Finisher costings give CAP hope

A SUBSTANTIAL proportion of English beef finishers will be going into 2005 well-equipped to rise to the challenge of producing without headage payments, reveal the latest annual enterprise costings results from the English Beef and Lamb Executive (EBLEX).

Initial 2003/4 costings for intensive beef finishing businesses, likely to suffer more than most under area-based Single Farm Payments, show the top third of enterprises making a useful profit on every animal after excluding subsidy receipts; and even more encouragingly, doing this without significant advantages of scale and with significantly higher feed costs and lower market prices than today.

After all variable and fixed costs, the top third performers made a net margin of £25/head in the year, with concentrate costs averaging £105/t and deadweight sale prices 1.83/kg.

This performance was almost £100 more than that of the average £65/head loss for all costed finishing enterprises, despite a similar business size, daily gain, and concentrate and sale prices.

The very few fundamental differences evident between the top third and average enterprises underline the potential the majority of English finishers have to make a profit without headage payments through attention to detail in all aspects of their businesses.  All the more so at current concentrate and deadweight prices.

In particular, the costings suggest the primary improvement emphasis should be on:

• Better tailoring of diets to performance to reduce concentrate and other feed wastage;
• Better stock purchasing and heavier finishing to maximise overall output; and,
• Better control over fixed costs, especially labour, power and machinery.

EBLEX English Intensive Beef Finisher Enterprise Costings 2003/4


Top Third

Herd size   49 51
Deadweight sale price    £1.79/kg £1.83/kg
Carcase weight  319 kg 343 kg
Feeding period  270 days 281 days
Liveweight gain  1.32 kg/day 1.33 kg/day
Concentrates used  1,386 kg/head  1,271 kg/head
Total output £459/head £529/head
Total variable costs  £254/head £226/head
Total fixed costs   £81/head £61/head
Net margin *  £124/head £242/head
Subsidies   £189/head £217/head
Net margin excluding subsidies –  £65/head £25/head

* Includes private drawings but excludes the value of unpaid family labour