Beef finishers will require a beef price in the region of 430p/kg next spring to break even, based on current store prices and the rise in input costs.
Our calculations are based on a farmer buying 550kg steers on 20 October.
At an average purchase price of 230p/kg, steers will cost £1,265.
Storing the animals from arrival on farm to 31 January is a 103-day period, during which steers are offered 30kg/day of silage (£20/t) and 2kg/day of concentrate (£270/t).
Feed costs in the store period amount to £115.
A £20 per head cost is factored in to cover all veterinary treatments such as fluke, worms and lice, along with some miscellaneous costs such as haulage or replacement tags.
From 1 February to 30 April, steers are moved on to a finishing diet, during which they consume an average 20kg/day of silage and 5kg/day of concentrate. Feed costs during this period total £155.
Fixed costs at £1/day per animal are included in to cover all machinery running costs, electric and shed repairs.
All combined, total finishing costs on 1 May come to £1,747.
Weight gain is assumed at 0.5kg/day during the store phase and 1.1kg/day in the finishing period. This brings the steers to a final liveweight of 710kg, which at 57% kill-out yields a carcase of 405kg. This gives a breakeven cost of 431p/kg.
Adding in a profit margin of only £50/head increases this to 443p/kg.
While there will be opportunities to reduce some of these costs with high quality silage and buying cheaper animals with slightly lower conformation, the savings will be marginal, and record beef prices will still be required next spring if any margin is to be made.