A further 11 heifers and 11 bullocks were slaughtered from the Irish Farmers Journal Thrive dairy calf-to-beef demonstration farm in Cashel, Co Tipperary, on Friday 3 September, as was featured on the recent Thrive webinar, which is available to watch back on www.ifj.ie/thrive.
The bullocks received a base price of €4.15/kg, while the heifers were 5c/kg better at €4.20/kg. In terms of carcase weight, the bullocks weighed an average of 305kg, while the heifers were just shy of 270kg on average.
This resulted in an average carcase value of €1,293 for the bullocks and €1,159 for the heifers.
Similar to the first cattle slaughtered off the farm a fortnight earlier, carcase fat score continued to be an issue, with seven of the 22 cattle grading a 4+. As might be expected, six of these were heifers.
Once an animal grades a 4+ it results in a 6c/kg deduction on the grid price, as well as an 8c/kg reduction of the 20c/kg in-spec payment, bringing it down to 12c/kg. This means a total deduction of 14c/kg for fatscore 4+ animals.
In reality, however, when we look at the kill sheet, the average price per kilo deduction on the 4+ heifers was actually 8c/kg. This is due to the fact that they tended to grade better for conformation – five out of the six were O+ compared to just two of the other five heifers grading O+.
This means that the 4+ heifers were hit with a deduction of €21.50 on the average carcase weight.
As was debated on last week’s webinar, if beef farmers are to have a viable enterprise from dairy-beef cattle, there needs to be a change in the genetic ability of these animals, so that they are not going out of specification at low carcase weights, or else the way in which farmers are paid for these animals will have to be altered.
In saying this, these animals did manage to leave a positive margin. On average, the gross margin between heifers and bullocks in this system from the cattle slaughtered so far this year sits between €415/head and €420/head.
Fixed costs, including land rental and labour, need to be factored in to the equation and depending on the farm, these could range anywhere from €250/head to €300/head.
This leaves us with a net margin of anywhere from €115/head to €170/head.
For this to be achieved, every aspect of the system needs to be carefully managed (Figure 1) – from not being prepared to pay over the odds for calves, to the use of known genetics of calves born in early spring, to attention to detail in terms of animal health and top-notch grassland management.
This farm grew over 13t DM/ha of grass last year – almost double the estimated grass growth on the average drystock farm in Ireland. Even with all this in place, a decent beef price plays a huge role in the overall economic sustainability of the system.
All of these factors are the building blocks that lead to a profitable enterprise. Remove any one block and the system fails to leave a margin.