-month cut-off point.
However, calf sellers report that they are down €100-150/hd on the same stock compared to last year, with good-quality calves making €2-2.30/kg.
"There's also evidence of lads trying more heifers this year to try to reduce their exposure to the risks associated with finishing bulls," said Mr Murray.