Grazing of purchased store cattle
Dr Norman Weatherup, Beef Technologist, CAFRE, Greenmount
Prices paid for store cattle seldom bear a close relationship to beef price and would often suggest that many finishers will not make a profit! On the other hand, it could be contended that suckler cows are unsustainable, even at current store prices. This article considers some factors affecting profitability of finishing beef cattle.
Buying price
"The day you buy is the day you sell" is an old saying which is particularly true in "short-keep" systems but which can be reduced in impact through "long-keep" systems. For example, paying £20 extra for a dropped calf will have less of an impact on profit than paying £20 extra for a 650kg bullock to be finished in the near future.
Selling price
It is becoming more and more difficult to forecast prices. This has been compounded this year by the ending of OTMS, decoupling of subsidies and the anticipated start to exports. However based on current costings and returns it is unrealistic to buy expensive store cattle now in the hope of a substantial price rise later this year.
To maximise returns, animals must be marketed at the optimum fat level and carcase weight and sold under FQAS as the current price differential of £30/head is a substantial additional return. Farmers should also consider joining a producer/processor partnership to take advantage of any bonuses for particular classes of stock, e.g., butchers’ heifers or organic beef. The close link to a processor should allow relevant market signals to go back quickly to producers. For example, the Aberdeen Angus bonus has added approximately £90 to the value of CAFRE AA steers marketed through the Aberdeen Angus Quality Beef Scheme. However, there are a number of schemes with a range of requirements and bonuses and producers should check eligibility carefully before purchasing cattle.
Clean cattle marketings autumn 2006
A number of factors may combine to increase the numbers of slaughter cattle marketed next autumn.
- The majority of suckler herds are spring calving and therefore producers may elect to market cull beef cows after the calf is weaned this autumn.
- It is easier to produce clean cattle from grass rather than from a house.
- Decoupling of subsidies means that steers no longer have to be held until 22 months to avail of the second stage BSP and hence they can be marketed earlier.
- Marketing cattle before they are housed reduces the storage requirement for slurry.
Autumn beef prices may be disappointing if there is a significant return to a seasonal supply situation.
On the other hand there are still a significant number of cows born before 01/08/96 or with other critical APHIS statuses that cannot enter the food chain. Replacing some or all of these animals during the next three years will reduce the number of heifers available for slaughter.
Cattle management
If cattle are purchased it is important to ensure that they reach their full potential while achieving the desired specification. Store cattle should not now be offered any concentrates for 4-6 weeks before turnout if they are on average quality silage to ensure they are in condition score 2 to maximise performance at grass.
Grassland management
In a previous CAFRE Beef from Grass project involving farmers who were all considered good grassland managers, liveweight gain of steers ranged from 1.1kg/d to 0.7kg/d over the grazing season. This equates to a difference of 72kg liveweight at the end of the season. It would take at least two months to put on this weight in the house next autumn at a cost of at least £60! Grass is the cheapest feed – make the most of it! In addition, livestock performance can be increased and fertiliser requirements reduced when a good quality grass/white clover sward is established.
Animal health
This winter pneumonia has been a problem in many housed cattle and an outbreak of this disease could wipe out a season’s profits. Take time to discuss a suitable animal health programme with your vet and consider vaccinating store cattle or weanlings against pneumonia or IBR. Consider making any changes to the building design to improve ventilation if pneumonia has been a problem. As far as possible avoid mixing stock of different ages in the same airspace and minimise stress by ensuring that each animal has adequate feeding space. Young stock that were regularly wormed with effective products in their first year at grass will require further treatments for worms this summer. This programme should also be discussed with your vet.
Budgets for R grade steers and heifers purchased Feb 2006
| 500 KG steer finished off grass |
400 KG steer finished winter 2006/07 |
380 kg heifer finished off grass |
|
|---|---|---|---|
| Feeding period | 8 months | 10 months | 6 months |
| Purchase (£/head) | 560 | 475 | 420 |
| Grazing/feeding costs | 65 | 125 | 60 |
| Vet/slaughter/sundry costs | 35 | 40 | 35 |
| Total costs (£) | 660 | 640 | 515 |
| Carcase weight (kg) | 375 | 353 | 288 |
| * Price / kg needed to achieve £10/month margin over common fixed costs** | 213 | 238 | 221 |
* This price/kg relates to the "R" grade, another 6p/kg must be added to reach the quoted "U3" price.
** Greenmount benchmarking has shown that common fixed costs, e.g., contractor charges, machinery depreciation and running costs, building depreciation etc.) will be approximately £10/month per finishing animal. An even higher price will be needed to cover any allowance for conacre, labour (own or employed), finance charges and mortality.
Summary
- Budget carefully before buying store cattle
- Beef prices could in future be disappointing at times of peak supply
- Grazed grass is the cheapest feed – make the most of it without sacrificing lifetime performance
- Consider utilising grass/white clover swards
- A good animal health programme can contribute to profits by maintaining a high level of animal performance
- Consider how one of the DARD development service programmes such as Business Challenge, Animal Health Challenge or Benchmarking can assist you in planning the future direction of your business.
