Lost subsides threaten beef
WITHOUT A MARKET price of 2.25/kg deadweight for beef cattle the bottom third of producers could be lost from the industry, producers have been warned.
Simon Marsh, senior lecturer on beef production systems at Harper Adams University College, said a historical reliance on subsidy income to support beef units could be damning, particularly among suckler herds.
“EBLEX figures suggest subsidy income accounted for roughly half of income among suckler herds, falling to just under a third for finishing units,” he told the meeting.
Management had been tailored to maximise subsidy income, but that must change fast in the new decoupled era. How much single farm payment would be needed to subsidise beef enterprises, he asked? “The target must be none.”
Traditionally cattle were kept longer to take a second draw of subsidy. As finishing periods increase feed conversion efficiency declines. For example, intensive beef has a feed conversion of 5:1 for a 300kg carcass. But this falls to 9.8:1 for a 360kg carcass on 28-month beef, explained Dr Marsh.
“However, depending on the balance between feed cost, carcass weight and value, longer finishing systems could be more profitable.”
A move to US and Australian-style extensive finishing systems where stock remained outdoors avoiding growth checks, but were brought in to feedlots for a final two to three-month intensive finishing phase may pay dividends, he said.
Labour costs remain a concern. Using wood chip corrals to replace winter housing and incorporating self-feeding systems into beef enterprises may cut costs for some, he suggested.
Breeding also needs to be improved. Estimated Breeding Values should be used when selecting replacements and terminal sires – with more emphasis on ease of calving for the latter helping cut husbandry costs at calving, estimated to range from 81 a cow to 298 a cow where a caesarean is required.
“Managing stock at grass is also important. A sward height of 6.5cm could sustain a liveweight gain of 0.84kg, but increase that to 9cm and we can get 1.17kg a head a day.”
The impact of the relationship between feed cost and sale price for finished stock – particularly for Holstein bulls – had hit home at Harper Adams, added Mr Marsh. “With a calf cost of 25, variable costs of 100 and fixed costs of 10 a head a month we are only just supporting ourselves in this venture,” he suggested.
With a sale price of 2.05/kg deadweight (for an O grade carcass Holstein bull) a margin of 235 a head could be achieved where feed cost 95/t. But this fell sharply to 164 when feed rose to 120/t and was just 105 at 145/t, he added.