Be specific with target markets and boost profit

Improving overall profit is often a tough task, but when it is to improve by E10,000 it is even more of an undertaking. For those attending the Irish Grassland Association Farm Walk and Beef Conference, this was the challenge: To observe the system, come up with alternatives and question their situation at home.

Robin Talbot’s 240-cow commercial suckler herd, run on 228ha (563 acres), is currently 70% autumn calving, but the Talbots plan to go entirely over to autumn calving and increase numbers to 260. Land is predominantly in grass, with a small amount of maize and fodder beet grown off farm.

Profit monitor analysis
Talbot’s (2006) Average (2005)*
Stocking rate LU/ha 1.87 1.78
Liveweight produced/LU 361kg 340 kg
Liveweight produced/ha 675kg 605 kg
Gross output/ha (E) 1,235 903
Variable costs/ha (E) 697 466
Gross margin/ha (E) 538 437
Fixed costs/ha (E) 353 437
Net profit/ha (E) 185 0
* Average of 155 suckler farms in Teagasc e-Profit Monitor Analysis.

Mr Talbot buys in Limousin-cross breeding heifers as replacements put to Limousins in a bid to reduce any incidence of caesareans. Four Belgian Blue bulls are then used over subsequent calvings, because of the strong price given for finished stock.

“Bulls are out for 70 days, giving a tight calving period. Anything not in calf after this point is culled. With replacements costing this year an average of E680 for a 400kg animal and Continental-bred cull cow prices of more than E900, we can have a strict culling policy and replace at about 20% a year.”

Calving as near to 30 months as possible, Mr Talbot believes it is important to allow heifers the chance to complete growing stages and mature fully before being expected to calve. “Calves don’t receive supplementary feed until they are weaned, with weaning taking place when there is enough after-grass to support stock.

“Whereas we used to finish everything off farm, we have moved to selling some animals live, particularly spring born bull and heifer calves which go to Italy at 18 months old.”

Identifying markets and minimising fixed costs are two key reasons why gross outputs are 37% higher on Talbot Farm than the average similar sized Irish suckler herd (see table).

Autumn born bulls are finished out of sheds at 20 months, whereas heifers are finished four months later at grass with ad lib meal being fed for one month before sale. Last year saw both spring bulls and heifers being sold live off-farm for export to Italy. “The plan is to sell a percentage live, depending on price at the time of sale.”

But with parameters continuously changing for the export market, it is important to understand target specification and whether our carcasses meet that requirement, he adds.

Suggestions for achieving E10,000

*To improve profit but remain with the basic system, Pearse Kelly of Teagasc suggested four alternative options, in answer to several key questions set by Mr Talbot.

He wanted to know whether to remain with the current system of farming, move to 100% autumn calving, sell the best weaned cattle live for export or to sell all weaned cattle live.

“Continuing with the current system, selling spring born bulls live at E2.50/kg liveweight and finishing the rest on farm, but increasing numbers to 240 cows rather than 210, would increase profit without raising fixed costs,” says Dr Kelly.

“However, moving to an exclusively autumn calving herd would be more suitable for finishing in a bull beef situation than spring calving.”

And although input costs would rise, the extra output would outweigh this increase to give a higher potential profit.

The option for the most increase would be to continue to sell the best weaned calves for export, enabling the Talbots to achieve a high price/kg with remaining stock being finished on farm.”Moving to selling all weaned cattle live would not be advised, as the increase in cow numbers would mean calving 240 cows for no extra benefit,” he adds.

“Moving to autumn calving is advised which ever system they decide to opt for.

“Without making any significant system changes, increasing number of weaned cattle for the live export market should be aimed for, particularly as the differential price paid for weaned calves from grass-fed systems is high.”

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