Playing claim game is a good route to profit
Flexibility on breed choice,
adopting a two-year beef
system and reliance on
forage are helping to
maximise subsidy claims
and maintain margins on
one Wilts unit.
Emma Penny reports
DEVELOPING a system which ensures maximum return from subsidies is helping to shore up profits for one Wilts beef producer.
Brian Smith, who owns 14ha (34 acres) at Marston Farm, Broad Town, Swindon, is tenant on a further 18ha (45 acres) and also takes seasonal grass lets, which form an important part of the system.
Cattle on the unit are bought-in as calves at about 10 days old in September and are sold at two years after two BSP claims. This means that cattle spend their first winter on a forage-based diet, are on a forage store ration in their second winter and finished off grass from August onwards.
Mr Smith is flexible about which breeds of cattle he buys, aiming for value for money. Continentals are often too expensive, so Friesians and Herefords are purchased, while the collapse in the calf export market meant Belgian Blue calves were available at a lower cost than usual.
About 60-70 of the first BSP claims come from the calves. The headage limit is reached with claims for barley bulls which are housed in summer and finished before the other cattle come in.
The second BSP claim is made at 21 months, and Mr Smith reckons he claims on about 50 cattle.
"We used to run an 18-month beef system, but moved to two-year finishing in 1993 when subsidies became a much greater part of beef margins."
Despite ensuring optimum subsidy claims, the system does have its difficulties, he says.
"We are dependent on seasonal grass lets; if they are too expensive we would be prepared to sell cattle on green CIDs. We havent had to do this yet, but theres no point in spending too much on grass lets as that will nullify the effect of the second BSP claim."
But the cost of grass lets is offset in two ways – claiming extensification premiums and taking a cut of hay for sale as a cash crop.
"The seasonal lets mean we can claim the higher extensification payment – £44.42 for each claim for a limit of one livestock unit/hectare.
"We have worked out the pros and cons of claiming the lower extensification payment, but its certainly financially worthwhile to take on more grass and meet the lower stocking density limit."
However, the hay cash crop is vital for profitability, he says. "Taking grass lets just for grazing wouldnt be financially viable although making the hay increases the workload considerably."
The hay is sold to local horse owners, but is of course subject to price fluctuations. "At the moment hay is selling at about £1.75 a bale – with 80-90 bales an acre this produces about £150/acre without allowing for costs. This certainly helps make lets more profitable, and means I can have autumn grazing for very little."
Summer drought means that grass availability becomes more limited throughout the summer – the period when Mr Smith moves cattle to the let areas.
"We also spread muck in September, which reduces grass acreage by about 50 acres, making the additional grass even more vital."
• Flexible on breeds.
lTwo BSP claims.
• Make hay to justify grass lets.
Managing the farms subsidy claims efficiently is maximises profits at Brian Smiths farm.