30 August 1996

Winter steers – 105p/kg forecast

BEST predictions available would put the average finished steer at about 105p/kg at the end of the coming winter, according to Dr Basil Lowman of the Scottish Agricultural College.

He has produced break-even purchase prices a kg liveweight for a range of finishing prices and for a range of silage costs (see table).

Assumptions made are purchase lw 380kg, sale lw 545kg, daily gain 0.9kg, 5.5t/silage, 400kg concentrates at £115/t, other costs £36, interest £15 and labour £5.

Cost of straw bedding has not been included, but in remote areas could reduce break-even purchase prices by about 5p/kg.

The example does not allow any margins for extra fixed costs or make provision for profit, says Dr Lowman.

Two purchase prices are presented in the table, the main one being the break-even purchase price for steers which are not eligible for BSPS payment. In brackets are the break-even prices which can be paid for steers which receive 90% of the 1996 BSPS and extensification payment at £111.60p/head.

Assuming finished prices are around 105p/kg next spring then the maximum to pay for steers on which BSPS has already been claimed would be 115p/kg.

If, however, the steers are eligible for BSPS payment the break-even price would be 29p/kg more.

If however there is the option to sell silage at £10/t then the break-even purchase price for steers would drop to 137p if BSPS payment can be claimed or 108p/kg if the subsidy has already been claimed.

&#8226 Next week we examine the options for retaining rather than selling stock.


Break-even purchase price (p/kg) for winter finishing steers

Sale price (p/kg)

95100105110

Silage costBreak-even purchase price (p/kg) without BSPS (with BSPS)

(£/t)

5101108115122

(130)(137)(144)(151)

1094101108115

(123)(130)(137)(144)

158794101108

(116)(123)(130)(137)

20798694101

(108)(115)(123)(130)