CPAS scheme extension has changed rules
By Simon Wragg
BEEF finishers must focus on extensive grass or intensive barley beef systems for Continental crossbred bull calves and avoid mid-term intensive systems for Holstein bull calves to make margins following changes to the Calf Processing Aid Scheme.
Beef consultant David Allen says the scheme, which will run from December 1 this year until Apr 4 next year at a lower rate of £55.85/head, will continue to put an artificial floor in the market for dairy-bred bull calves. Continental crossbred bull calf prices are expected to reduce by £20 improving margins for beef finishers.
"When Limousin x Friesian bull calves cost £85 it should be possible to make a gross margin of £60 at 77p/kg liveweight with a single beef subsidy claim. Thats based on a barley beef ration at £100/t and selling as yearlings at 500kg liveweight. These calves are currently making 85p/kg liveweight so margins should be better," says Dr Allen.
However, Friesian bull calves at £60 are a non-runner on this barley-based system. "Even with a subsidy claim, they need to achieve 75p/kg liveweight for what is often a poor quality carcass, typically O-. These are currently fetching 72p/kg liveweight. The best advice to producers considering this system is to wait."
Two-year crossbred bull beef systems, with a heavy reliance on grazed grass are attractive, says Dr Allen. These can attract two beef subsidy claims and two extensification payments totalling £272/head. "Finished cattle should be sold straight after the second claim."
National Beef Associations Robert Forster says Continental cross heifers continue to look an attractive option, although prices – based on the bobby calf market – probably wont be under £20/head.
When considering heifer systems, Mr Forster reminds producers that while butchers heifers attract high prices they are a small part of the market: "Producers should be aiming to finish heifers to supermarket specification; with a 260kg carcass."
Heifers must be rationed carefully to encourage skeletal development and avoid early maturity. Just as they look like developing into cows, heifers should be fed a higher density energy ration to increase liveweight without becoming too fat.
MLC economist Duncan Sinclair also supports the view that heifers look attractive for some specialist finishers. "Once producers have claimed their first 90 head beef subsidy, crossbred heifers are probably going to be a better bet than unsubsidised steers. For cashflow, heifers finish quicker and to lighter weights," he says.
Dr Allen anticipates that more dairy cows will be put to beef bulls this winter.Too many replacement heifers are being bred and using a beef bull should produce quality cross-bred calves for finishing."
Box please: Title CPAS extension
• Cross-breds down £20/head.
Some mid-term barley beef out.
Potential for two year grass beef.
Rear heifers to 260kg deadweight.