Costs and customers key to beef and sheep profits

Farmers should focus on what their customers want and gear their systems accordingly. Combining this approach with attention to detail in feeding to growth and finishing targets provides a road to profitability.

This was the message from an open meeting held at John and Rachel Gate’s Langford Farm, Lostock Green in Cheshire. The farm is a Livestock Northwest Beef and Sheep Monitor Farm, supported by the RDPE Programme and Reaseheath College.

Set clear targets

Peter Kennedy of Dunbia, the meat processor and wholesaler, told the meeting what their customers are looking for and how this dictates what they require from their farmer suppliers. “The priorities for our customers are safe meat products, with high and consistent quality and from known production standards. This means that we need to drive certainty into the production process, and this is achieved through measurement at both the processor and farmer levels in the food chain.

“For cattle, we are looking ideally for a 280-380kg finished animal which is class 2 or 3 in fat, with confirmation at E or UR, although O+ is also useful,” Mr Kennedy told the meeting.

He also explained how fat class in lambs affects processing, “At class 4L we will lose 3.0 kg in fat during processing, but this is reduced to 1.5 kg at class 2L and to only 0.7 kg at class 2.

“The effect of the recession has been that consumers want cheaper forequarter cuts rather than more expensive hindquarter meat, but despite this we urge farmers to focus on hitting weight, fat and confirmation targets. The best way to achieve this is to measure what you are doing and respond to feedback from processors.”

Measure and feed to a plan

Once farmers have set their targets for finished stock and are monitoring progress, feeding should be planned to produce meat efficiently. According to Mike Mortimer of Mortimer Feeds, Macclesfield, Cheshire, this means knowing the quality and cost of feed, as well as how efficiently it is used. “For beef breeds you should be in the range of 5.5 to 6.5kg dry matter of feed for every 1kg of liveweight gain, and every day it takes 11 MJ of energy to maintain every 100kg of animal (for example, 22 MJ for a 200kg animal) plus 47 MJ to put on 1kg of liveweight. So if you need your 200kg animal to put on 1kg a day to reach your finishing targets, then you need to feed 69 MJ.”

Mr Mortimer went on to explain how feed conversion efficiency impacts on costs and therefore profitability. “A standard silage plus barley finishing diet will cost about £200/t dry matter to feed. When your feed efficiency is 6.5kg feed to get 1kg liveweight gain, then it’ll cost you £390 to put on 300kg of liveweight. By greater attention to detail in silage making and feeding, getting that feed conversion down to 5.5kg feed dry matter for every kilogramme gain will reduce the feed cost to £330 – and that £60 can have a big impact on profitability.”

Get close to your customer

The Monitor Farmer, John Gate, sells three finished heifers and 15 lambs every week to local Littlers Butchers in Northwich. Darren Shepherd, who buys from Mr Gate, explained how the lamb price had been a bit too strong for housewives and were reverting to chicken as a result. “But consistent high quality is important in maintaining customer loyalty, so we need the same narrow band of quality as the big processors and wholesalers, and we need that standard 52 weeks of the year.

“We have a close relationship with Mr Gate and that is invaluable, he knows what we want and the door is open to our feedback.” For beef, Mr Shepherd sees an optimistic future: “We think beef prices can remain quite high as our shopping customers have got used to them being at that level.”

So, different customers want similar high and consistent quality, but they also want to be close to farmers who are setting their targets for finishing, measuring progress and delivering results. If this can be done with efficient feeding, then profitability can be maximised.

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