There is no beef production system profitable in Ireland at the current base price of €3.50/kg. This was the stark reality outlined to farmers by Teagasc head of drystock Pearse Kelly at a beef meeting in Kilkenny on Tuesday night.

At the meeting, which was jointly organised by Teagasc and Kilkenny IFA, Kelly showed that at a current base price of €3.50/kg and assuming farmers received an 18c/kg payment from QPS (6c/kg conformation bonus and 12c/kg in-spec payment), a suckler-to-beef farmer stands to make a net loss of €151 per cow.

The analysis was based on Teagasc eProfit Monitor data with suckling-to-weanling/store data for 2018 used to calculate the cost of carrying a cow for a year. This was presented as a cost of €746 taking a good level of reproductive performance and achieving 0.95 calves per cow in the herd.

Teagasc beef budgets for 2018/2019 were used to calculate the cost of taking progeny through to finish as a steer at 24 months of age or heifer at 20 months of age. The costs were presented as €826 to finish a steer with an average carcase weight of 377kg and €464 to finish a heifer at an average carcase weight of 296kg.

Breakeven beef price

For the steer system to break even, a beef price of €4.17/kg is required, while for the heifer system a beef price of €4.09/kg is required. The required beef price for a system producing 50% of steers and 50% heifers increases to €4.43/kg to deliver a €100 margin and €4.72/kg to deliver a €200 per head margin. The finishing budgets are based on achieving good levels of technical efficiency.

Kelly said the loss-making situation in suckler-to-beef systems is not a new phenomenon but he pointed out that losses will be particularly bad at current beef prices and cautioned farmers to sit down and calculate their own figures.

Dairy-bred calves worthless

The outlook is no better for dairy beef systems. Kelly said that Teagasc had carried out a lot of work this spring on dairy beef systems which outlined major challenges for finishers. With the beef price falling by 30c/kg since then, the possibility of making dairy beef systems profitable at current beef prices is impossible.

The data presented was based on 24-month steer beef production systems with a Friesian steer delivering an average carcase of 316kg (O-3+), an Angus or Hereford steer delivering similar weight but a slightly better conformed carcase (O+3+) and a crossbred animal delivering an average carcase of 280kg and lower grade of P+3+.

The respective costs in the system were outlined as totalling €977, €929 and €921. Based on a final sale value of €3.50/kg and targeting a net profit of €200 per head, a Friesian bull calf is highlighted as losing €128 to bring to finish, an Angus or Hereford calf is worth just €2 to buy to have any chance of delivering this margin at current beef prices while a Jersey-cross steer would need a supplement of €214 from the producing dairy farm when purchased as a calf.

See more analysis in this Thursday’s edition.