Teagasc Issues Guidelines on Beef Profits
Issued 31thOctober 2001
The price of beef next spring will need to be a minimum of 86p per pound if beef producers are to make a modest profit over the coming winter, according to a leading Teagasc beef expert.
Bernard Smyth, Chief Beef Adviser with Teagasc, said that at current prices for cattle in livestock marts, the margin on winter feeding would be a modest £50 per animal assuring that the price for continental steers is a minimum of 86p per pound next spring.
The corresponding price for Friesian steers would be 80p per pound and 88p per pound per Herefords.
Mr Smyth based his analysis on a current price of £117 per 100kg for continental cattle, still eligible for one Special Beef Premium payment. He conceded that some farmers had paid more than this, especially for progeny from the suckler herd, and warned that some of the high prices paid in marts will make profitability of winter beef finishing a very precarious business.
Speaking in Tullamore at the first of seven regional beef conferences run by Teagasc and Bord Bia, Bernard Smyth emphasised that only farmers who achieve extremely high levels of animal performance would make a margin of £50 per animal. Also, overhead costs must be low.
He said it is vital that only animals who will be sold before they reach 30 months of age should be purchased by farmers.
''Beef from animals under 30 months is now an absolute requirement in all consumer markets. Winter finishing of beef is risky at the best of times. But to attempt to finish animals who will be over 30 months at slaughter is taking on an intolerable risk'', he said.
The Teagasc beef expert advised beef farmers to spread the risk by purchasing a combination of steers, heifers and weanling stock. This will extend the sales period and reduce the risks involved.
He also stressed the importance of maximum animal performance to profitability. A difference of just 35kg in the weight gain of an animal over a 17 months period is the equivalent of 6p/pound in the final price of beef.
Detailed financial budgets for a range of beef production systems have been produced by Teagasc. These provide guidelines on economics of beef production and the impact of beef prices over the next 12 months.
Mr Smyth urged farmers to avail of the special Teagasc computer programme which enables the purchase and sale price and profitability to be calculated for each farm. The service is available from all Teagasc offices.
