Bull beef now financially viable
WITH cereal prices around £40 per tonne cheaper than 12 months ago, the time is right to maximise profits with bull beef.
That is the message from Mole Valley Farmers’ beef and sheep specialist, Lachlan Maclachlan.
He says a simple calculation based on today’s cereal costs shows an intensive animal eating two tonnes of feed through its growth to finish cycle will cost £80 less than it did a year ago, making bull beef financially viable.
“The most profitable option is following an intensive system with black and white bull calves, which are between £150 and £200 cheaper to buy than continental cross calves,” says Mr Maclachlan.
“This might not be the most obvious choice for a beef farmer, but the difference in initial purchase cost is impossible to make up with the price of the end carcase. The key is to do it well.”
He recommends an intensive system, ensuring calves are fed well, but cheaply, for quick growth: “Go for fast growth and choose appropriate feeds for your farm. Happily, more black and white bulls in the British beef supply chain also means less reliance on imported beef, which can only be positive for the industry.”
Dr Chris Bartram, head of nutrition at Mole Valley Farmers, says the significance of the latest forecast gross margin calculation for a black and white bull beef system and an 18-month system is evident (see tables).
“The recent improvement in beef price and reduction in feed price have changed the financial performance of different systems, and beef producers should review the various options now.
“Despite the higher purchased feed cost of the more intensive system, the gross margin per head is about 15 per cent higher than the semi-intensive system.”
He says exact figures will depend on the individual farm: “In the semi-intensive system, it is important forage costs are understood and included in the calculation, but this is not always the case.
“For some time now, Mole Valley Farmers has been suggesting it is the margin over a 12-month period which is important - not simply the margin for the system.
“It must be remembered, in some cases, the system can extend to two years. In the example illustrated, the gross margin per head per year is around 60 per cent higher for the intensive system than the semi-intensive system. Throughput will be maximised and profitability increased.”
One farmer capitalising on bull beef margins is Andrew Johns, Shaldon, Devon. Intensively farming 40 calves and 300 forward store cattle on his 14-hectare (36-acre) farm, he buys in all feed, but records and monitors all his costs.
“I am a first generation farmer and for this business to stand on its own two feet I need to know for the £2,000 we spend each week on feed, we are getting good value out,” says Mr Johns. His policy is to weigh and record daily all feeds and additives, what each group of cattle has been fed and liveweight gains. All daily costs are recorded and monitored on a weekly basis.
He only takes black and white bulls to 400kg liveweight.
“Feed conversion rates are terrible in animals over 450kg,” he says. “Our intensive system is straightforward and profitable because we stick to small animals which are responsive to good feed.”