Beef finishers need a further 6p/kg to be added to beef price simply to cover recent increases in the price of concentrate, Irish Farmers Journal analysis shows.
Cattle rations are currently priced around £270/t to £285/t, a rise of £20 from early autumn and £60 to £70/t above feed costs in December of last year.
In addition, further price increases are expected in January given the surge in global grain markets over recent weeks.
Taking an example of steers purchased on 1 October, stored for 100 days on 3kg of a growing ration and silage, then intensively finished over 90 days on an average 7kg/day of concentrate, animals will consume a total of 930kg.
Assuming that the ration during the store period costs £285/t, while that fed during the finishing period is priced at £280/t, total purchased feed costs come to £264/head.
Taking steers weighing 560kg and purchased for 230p/kg, it is an initial cost of £1,288
When compared to October prices of around £260/t, the extra concentrate costs come to £22 per head, which on a 400kg carcase is the equivalent of 6p/kg.
The higher meal prices also add to breakeven costs for finishers.
Taking steers weighing 560kg and purchased for 230p/kg, it is an initial cost of £1,288. As well as the £264 of concentrate costs, the cattle eat an average of 25kg/day of silage (£20/t) over the 190 day period, which is a total cost of £95. Adding in veterinary treatments at £25/head and £20/head for miscellaneous expenses, breakeven finishing costs come to £1,692 or 423p/kg on a 400kg carcase. No fixed costs are included in the example.
Factoring in a £50/head profit margin to help cover some of the fixed costs and family living expenses, adds 13p/kg to the breakeven price taking it to 436p/kg.