24 March 2000

Subsidies key to making the best gross margins

A GROSS margin an animal of £100 is possible for Holstein bulls, but depends on claiming subsidies, high management standards and low fixed costs.

That is the view of Greenmount College beef and sheep adviser, Frank Foster. "Maximise all sources of payment by claiming slaughter premium and checking whether you qualify for extensification premium and beef special premium. Also, make use of existing sheds rather than building new ones."

Selling bulls at the optimum time was also necessary to achieve reasonable margins, he said. "After 14 months old, feed conversion efficiency declines from about 5:1 to 9:1. Cattle should be slaughtered before this decline to avoid losing money."

Selecting cattle with the correct fat level for slaughter was also crucial to maximise returns, said Eddie Boyd from Northern Irelands Livestock and Meat Commission.

"There is little that can be done to influence a Holstein bulls conformation score, it will be either an O or a P. However, producers can ensure it is finished correctly. Fat cover should be either three or 4L. When a bull looks and feels as though it is fat level three it will die a two. Bulls always kill out leaner than they appear on the hoof."

Of 16 Dungannon Meats Holstein bulls slaughtered so far, carcass weight has averaged 245kg, killing out percentage 53% and carcass grades have ranged from O to P. Average carcass value came to £330, said Mr Foster.

"Dungannon Meats was able to claim BSP and first-tier extensification premium on these bulls, totalling £105 and slaughter premium of £17. Deducting costs, this leaves a margin of £105 an animal." &#42