25 December 1998

Premium markets way to £s

Using traditional beef breeds

and organic conversion should

boost suckler profits on the

second spotlight farm in our

series Making Money Out of

Beef. Simon Wragg reports

A MOVE to organic farming while developing a suckler enterprise to withstand the rigours of Agenda 2000 proposals are two driving forces behind plans to improve beef profits on one Oxon estate.

Charles Phillips, managing agent at the 2000ha (5000-acre) Barrington Park Estate, Burford, believes the way forward is to produce beef for premium-paying niche markets. For Mr Phillips that means traditional British breeds, organically managed land and stock, and low input finishing systems.

"What is happening here at Barrington Estate should not be dismissed by small, independent suckler producers. We are doing what every producer ought to be doing; making the most of the resources available to us," says Mr Phillips.

The estate, with 400ha (1000 acres) of permanent pasture, has many physical limitations despite being in an arable area. Long or steep banks, river meadows and parkland may deter the plough but they attract an array of grants. Environmentally Sensitive Areas, Countryside Stewardship and Organic Aid Scheme all add to bottom line profit.

The schemes also veer towards low inputs and extensification, a natural step towards organic conversion which will be completed in July next year, says Mr Phillips. Over the next three years these schemes will add £190/ha (£77/acre) to beef income.

"Moving to organic production is changing the system. We have already slot-drilled clover to help replace artificial fertiliser which may cut variable costs. However, fixed costs may go up as herbicides are replaced by topping pastures," he says.

Likewise, changes to the 240-cow suckler herd have already begun. Since arriving in 1992, Mr Phillips – a breeder of South Devon cattle – has introduced a breeding programme to rid the herd of its Holstein influence. Holstein breeding undermines carcass quality and overloads maintenance costs, he says.

Also gone are the Charolais bloodlines, which proved too temperamental to manage with a small labour force. Two staff – a stock foreman and stockman – look after the suckler herd, 650-ewe flock and 450 parkland deer. Today the suckler herd comprises mainly of Angus X Friesian/Holstein cows put to South Devon or Angus bulls to produce what Mr Phillips calls a double beef cross. While Angus provides quality, South Devon ensures milkiness, growth rate, confirmation and docility. The herd is split between autumn and spring calving to even-out supply of finished cattle.

According to Signets Ian Ross herd management is already quite tight. With a calving rate of 92%, cows calve down over two nine-week periods. "About 60% of each group calves in the first four weeks of that period; a good indication of fertility," suggests Mr Ross.

The unit operates as a closed herd – with heifers calving at two and a half years old – which improves traceability. That is especially important, as all weaned calves are now taken through to finishing at 18-20 months old (table 1) rather than being sold as stores. All cattle are destined for breed schemes, such as Waitroses Angus scheme, although final approval has yet to be given.

Income from traditional beef will be at a premium compared with Continental deadweight prices, believes Mr Phillips. This premium will increase further in two years time when the first calves reared from cows managed under organic guidelines are finished. "At todays prices we will receive £2.40/kg deadweight for organic beef compared with £1.65 for conventionally reared beef," he adds.

But income from beef subsidy is limited, as Mr Phillips explains: "At the present stocking rates, it is not possible to hold on to steers to collect a second BSP and extensification payment."

A financial analysis of the business by Mr Ross shows the unit is in a healthy condition. The estates suckler enterprise adheres well to SAC guidelines that variable costs should be no more than 35% of income, fixed costs no more than 50%, leaving 15% as profit.

Suckler cow income, including environmental schemes, is about £295 a cow, calculates Mr Ross. "That is better than MLC figures for average lowland spring calving suckler herds at £201 a cow. Likewise, variable costs are £136 a cow to weaning compared with an MLC average of £160 a cow."

Setting targets for the suckler herd to achieve over the next year will put an emphasis on fine-tuning rather than a major re-think as many changes have already begun, says Mr Ross. "Most of the steps recommended in the MLCs Making Money Out of Beef document are being taken to ensure the unit remains viable."

But a £100 a cow improvement in gross margin on last years figure of £325 a cow has been set, and includes income from taking calves through to finishing. Heifers could be finished to a slightly higher weight and bull selection, although based on Estimated Breeding Value, will also need reviewing, it is suggested.

Bull selection will be reviewed using data from finishing stock which are electronically tagged and weighed regularly. This data could refine the breeding policy, although specific targets are hard to identify, adds Mr Ross.

For now, Mr Phillips believes the herd is performing well. "There are too many ifs and buts to any proposal under Agenda 2000 to make alternative plans that may affect income. In the short term, income – and the margins achieved – will be dictated largely by the value of sterling."

BETTERPROFITS

&#8226 Traditional breeds.

&#8226 Claim support cash.

&#8226 Organic conversion.

Performance targets for spring-born calves

Stage and weight (kg) Date Days DLWG (kg)

Steers

Weaning @ 275 Nov 1 165 0.5

Turnout @ 358 Apr 15 127 0.9

Yarded* @ 472 Aug 20 56 1.0

Finished @ 528 Oct 10 – –

Heifers

Weaning @ 235 Nov 1 165 0.45

Turnout @ 309 Apr 15 127 0.75

Yarded** @ 405 Aug 20 49 0.95

Finished @ 451 – – –

* Ad-lib silage and 3kg kibbled barley a head a day

**Ad-lib silage and 1kg kibbled barley/soya mix a head a day