Investigation reveals £110 beef margin

3 November 2000




Investigation reveals £110 beef margin

By Robert Davies

AN investigation into the economics of finishing dairy bulls specifically for processing into mince and burgers shows a provisional margin of £110 a head, after support premiums, from the first animals sold.

When the Calf Processing Aid Scheme ended, the Welsh Institute of Rural Studies, Aberystwyth, decided to take up a contract to intensively rear 65 bull calves. The agreed on-the-hook price was 142p/kg.

Calves were reared on a mix of whole milk and powder, with a start to weaning concentrate pellet introduced from the fifth day. Clean, bright barley straw was also made available. The same pellets were fed after milk feeding stopped at six weeks, but from 12 weeks the bulls were fed compounded beef concentrate nuts.

Both types of concentrate came from the Wynnstay and Clwyd Farmers Mill at Llansantffraid, Powys, which was already involved in talks with a meat company about recruiting farmer customers to take up contracts to supply beef bulls for processing.

"We have teamed up with Wynnstay to get an independent appraisal of the potential for finishing surplus dairy bull calves rather than killing them on farms," says WIRSs farms director Selwyn Williams.

"There is no doubt that the supermarkets and fast food outlets want to be able to offer customers products processed from home-reared beef, but they must have guaranteed continuity of supply.

"Processors are not concerned about conformation, O minus and P grades are fine, so if growth rate and feed conversion are reasonable, Holstein bulls can be used."

To ensure calves remained healthy and grew well, buildings also had to be well-ventilated.

Safety was also an important issue, says Dr Williams, whether dairy farmers themselves or others reared the bulls. It was essential that the pen layout allowed the bulls to be fed and bedded without risk to stockmen.

Growth rates had to be monitored regularly to ensure any problems could be corrected quickly, so good handling facilities were required, and two people had to be present when bulls were handled.

Early results from the Institutes Tan-y-Graig Farm indicated that bulls consume an average of 1.8t of beef finishing nuts to reach the 500kg target slaughter weight, and eat or soil 0.5t of barley straw.

Growth rates have been better than expected, with one August born bull reaching 500kg at just over 10 months old – a daily gain from birth of 1.4kg. Many of the first 14 animals sold grew at a similar rate.

Provisional costings indicated that if a bull realised £350 after deductions and all support premiums were claimed, the margin would be £110/head, plus an extensification premium where stocking rate was below 2 livestock units/ha.

"The margin is narrow and comes from bull and slaughter subsidy payments," says Dr Williams. "Perhaps this will change if the availability of good quality home-killed beef for processing improves and a stronger k makes cow beef from France less attractive. In New Zealand the best manufacturing beef for export to the USA is worth more than prime beef."

Financial results from finishing the 65 bulls will be published in the new year when all have been slaughtered. &#42

The first WIRS bull

calves ate 1.8t of

concentrate to achieve

their target weight of 500kg.

CALF REQUIREMENTS

&#8226 Milk for six weeks.

&#8226 1.8t of concentrate.

&#8226 0.5t of straw.


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