Calf to beef system: The costs

With the current move away from aged bulls, farmers running dairy calf to beef systems, particularly with bulls, have come under increased pressure.

Farmers producing Friesian bulls for slaughter over 16 months now have very limited outlets. For that reason, it is clear that there are now only two main systems for the majority of farmers finishing dairy bulls – to bring them to beef under 16 months, or finish them to beef as steers.

Live trade

Farmers who are considering buying Friesian bull calves and are not committed to bringing them to slaughter should be wary of live demand. The past 12 months have driven home the fact that in any time of a plentiful supply of continental cattle or in a time of weak demand, the cattle whose price is worst affected are Friesian bulls and steers.

At some stages last year, particularly in the midst of the fodder crisis, Friesian bulls and steers were a very weak trade and sold from as little as €1.00/kg to €1.40/kg. More forward or fleshed types were a better trade, but poor quality Friesians were hard sold. When buying calves, farmers should be aware that they may have to bring them right through to slaughter.

Bulls under 16 months

As many farmers have found, the 16-month Friesian bull beef system is a specialised one and requires extremely good management at all phases to ensure that the target weight gains are achieved. At the first housing, all bulls should be weighed. By November, a February-born bull should weigh approximately 260-270kg. Bulls falling below 260kg will struggle to get into large carcase weights before 16 months and in some cases should be directed towards a steer system.

The first point should be to source the right calves. Farms that source better quality calves tend to get more to hit spec and often these return a higher margin. Table 1 is a detailed budget of the costs associated with finishing a Friesian bull calf under 16 months of age. It is essential that farmers realise that just because a calf costs €70 or €100, this is not a cheap way of getting into numbers. In fact, farmers who think that often find themselves in cashflow difficulties a few months down the line.

Even though the calf may cost just €100-130/head, it will take another €100/head just to wean it. By housing, the calves would cost approximately €275/head. However, this is where the costs skyrocket. In some cases concenProducing bull beef from spring-born Friesian bulls under 16 months is an intensive system that often uses 1.7t to 2t of concentrates per head.

The budget in Table 1 assumes good grassland management and has a concentrate input of 1.7t. In some cases, concentrate input run up to 2t/head. In total, concentrates account for up to 60% of the feed budget of young bulls, 21% is silage and just 19% of the overall feed budget is grazed grass. The eight-month store and finishing phase accounts for a further €550/head in variable costs. This brings the total variable costs in finishing the animal to €825/head.

Allowing a farmer €100 to cover fixed costs and labour, the breakeven beef price for a farmer producing a 280kg carcase is €3.30/kg. For each 10kg move in carcase weight, the breakeven price will change by 13c/kg. Likewise, a €20 change in calf price will result in an 8c/kg change in beef price. A change of €20/tonne in beef price will change the beef price required by 12c/kg, while each 100kg change in meal usage will increase or decrease the breakeven by approximately 12c/kg.

Steer option

As with the 16-month system, farmers should be focused on sourcing good quality, healthy calves at the start in order to ensure that good carcase grades are received. Table 2 lists the costs in a steer-to-beef system.

Farmers should be aware that choosing a steer system is not necessarily a low-cost system. The meal input in the steer system works out at approximately 1.25t, substantially less than the 1.7-1.8t required in the 16 month bull system.

The increased costs are accumulated through the second season at grass and housing for the second winter. The total costs incurred to bring a Friesian calf to beef at 24 months will be approximately €915/head. This is almost €90/head more than finishing a bull in the 16-month system. However, the additional carcase weight will have the ability to water down cost to produce each kilo of carcase.

Again there is €100/head extra factored in to cover fixed costs and labour. In a well-run system, a carcase weight of 330kg is achievable by 24 months of age. The example in Table 2 is based on a 310kg carcase. Carcase grades will undoubtedly be less in the steer system than in the 16-month bull system.

Other options

Farmers who are looking to source calves and rear them to beef or sell live should weigh up the alternatives. Last year, the average Friesian bull calf sold for approximately €120/head while the average Angus bull made €200/head. This differential was wider in previous years.

Farmers looking at buying Friesian bulls should look at the alternatives of traditional breed calves and continental calves. If differential is small enough, or if traditional breed and continental calves are good value, they may be an alternative.

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