Key points:

• Data from a sample of 34 mainly bull beef finishing enterprises gave, on average, a net margin (excluding non-cash costs) of -£19.57 a head for 2005/06, based on an average group size of 47 animals.
• The top third had a better balance between output and total costs, particularly variable costs. They achieved the highest daily liveweight gains. Variable and stock costs were £85 a head lower than the average due to better targeted use of feed. They fed 12% less concentrate per animal than the average and they also had the lowest feed price. The feed conversion ratio was 4:1 compared with the average of 5.2:1.

• Lower fixed costs also contributed about £35 a head compared to the average and £79 when compared with the bottom third group. Paid labour and power and machinery were much lower than the average. When the value of family labour is considered, top third units still had a total labour cost 40% less than the average and less than half the bottom third producers.
• On average, intensive finishers made a £20 a head loss before consideration of non-cash costs. Once these were considered, the deficit stood at £74 a head. However, increased finished prices during 2006 ought to partly address this deficit, although feed and energy costs will have also risen. Top third producers made a net margin of almost £76 a head, even after all non-cash costs were taken into consideration.

• Achieving sound, technical and well balanced cost control is the key to profitable intensive beef finishing.
  
  

  FINANCIAL PERFORMANCE 2005/06 [£/HEAD]
  	Bottom third	Average	Top third
  Number of herds in sample	12	34	12
  Average herd size (head)	61	47	41
  OUTPUT (£/HEAD)
  Stock sales after valuation changes	605.01	624.03	641.72
  VARIABLE AND STOCK COSTS
  Stock purchases	336.98	322.98	265.51
  Variable costs
  Total concentrates	159.71	136.32	115.38
  Other feeds	58.61	47.68	47.34
  Forage	8.62	7.45	0.79
  Total feed and forage	226.94	191.45	163.51
  Veterinary	8.00	7.19	7.32
  Bedding	26.33	22.37	21.67
  Other costs	22.39	25.74	26.87
  Total variable and replacement costs	620.63	569.73	484.88
  Gross margin	-15.62	54.30	156.84
  FIXED COSTS
  Paid labour	33.23	20.74	8.69
  Power and machinery repairs	27.04	16.67	9.53
  Administration	14.09	8.50	3.23
  Property charges	8.13	5.15	2.63
  Land resource costs (eg land rent)	18.27	11.53	8.06
  Machinery depreciation and fixtures	17.09	11.30	6.75
  Total fixed costs excluding non-cash costs	117.85	73.87	38.88
  Net margin excluding non-cash costs	-133.48	-19.57	117.96
  NON-CASH COSTS
  Value of unpaid family labour	40.73	30.99	24.64
  Rental value of owned land	9.10	6.33	3.21
  Interest on working capital	20.31	17.47	14.35
  Total non-cash costs	70.14	54.80	42.21
  Total costs	808.63	698.39	565.98
  Net margin including non-cash costs	-203.62	-74.37	75.75

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