Soaring feed costs and low beef prices could mean significant changes at Deer Park Farm, reports Olivia Cooper

Like most livestock farmers, Martin Howlett faces an expensive winter of higher feed and bedding costs, but little scope for higher beef prices. He is likely to reduce stock numbers to their lowest ever.

“Last winter we were £50-£100/head out of pocket on the Continental-crosses, so we’re not planning to buy any more Continental suckled calves this autumn,” he says.

Instead, he will concentrate on his 40 suckler cows, the Angus-cross calves from which go to a rearer in Oxfordshire for Waitrose’s Dovecote Park scheme. He will also buy another 50 Welsh Black suckled calves, to add to the 40 already destined to sell for a premium to local butcher Philip Warren.

So far this autumn he has sold 12 Welsh Blacks to processor Jaspers at Treburley, near Launceston, making 203p/kg for the latest batch.

Break-even

“That is still only just break-even. I believe there is a feeling in the meat trade that prices should rise, but it’s a case of waiting to see which of the big boys are going to make the first move.”

But he was relieved that abattoirs were allowed to open so quickly after the foot-and-mouth outbreak. “It meant that we didn’t have to hold back cattle and that the abattoirs did not have an excuse to drop the price.”

And prices do need to rise to compensate for the higher feed and bedding costs. Mr Howlett has booked 20t of a cereal and protein blend from Cornwall Farmers at £155/t pre-Christmas – £25/t more than he paid last year. And the 45t of wheat straw, fortunately secured at £55/t and delivered last week from Wiltshire, cost £10/t more than last year.

“All told, the higher prices will push our winter costs up £30 a head for the sucklers and £50 for the fattening bullocks,” he says. “We need to see a real, sustainable increase in finished prices to 250p/kg deadweight to bring us to break-even, before accounting for the expensive winter, which will add 20-30p/kg to that.”

Premium market

Even with a premium market, Mr Howlett expects the Welsh Blacks to average just £35/head gross margin this winter. “There are a lot of costs to come out of that and if we weren’t receiving a premium price from Philip Warren that would be a negative figure.”

At current suckled calf prices he can see no justification in buying Continental-crosses this autumn. But if values were to drop, or finished cattle prices rise, he has room in the barn to make the most of the market. “It will be a bit strange not seeing the sheds full – but we still have the option if the price is right.”

However, this year’s poor cereal yields mean he does not have enough home-grown feed to cater for any increase in numbers. “Overall yields seem to be about 1.2t/ha (0.5t/acre) below normal which is disappointing,” he says. The Fuego beans, which were cut last week, averaged less than 2.5t/ha (1t/acre). Fortunately, due to the lower cattle numbers and lack of finishers over the winter, protein requirements should be lower.

But with the current trend in rising cereal prices, Mr Howlett is considering increasing his arable acreage. “We’re trying to be as self-sufficient as possible to take away the vagaries of the marketplace. In recent years it was cheaper to buy someone else’s corn than grow our own, but if the current price trend continues we, like many other farmers, are seriously questioning whether to keep so much in grass.”

Rotation

Mr Howlett therefore expects to plough up an extra 6.5ha (16 acres) of grassland this autumn and put it into cereals, which will fit well into his new, three-year ley rotation. “Our policy in the past was to reseed a five-year ley in the autumn after five years of arable crops, which worked well in a normal year.

“But it’s reliant on a dry autumn, which we haven’t been getting, so last year we decided to undersow winter barley with a grass mix to create a wholecrop followed by a vigorous three-year ley. It’s working very well.”

This way, Mr Howlett can aim for high silage and cereal yields on the productive land, leaving the more extensive grassland to be managed in the Higher Level Stewardship Scheme. “It allows us to make the most of our mixed farm – and we still have 140-150 acres of grass keep to use if we decide to increase our cattle numbers again.”

Mr Howlett hopes to start on the late second-cut of silage this week, having just finished his hay making. “It’s the first time I’ve baled straw before making hay,” he says. Quality is down, but yields have not been too disappointing.

The Belouga and Leeds maize crop looks good, but with a lack of height he expects yields to be about 15-20% down and 7-10 days later than normal. “We’ve been trialling maize on our own land at Deer Park Farm this year, to see if it will grow.” Although the plots proved very disappointing because of the dry spring, several of the seven varieties supplied by Elliott & Bright could be worth following up, he reckons.