Farmer Writes: the maths of beef finishing

The first rule of a beef finishing enterprise is to do the maths. The second rule is to analyse those figures.

After that, it seems simple. Buy your cattle, let them out in the field, and the sun and grass will do the rest.

However, it isn’t always that easy. If it was, I wouldn’t be writing this as part of an alternative enterprise to subsidise my farm income. I jest.

“All you beef farmers are loaded,” a lady in my estate told me recently.

There are multiple variables.

Doing the sums

Last week, I analysed the slaughter reports from two six-month periods, 15 February 2016 and 2017, as well as 15 October 2016 and 2017.

In 2016/2017, the exact same number of heifers were slaughtered in each period, which was a total coincidence.

There was only 5c/kg difference in the average price of €3.99/kg versus €4.04/kg.

There was a 20kg/head difference in the carcase weights of 307kg versus 287kg.

The ages at slaughter were similar, with most of our heifers being killed between 16 months and 24 months.

In 2016, 34% of the group graded R+ or better, versus 10% of the group in 2017.

The fat scores were higher in 2017.

These figures could leave you more confused, but they need to be dissected.

Most people would think that there should be a bigger difference in the sale price, but when you analyse the grades, you will see why the prices were so close.

As one Roscommon man said to me last week: ‘Ye lads should be up for robbery’

In 2016, we had 34% grade R+ or better, which means we potentially got an extra 24c/kg over the base price – which in a year cancelled out a lot of the 10c/kg difference in base prices over the two years.

This year, we only had 10% grading R+ or better, which means we were getting closer to the base price.

The better grades in 2016 left us with heavier carcases, which also helped to negate the lesser selling price of 20kg an animal – which comes to €79/head.

The poorer grading so far this year has left us with a few overfat heifers at lighter weights, which means we lost a few c/kg on selling price.

You cannot alter a plain beast.

I often heard it said that in a bad year you can feed a good beast out of trouble. Concentrate usage on this farm is minimal, with about 75% of our cattle being sold off-grass.

Does the blame lie with the type of heifer we bought this year? Perhaps a little.

Heifers were a shade dearer in spring 2017 versus spring 2016, and I probably bought more division one heifers than premiership standard.

We work to a price/kg when buying in the marts.

However, I’m not entirely convinced it was the heifers’ fault this year.

Sheep

On the sheep side of the business, our lambs killed out less than in 2016, probably 1kg less.

From talking to other farmers and people in the meat industry, I believe this was an industry-wide problem in 2017 and maybe that is reflected in the reason of the higher factory prices this year.

Cattle kill numbers are up, but beef in the chill may be down.

Back to the mart

We try and buy a heifer to suit our system, our aim is to let them do the work at grass.

Although an email has just come through from the factory for a batch killed this morning, 90% of the batch graded R- or better and none fatter than 3+. They averaged 295kg dead.

Armed with all this data we began buying at the weanling sales in Roscommon and Elphin last week.

The buying-in price is a bit back on 2016, but exact figures are hard to find.

As one Roscommon man said to me last week: “Ye lads should be up for robbery.”

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