Extensive cattle finishing

Key points:



  • Data from a sample of 60 mainly steer and heifer beef finishing enterprises gave, on average, a net loss (excluding non-cash costs) of £153.78 a head in 2005/06 based on an average herd size of 74 animals.
  • Significantly lower fixed costs, lower variable costs and mortality shaped output for the top third. Variable and stock costs were almost £74 a head lower than the average due to the purchase of lighter cattle at a lower price, and there was less reliance on concentrates. A downside was relatively low daily liveweight gains and a longer finishing period.

Extensive cattle finishing Costs



  • Fixed costs were also lower for the top third by approximately £61 a head, mainly due to lower overheads. Their paid labour cost was half that of the bottom third units. Even when the value of family labour was considered, their total labour cost was 12% lower than average and a massive 40% lower than on the bottom third units despite similar numbers of finishing cattle in the enterprise.
  • Once all non-cash costs are considered, on average the loss in extensive finishing systems stood at £262 a head in 2005/06. Lifting of the export ban has improved finished prices and store cattle values, as well as input costs, particularly feed.

\Extensive cattle finishing Labour



  • Technical performance should be raised to achieve target liveweight gains of at least 0.9kg a day and exploit the latent genetic potential of the cattle they are finishing.









































































































































































































    FINANCIAL PERFORMANCE 2005/06 [£/HEAD]

     

    Bottom third Average Top third
    Number of herds in sample 20 60 20
    Average herd size (head) 66 74 68
           
    OUTPUT (£/HEAD)      
    Stock sales after valuation changes 931.91 776.35 782.36
           
    VARIABLE AND STOCK COSTS      
    Stock purchases 659.87 518.49 495.06
           
    Variable costs      
    Total concentrates 124.46 89.85 55.38
    Other feeds 9.24 8.44 2.78
    Forage 37.27 31.28 33.71
    Total feed and forage 170.97 129.58 91.86
    Veterinary 10.84 8.84 3.53
    Bedding 26.87 21.27 17.48
    Other costs 39.28 24.72 21.27
    Total variable and replacement costs 24.08 73.46 153.16
    Gross margin 24.08 73.46 153.16
           
    FIXED COSTS      
           
    Paid labour 86.61 56.12 44.08
    Power and machinery repairs 81.93 54.81 38.53
    Administration 46.96 27.12 19.23
    Property charges 44.09 28.65 19.53
    Land resource costs (eg land rent) 39.30 23.55 11.06
    Machinery depreciation and fixtures 51.70 36.99 34.14
    Total fixed costs excluding non-cash costs 352.58 227.24 166.56
    Net margin excluding non-cash costs -328.49 -153.78 -13.40
           
    NON-CASH COSTS      
    Value of unpaid family labour 99.02 73.45 73.14
    Rental value of owned land 27.84 20.45 18.52
    Interest on working capital 18.59 15.25 14.93
    Total non-cash costs 145.44 109.15 106.59
    Total costs 1,405.84 1,039.29 902.36
    Net margin including non-cash costs -473.94 -262.94 -119.99




































































































PHYSICAL PERFORMANCE 2005/06
  Bottom third Average Top Third
Feeding perid [days] 429 373 450
Average carcass weight [kg] 316.2 320.2 339.8
Weight at start [kg Iwt] 171.9 183.6 158.1
Weight at finish [kgIwt] 558.7 567.7 590.4
Daily liveweight gain [kg] 0.81 0.75 0.70
Mortality [%] 3.36 2.37 1.03
       
PRICES      
Return per finished animal [£head] 552.01 559.23 636.31
Sale price [£/kg dwt] 1.75 1.76 1.95
Purcase price [£kg lwt] 1.70 1.48 1.23
Concentrate price [£/t} 92.06 94.88 110.73
       
FEED      
Concentrates usage [kg/head] 1,347 956 504
Concentrates per kg weight gain [kg] 3.62 3.11 1.77
N fetiliser use [kg/ha] 49.1 61.2 45.5
Note: Figures may not add to totals due to rounding
Source: Promar International


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