- Data from 49 lowland suckler herds showed an average net margin (excluding non-cash costs) of -£164.37 a cow in 2005/06, the first year since the removal of direct headage subsidies. (Based on an average herd size of 67 cows).
- Comparing the top third net margin with the bottom third shows a difference of £304 a cow. This gap appears to be widening.
- Top third performance is down to optimising output and better total cost control. Variable and replacement costs were similar for the average and top third group, but about £30 a cow lower than the bottom third.
- Fixed costs of the top third group were £112 or 38% a cow lower than average. Lower overheads and paid labour contributed to almost one-third of the difference. Even when the value of unpaid family labour is considered, total labour cost on top third units was still significantly lower than average.
- For bottom third units calves were 20kg lighter at sale compared to the average despite higher feed and forage costs.
- Fixed costs for the bottom thirdwere £128 a cow higher than average and £240 a cow higher than the top third. The main differences were on power and machinery repairs and machinery depreciation and fixtures. While paid labour was £11 a cow higher than average, the value of their own labour was significantly higher than average and more than double that of top third producers.
- In 2006/07, while feed and energy costs are expected to be higher, output should benefit from higher suckled calf values and cull cow values.
FINANCIAL PERFORMANCE 2005/06 [£/COW]
|Bottom third||Average||Top third|
|Number of herds in sample||17||49||17|
|Average herd size (head)||56||67||69|
|Calf output after valuation changes||262.37||279.23||294.30|
|VARIABLE AND REPLACEMENT COSTS|
|Total feed and forage||77.13||62.59||61.52|
|Total variable and replacement costs||177.87||147.27||145.48|
|Power and machinery repairs||94.94||83.77||46.15|
|Land resource costs (eg land rent)||32.85||33.16||24.46|
|Machinery depreciation and fixtures||87.32||52.21||32.54|
|Total fixed costs excluding non-cash costs||424.42||296.33||184.08|
|Net margin excluding non-cash costs||-339.92||-164.37||-35.25|
|Value of unpaid family labour||157.01||109.96||65.49|
|Rental value of owned land||44.22||36.14||32.68|
|Interest on working capital||45.06||41.09||38.24|
|Total non-cash costs||246.28||187.19||136.41|
|Net margin including non-cash costs||-586.20||-351.56||-171.66|
PHYSICAL PERFORMANCE 2005/06
|Bottom third||Average||Top Third|
|Barren cows per 100||8.9||8.0||9.7|
|Calves born alive per 100||90.0||90.4||90.4|
|Calves died per 100||3.2||3.5||2.6|
|Calves reared per 100||87.3||87.1||87.9|
|Calving period [weeks]||17||20||22|
|Return per calf[£/head]||286.98||313.56||328.50|
|Calf price [£kg lw]||1.08||1.10||1.08|
|Weight per weaned calf [kg]||264||284||301|
|Daily liveweight gain [kg]||1.10||1.06||1.04|
|Purchased concentrates [kg]||86.8||90.4||143.2|
|Home grown concentrates [kg]||96.9||60.8||53.5|
|Total concentrates [kg]||183.7||151.2||196.6|
|N Fertiliser use [kg/ha]||113.3||64.0||62.2|
|Stocking rate [livestock units/ha]||1.1||1.1||1.1|
|Note: Figures may not add to totals due to rounding|
|Source: Promar International|