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Farmers purchasing store cattle this autumn to finish animals next spring require a beef price of around 529p/kg to cover production costs and generate a modest £100 per head margin.
Our analysis is based on current store cattle prices for good quality bullocks capable of high liveweight gains and includes typical input costs incurred with a winter finishing operation.
Excluded from our calculations is the £75 payment under the Beef Carbon Reduction Scheme, as this payment is funded by a deduction from all direct farm payments, rather than the marketplace. There are also conditions attached to the scheme, such as a requirement for animals to be finished at a maximum age of 28 months in 2025, down from a 30-month age limit in 2024.
Example
To put winter finishing costs into context, our example is based on an efficient finishing unit where a farmer purchases continental store bullocks in October.
Cattle are purchased at an average liveweight of 520kg and at a conservative price of 290p/kg or £1,508/head.
Bullocks are housed by 15 October and stored for 120 days during which they are fed 30kg/day of silage (£25/t) and 2kg/day of concentrate, costing £271/t.
A charge of £10/head is included to cover worm, fluke and repeat lice control, plus £5 for miscellaneous expenses and £60 to cover fixed costs such as machinery and housing maintenance.
Weight gain averages 0.5kg/day, bringing cattle to 580kg liveweight by the end of the store period, with inputs used in this phase coming to £230/head.
Finishing phase
Cattle are intensively finished over 100 days from mid-February to late May and during this period, bullocks consume, on average, 20kg of high-quality silage/day and 6kg/day of concentrate, costing £260/t.
Assuming cattle average 1.1kg/day during the finishing period, bullocks reach finishing weights of 700kg.
At 57% kill-out, that yields a 399kg carcase and a break-even beef price of 529p/kg for the example farm. It should be noted that the example assumes best practice at all times, no health issues, adequate housing space and high-quality forage available throughout the entire housing period.
Lowering the purchase price of cattle by 10p/kg reduces the break-even price by 13p/kg, while a £10 change to meal costs in the finishing phase alters the break-even beef price by just 2p/kg.
The economics will change from farm to farm, but ultimately, the example is a reminder to consider the costs associated with winter finishing before committing to purchasing cattle this autumn.
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