By James Garner
BLACK-AND-WHITE dairy bull prices, for the few marketed, tumbled to about £5 for lowest-quality calves on Monday this week.
But dairy producers must question whether finishing them on-farm will be profitable.
MLCs recently launched booklet Life After CPAS asks dairy producers to consider a checklist before embarking on bull or steer beef production.
These factors include available resources, such as building space, cheap feed and adequate cashflow.
Establish a market before beginning the enterprise as dairy bull beef markets in this country are limited, advises the booklet.
Steer markets may be very difficult to produce for as they follow supermarket specifications for carcass conformation, weight and grades.
Extensively finished black-and-white bulls may be difficult to produce within retailers grades, warns Signets Geoff Fish. “And there are heavy discounts for not meeting quality requirements.”
Producers should also consider whether their forage area will allow Beef Special Premium (BSP) claims, says Mr Fish.
“It is essential to claim subsidy to make it worthwhile. If you cant claim subsidy, dont rear them.”
But SACs Basil Lowman thinks many bull finishers will struggle to make money.
“BSP payments will be the same as last year, and there will be an extra £17-20 slaughter premium, but I doubt that feed costs will be any lower.
“Also this beef will be competing with cheap imports, such as Australian processing beef at 45p/kg carcass weight.”
There will be many dairy calves born in the next three months. These will be marketed at the same time as a lot of grass finished cattle in a year or so, which could affect prices, warns Dr Lowman.
Mr Fish explains that two separate scenarios were considered in the MLC booklet. In the first when a producer receives 132p/kg deadweight for the finished animal, it leaves a £10/month margin, which is enough to cover fixed costs.
“However, it is dependent on subsidy claims. In this case the producer used existing facilities and had few extra costs.”
The second scenario looked at a dairy producer who needed extra housing space to look after calves. This incurs extra costs, such as a higher vet and med bill, says Mr Fish.
“On this system he needs a finished price of 220p/kg deadweight to produce a £10/month margin over costs and there is no subsidy claim because he has used up all livestock units.”
In both scenarios calves were reared on substitute milk and it cost £60 to rear them to 12 weeks old.
Then they are fed on a low cost conventional barley beef system, without spending any capital.
Bulls meet the market criteria better than steers because they can be grown fast – up to 1.5kg/day – and kept lean, says Mr Fish.
This is what the processing market requires as most of the beast will be used for minced beef, he adds.
Trying to feed these animals too cheaply, could be a false economy. “They will not grow as fast as required, and wont meet the market which wants lean animals under 14 months old. And the faster a bull grows, the more efficient it is.
“Black-and-white calves need pushing along rapidly with plenty of energy in the feed.” There is some flexibility to cheapen feeds by using by-products. But Mr Fish warns against offering too much forage.
Roots should not contribute more than 30-40% of diet dry matter because there will be too much water excreted and it limits the amount of concentrate an animal can eat, he explains.
Extra care may also be needed if substituting maize silage for cereals. “I wouldnt feed any more than 30% of the diet DM as maize silage because it would make the ration low in energy. Also remember to include the costs of growing maize in your costings,” he adds.