Calculate premium values

By Philip Clarke

LIVESTOCK farmers wishing to claim suckler cow premium on their heifers, as permitted under Agenda 2000, must pay close attention to the bottom line before reshaping their businesses.

“Changes to the suckler cow premium rules allow for up to 20% of an individuals claim to be made on heifers,” says James OBoyle from Greenmount College in Northern Ireland.

“For many, this change will impact on farm policy, because premium accounts for over half the receipts on most beef and sheep units.”

The optimum decision will depend on whether heifers are currently retained on farm, additional housing is required, extra land is rented and labour is readily available, he says.

To highlight the point, Mr OBoyle has looked at different cases that have varying effects on farm profit.

“The examples I have examined represent only a few on-farm situations, but clearly demonstrate that there is no single recommendation relating to the 20% heifer claim,” he says.

“In general, however, it appears that farmers producing weanlings only would be financially better off by reducing the overall number of suckler cows and claiming premium on some of their heifers. They may also gain from fixed cost savings and lower fertiliser use.

“But farmers finishing their progeny should not cut back as any gains in premium will be outweighed by lost revenue from cattle sales. If anything, they should lease in extra quota as a way of maximising total farm income.”