Achieving more than £100 a head on Holstein bulls is perfectly feasible in 2007, despite increased costs, according to the latest figures published by EBLEX.
The current average of 185p/kg for -03 dairy bulls, up 25p/kg on this time last year and 45p/kg on projections prepared last autumn, is up in spite of the reintroduction of more than 150,000 cows and 45,000t of cow beef to the food chain due to the OTM rule change, says Duncan Sinclair, MLC economics manager.
“The development of export markets, sitting at 900t a week of both prime and cow beef, is progressively increasing and the rolling shortfall of manufacturing grade beef across the EU is seeing a rising demand for dairy bull and cow beef,” says Mr Sinclair.
But Dorset black-and-white bull finisher, Richard Hoskin believes these figures are too generous.
“Costs like fuel, grain and fertiliser are all rising, which exerts a downward push on the bottom line.”
With milk producers leaving the industry at a frightening rate, Mr Hoskin believes bull calf prices will continue to rise.
And not only this, those leaving milk production may be tempted by contract calf rearing.
“These factors, twinned with increasing exports of quality calves to the Continent, will mean suitable calves may become difficult to find at a decent price,” says Mr Hoskin.
“I am positive for the future.
But if there is to be a margin it will depend on keeping costs to a minimum and not budgeting on low calf and input prices,” he adds.
But even with these cost increases bull beef should still leave a margin, reckons Mr Sinclair.
“Projected costings have budgeted calf prices at £40 a calf and realistic increases in feed price have been factored in.
Anticipated gross margins suggest Holstein bulls finishing at 12 months in 2007 could fetch 185p/kg,” adds Mr Sinclair.