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Finished cattle prices are at record levels and forecasts from marketing bodies in the UK and Republic of Ireland indicate tight supplies will underpin the beef trade into summer 2025.
That optimism on price outlook is generating plenty of debate on the merits of finishing animals out of the shed before June.
For farmers that finish animals every year, or those currently under movement restrictions, taking animals through to slaughter is the only option.
But planning and feeding management should now be changing to get animals to a suitable slaughter condition in good time.
The dilemma on whether to finish animals or not, mostly affects those farmers that normally sell forward stores every spring.
Making the right decision should not be down to the fact that beef price is running 60p to 70p/kg higher year on year. Store prices in the mart are also up £300 to £500 per head.
Considerations
Other factors have to be taken into consideration before committing to finishing cattle instead of selling live.
First off, it will disrupt cash flow to your business. Holding cattle longer to finish means more inputs have to be purchased, such as meal.
If you have fixed financial commitments, such as bank loans on a recent land purchase or a new hire purchase agreement, can you afford to have income from cattle sales delayed?
Housing space and silage reserves also have to be considered at the outset, as does the farmer’s ability to feed animals to reach an adequate fat cover and carcase weight.
In some cases, these factors will mean some farmers are better off sticking to what they know best and offload stores live this spring. For others, finishing will add value to cattle.
Budget
Finding the right answer will come down to a farm by farm scenario. What is right for your neighbour may not be right for you. The best advice is to do a budget on what cattle are worth now compared to the potential value generated by taking animals through to finish.
When it comes to doing a budget, use a realistic beef price, input costs, weight gain and carcase weight. Don’t base your budget on one or two top performing animals, but rather a herd average.
Using inflated prices or weights will only cheat yourself and lead you to make the wrong decision on your cattle.
Starting point
The starting point is to weigh cattle now and put a market value on them. To get a handle on prices, go to your local mart or check out sales online for animals of similar type, age and weight.
The next step is work out when cattle are likely to finish. For animals with high genetic merit, a weight gain of 1kg to 1.2kg/day is realistic for 80 to 120 days of intensive feeding.
Therefore, if the aim is to kill cattle around 1 June, assuming good quality bullocks weighing 580kg on 1 February, that is a 120 day finishing period.
At an average daily liveweight gain of 1.1kg over that period, cattle will have a final liveweight in the region of 710kg which at a kill-out of 57% yields a carcase around 400kg.
Weight limits
However, if the bullocks weigh 550kg on 1 February, then slaughter date will be closer to the end of June.
Depending on the circumstances of the individual farm, these animals may be better off sold live in the coming weeks.
Ultimately, for high genetic merit animals, they should be 80kg to 120kg below the target slaughter weight going into February, if you plan on finishing cattle out of the shed by early summer. Cattle that require a longer finishing period will need to go back to grass, if selling live is not an option.
With plainer cattle, weight gain will be lower. Therefore, on 1 February cattle should be less than 100kg from reaching their final slaughter weight if the aim is to finish by early June.
Break-even
When you have an idea of how long cattle will take to finish, it is relatively straightforward to work out how much meal and silage will be required to feed animals.
Factor in any miscellaneous costs such as minerals, straw, lice treatment and haulage to a slaughter plant. Mart fees are likely to be similar to kill charges, so one usually cancels the other out.
Tally up the projected input costs and add that to the value of the animal if sold live on 1 February. Add in a margin for your time and a return on your investment. Divide this figure by the target carcase weight to get a handle on breakeven beef price for cattle.
If this price is lower or similar to current beef price, there is merit in holding cattle to finish rather than selling live.
There is also the potential to draw down the £75 payment on cattle under the Beef Carbon Reduction Scheme, provided animals are slaughtered below 28 months of age in 2025.
Completing a finishing budget for store cattle
To give an example of drawing up a finishing budget, take a farmer with 20 high genetic merit store bullocks weighing 600kg on 1 February.
Normally, cattle are sold live every year on, or as close to this date as possible, due to housing space limitations.
Bullocks exhibit continental type genetics that are highly suited to the live ring and possess potential for U grade conformation.
In the current market, these animals are valued at a conservative 350p/kg, giving a potential sale value of £2,100 if sold live as normal.
Finishing costs
However, the example farmer has managed to re-jig housing to provide extra space to take the bullocks through to slaughter.
Cattle are fed for 120 days, starting off on 6kg/head on a daily basis through February with a 50% maize finishing ration costing £265/t.
Feed is built up to 7kg/day in March, then 8kg in April and May to encourage fat cover. That brings total concentrate feeding to 875kg or £231/head.
Silage quality is average and when fed at a rate of 25kg/day, bullocks consume 3t/head by June. At a cost of £25/t, that brings combined feed costs to £306/head.
Adding in £20/head to cover miscellaneous costs, plus £100 for time and profit margin, along with the starting value of the bullocks, breakeven finishing costs come to £2,526.
Breakeven
Assuming cattle average a daily liveweight gain of 1.1kg/day over the finishing period, final liveweight is 732kg.
At a kill-out of 58%, bullocks yield an average carcase weight of 424kg. Dividing carcase weight into finishing costs gives a break-even beef price around 595p/kg. As there is no guarantee meal price will stay at £265 between February and June, for every £10/t change in ration costs, the breakeven beef price is altered by 2p/kg.
For every 10p/kg change in sale price via the live ring, the breakeven beef price alters by 14p/kg. Reducing the farmer’s margin from £100 to £50 reduces breakeven beef price by 12p/kg and vice versa if the farmer puts a greater value on their time.
Ultimately, the example shows the value in doing up a simple budget before committing to finishing cattle.
Mart prices are exceptionally strong at present and consistently returning 340p to 360p/kg on good quality stores.
Based on the outlined input costs and potential sale value of cattle in February, the example farmer is arguably better off cashing in cattle, rather than gamble on beef price rising to 600p/kg territory.
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