Key points:

• Data from 41 LFA suckler herds showed, on average, a net margin (excluding non-cash costs) of -£170.09 for 2005/06, based on an average herd size of 67 cows.
• Comparing the net margin of the top third to the bottom third shows a £253 a cow difference - similar to the 2004/05 results.

• Total cost management emerged as the key driver behind top third performers, particularly the balance between herd size and total labour costs. While output was slightly lower than average, more targeted use of feed and less bedding costs meant variable and replacement costs were £18 a cow lower than average and £54 a cow less than the bottom third units.
• Fixed costs of top third units were virtually £90 a cow or 28% lower than the average. Lower paid labour was one of the major contributors along with machinery and depreciation costs.
• Fixed costs for bottom third units were £131 a cow higher than average and almost double that of the top third units. Paid labour on these units was nearly double that of the average. Even taking account the value of family labour, total labour costs on the bottom third units was still £50 a cow higher than the average and almost £100 higher than on the top third units.

• Higher finished cattle prices during 2006 are expected to boost suckled calf returns for the coming year.

Back to the 'Business Pointers Guide'