2 November 2001

MLC forecasts a £189 margin

FINISHING pure dairy bulls could leave a gross margin of £189/head next year, says the Meat and Livestock Commission.

This is based on a £10 calf cost, 12-week rearing charge of £60 and feeding 2.1t/head of finishing concentrate costing £100/t. Each bull will also use 2t of straw.

When vet charges and sundries are added, total variable costs amount to £375/bull. Assuming an end price of 140p/kg, a 280kg carcass is worth £392, so the system generates less than £20/head to cover fixed costs.

Slaughter premium

But even after modulation, producers receive a beef special premium worth £124/bull and a £48/head slaughter premium. Together these payments boost the gross margin to £189/bull.

"The key to making pure dairy bull finishing pay is the beef special premium, which must be available as it contributes nearly 60% of the overall gross margin," says Duncan Sinclair, a senior MLC economic forecaster. &#42