28 November 1997

Trim costs if you want to survive

Suckler herd market returns

wont increase much, so you

need to look to your costs,

producers will be told

SUCKLER herd operators who want to be in business in the year 2000 will have to look closely at every facet of their current systems.

How to do this and correct identified weaknesses will be featured on the Signet Farm Business Consultancy stand at the Winter Fair. Consultants will highlight the key factors that allow the best producers to achieve higher than the average margins.

"We cannot expect much increase in average market returns for some time, so survival is a case of trimming fixed and variable costs, producing premium earning superior stock, and marketing them well," says senior consultant David Evans.

"Suckler herd margins vary greatly, which provides scope for much improvement on many farms. As the calf is the only output of a suckler cow every effort must be made to maximise the number of calves weaned a cow, and the weight and price/kg received.

"Margins can be increased by using superior bulls with high beef values. Improving growth rate by 0.1kg/calf/day will increase the income of a 60-cow herd by £1700 a year. Bulls with good muscling score EBVs produce better conformation calves that can earn a premium of 5p/kg, or £850 over 60 calves."

Better herd management that raises conception rate by 10%, reduces the number of barren cows by two, and leads to a shorter calving period can increase the margin of a 60-head herd by £1400. Getting all the key factors right would bring a benefit of £65 a cow he points out.

"Producers need to do their sums. They cannot decide what to do until they know how badly the drop in price affects their businesses. The beef enterprise must be reviewed and its strengths and weaknesses recognised."

Input costs/kg of beef produced must be compared with those of other similar farms. Machinery and labour use, borrowing arrangements, growth rates, grass use, feeding policy and marketing are just some factors where adjustment could bring considerable benefits.

Mr Evans says much can be gained from improved grazing management.

Signet senior consultant David Evans says its important to compare your input costs/kg of beef to those of similar farms.