Maximising profit from cattle
Dr Norman Weatherup, Beef Technologist, CAFRE, Greenmount Campus
Finishers - are you buying store cattle every year and working for nothing?
Every year store cattle seem too expensive to buy (to finishers) and sold too cheap (to the seller). Here are some factors that could boost profitability for finishers.
In this article
Benefit from timely marketing
When should you finish your cattle? Keep in mind that:
- Grazed grass is the cheapest feed while winter finishing is the most expensive.
- It is easier to produce clean cattle from grass rather than from a house.
- Steers no longer have to be held until 22 months for second stage BSP and can be marketed earlier.
- Marketing cattle before housing reduces the slurry storage requirement.
- Marketing all cattle off grass leads to a seasonal pattern of sales with lower prices in periods of peak supply.
Benefiting from genetic potential
Replacing an average bull with a BQI Elite Carcase bull can increase returns per calf by £150. This is based on information from the Greenmount hill farm and is achieved through increased growth rate and improved carcase conformation. Do you consider genetic potential when purchasing store cattle?
Animal health
To leave a gross margin of £10/month these basic budgets (for R grade steers and heifers purchased in October 2006) illustrate the beef prices needed.
| 500 KGsteer finished spring 2007 | 400 KGsteer finished off grass summer 2007 | 410 KGheifer finished spring 07 | |
|---|---|---|---|
| Feeding period | 5 months | 11 months | 5 months |
| Purchase (£/head) | 580 | 500 | 470 |
| Grazing/feeding costs | 140 | 150 | 130 |
| Vet/slaughter/sundry costs | 35 | 50 | 35 |
| Total costs (£) | 755 | 700 | 635 |
| Carcase weight (kg) | 355 | 352 | 300 |
| U3 price/KGneeded to achieve £10/month margin before common fixed costs* | 233 | 236 | 234 |
* Keep in mind; Greenmount benchmarking shows that common fixed costs (below) , will be approximately £10/month per finishing animal.
- contractor charges
- machinery depreciation and running costs
- building depreciation and so on,
An even higher price will be needed to cover any allowance for conacre, labour (own or employed), finance charges and mortality.
Is it likely that beef price will exceed 236p when these animals are finished? Whether the answer is yes or no, what can be done to improve efficiency?
- Sell animals at the most profitable fat level and carcase weight. Take advantage of any opportunities to add value to your cattle.
- The Aberdeen Angus bonus added approximately £90 to the value of CAFRE AA steers marketed through the Aberdeen Angus Quality Beef Scheme.
- There are a number of schemes with a range of requirements and bonuses and you should check eligibility carefully before purchasing or marketing cattle.
- Currently the Organic beef price is in the region of 230p/kg. But before this can be achieved there are some significant additional costs.
- Consider the benefits of Producer Clubs – check with your local processor before marketing cattle to take advantage of any initiatives.
Grass
Grass is the cheapest feed – make the most of it!
In a recent CAFRE ‘Beef from Grass project’ involving farmers considered good grassland managers, the liveweight gain of steers ranged from 0.7kg/d to 1.1kg/d over the grazing season. This is a difference of 72KGliveweight 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!
Livestock performance can be increased and fertiliser use reduced when a good quality grass/white clover sward is established. ( Establishing and maintaining clover pastures - http://www.ruralni.gov.uk/index/livestock/grass/grass_management/maintaining_productive_pasture.htm
Silage
Silage quality is the single biggest factor affecting feeding costs. Feeding high quality silage (see Table below) rather than average quality will reduce the cost of producing beef by 12-13p/kg. How does your silage analysis measure up?
Silage analysis from CAFRE, Greenmount, Abbey Farm 2006.
| Cut number | 1 | 2 | 3 | Your Silage? |
|---|---|---|---|---|
| Cutting date | May | June/July | August | |
| ME MJ/KG | 11.3 | 11.6 | 11.3 | |
| CP (%) | 13.8 | 13.4 | 15.1 | |
| DM (%) | 36.4 | 42.5 | 27.2 | |
| HFIS intake value | 90 | 99 | 89 | |
| pH | 4.1 | 4.3 | 4.2 |
( Silage making & Silage analysis explained -http://www.ruralni.gov.uk/index/livestock/beef-index/nutrition/analyses.htm )
Concentrates
Finished rations likely to be at least £10/tonne more expensive this autumn. This will add 2p/KGto beef production costs.
When you purchase concentrates consider group/bulk buying, obtaining discount for prompt payment and using “simple” mixes of straights rather than compound feeds.
It might be tempting to purchase a lower quality ration to reduce costs. This is false economy as performance will be reduced and lead to higher feed costs in the long run.
( Concentrate feeding & rations - http://www.ruralni.gov.uk/index/livestock/beef-index/nutrition/concentrates.htm )
Benefit from timely marketing
When should you finish your cattle? Keep in mind that:
- Grazed grass is the cheapest feed while winter finishing is the most expensive.
- It is easier to produce clean cattle from grass rather than from a house.
- Steers no longer have to be held until 22 months for second stage BSP and can be marketed earlier.
- Marketing cattle before housing reduces the slurry storage requirement.
- Marketing all cattle off grass leads to a seasonal pattern of sales with lower prices in periods of peak supply.
Benefiting from genetic potential
Replacing an average bull with a BQI Elite Carcase bull can increase returns per calf by £150. This is based on information from the Greenmount hill farm and is achieved through increased growth rate and improved carcase conformation. Do you consider genetic potential when purchasing store cattle?
Animal health
Take time to discuss a suitable animal health programme with your vet and consider vaccinating store cattle or weanlings against pneumonia. 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.
Summary
- Budget carefully before buying store cattle
- Grazed grass is the cheapest feed – make the most of it without sacrificing lifetime performance
- Improving silage quality reduces required beef price by 12p/KG
- A good animal health programme can contribute to profits by maintaining a high level of animal performance
- Select cattle of known genetics for performance and manage them well.