There is a strong tradition among beef farmers of buying store cattle in spring to graze before selling in the autumn or intensively finishing next winter.
As buying demand increases, so usually does the price, and buyers can easily overpay for an animal which quickly erodes any potential profit margin.
Buying cattle is a gamble, as you have no idea what price you are likely to get for them at sale time. While it is not always feasible, it is advisable to complete a few simple budgets if you are planning to purchase store cattle for grazing this spring.
Convert to beef price
What most farmers tend to overlook when buying cattle is the price per kilogramme of liveweight, and the equivalent beef price.
To convert liveweight price to beef price, simply divide by a typical kill-out percentage. For example, a 420kg steer at £900 has cost £2.14/kg of liveweight.
At a typical kill-out of 57%, the equivalent beef price is approximately £3.75/kg.
While it is not always possible to buy cattle by keeping to a budget, knowing what your upper price limit is will give you more chance of making a margin.
Do not forget that you have other costs to add on top of purchase price such as concentrates, fertiliser and veterinary fees.
Depending on the trade at the time of purchase, there may be better value in buying plainer cattle that have frame and potential to gain weight.
Higher prices
The live trade for cattle is usually strong in spring. Prices tend to be highest in March and April, although this can be distorted by weather, and also by prevailing beef price at the time.
Tables 1 and 2 outline the average mart prices for steers and heifers weighing 400kg to 500kg liveweight and sold from March to May over the past three years. Prices are based on data from the Irish Farmers Journal MartWatch.
Mart prices were much lower in spring 2016 partly due to the late spring, but mostly down to beef price.
Finished prices for U-3 grade cattle last March were operating on a base of 310p/kg which fell to 306p/kg in April 2016, severely eroding farmer confidence.
In contrast, mart prices were exceptionally strong in March 2015 when beef prices were working from a base price of 354p/kg. By April and May, base prices had slipped to 330p/kg, which did see mart prices easing.
In March 2014, the mart trade for store cattle was relatively buoyant despite beef prices of 310p/kg. While steer prices eased through April and March, heifer prices improved, as did finished beef prices.
Calculate feed costs
Feeding costs will vary from farm to farm. But if you know the weight range of cattle you are looking to buy, you can easily calculate an approximate time frame when the animal will be ready for slaughter.
Using a daily liveweight gain of 1kg/day for cattle that are grazed on good-quality pasture, and housed straight on to an intensive finishing diet, you can work out how many days the animal will be on your farm.
For example, buying a 420kg animal with a target sale weight of 700kg, it will be on farm for approximately 280 days, or just over nine months.
Assuming the animal is grazed from 1 April to 1 October, there will be a grazing cost for 183 days.
If grazing received an average of five bags per acre of CAN across the season, costing £200/t, at a stocking rate of one animal to 0.75 acres, then grazing costs are approximately £37.50 per head. This works out at 20p/kg on 180kg of liveweight gained.
On a 100-day finishing diet, taking silage at £25/tonne, every 1kg of silage the animal consumes costs 2.5p/kg. If concentrates are £190/t, then 1kg of ration costs 19p/kg.
Assuming the animal eats on average 20kg/day of silage and 7kg/day of concentrate, the finishing costs are £183. Include £15/month to cover fixed costs, plus £20 for vet, £20 miscellaneous costs and a £100 profit margin.
If the animal was purchased for £900 and including all costs, the break-even price is £1,395. On a 390kg carcase, the beef price required is £3.57/kg.
Complete a budget before buying cattle and use realistic prices.Compare costs of buying heavier cattle to kill off grass against lighter cattle to kill next winter.Know what price you pay per kg of liveweight and the equivalent beef price.Look to buy cattle that are value for money.Buy from farms with good health status and herd genetics.Do not buy over-fat cattle as they will lose too much condition when they go to grass.Buy larger batches of cattle all at once, rather than buying small numbers every week that present a continual disease risk.Buy cattle of similar age, type and size to simplify management.Quarantine cattle on arrival to your farm.Vaccinate for IBR and dose cattle for parasites before joining your herd.
There is a strong tradition among beef farmers of buying store cattle in spring to graze before selling in the autumn or intensively finishing next winter.
As buying demand increases, so usually does the price, and buyers can easily overpay for an animal which quickly erodes any potential profit margin.
Buying cattle is a gamble, as you have no idea what price you are likely to get for them at sale time. While it is not always feasible, it is advisable to complete a few simple budgets if you are planning to purchase store cattle for grazing this spring.
Convert to beef price
What most farmers tend to overlook when buying cattle is the price per kilogramme of liveweight, and the equivalent beef price.
To convert liveweight price to beef price, simply divide by a typical kill-out percentage. For example, a 420kg steer at £900 has cost £2.14/kg of liveweight.
At a typical kill-out of 57%, the equivalent beef price is approximately £3.75/kg.
While it is not always possible to buy cattle by keeping to a budget, knowing what your upper price limit is will give you more chance of making a margin.
Do not forget that you have other costs to add on top of purchase price such as concentrates, fertiliser and veterinary fees.
Depending on the trade at the time of purchase, there may be better value in buying plainer cattle that have frame and potential to gain weight.
Higher prices
The live trade for cattle is usually strong in spring. Prices tend to be highest in March and April, although this can be distorted by weather, and also by prevailing beef price at the time.
Tables 1 and 2 outline the average mart prices for steers and heifers weighing 400kg to 500kg liveweight and sold from March to May over the past three years. Prices are based on data from the Irish Farmers Journal MartWatch.
Mart prices were much lower in spring 2016 partly due to the late spring, but mostly down to beef price.
Finished prices for U-3 grade cattle last March were operating on a base of 310p/kg which fell to 306p/kg in April 2016, severely eroding farmer confidence.
In contrast, mart prices were exceptionally strong in March 2015 when beef prices were working from a base price of 354p/kg. By April and May, base prices had slipped to 330p/kg, which did see mart prices easing.
In March 2014, the mart trade for store cattle was relatively buoyant despite beef prices of 310p/kg. While steer prices eased through April and March, heifer prices improved, as did finished beef prices.
Calculate feed costs
Feeding costs will vary from farm to farm. But if you know the weight range of cattle you are looking to buy, you can easily calculate an approximate time frame when the animal will be ready for slaughter.
Using a daily liveweight gain of 1kg/day for cattle that are grazed on good-quality pasture, and housed straight on to an intensive finishing diet, you can work out how many days the animal will be on your farm.
For example, buying a 420kg animal with a target sale weight of 700kg, it will be on farm for approximately 280 days, or just over nine months.
Assuming the animal is grazed from 1 April to 1 October, there will be a grazing cost for 183 days.
If grazing received an average of five bags per acre of CAN across the season, costing £200/t, at a stocking rate of one animal to 0.75 acres, then grazing costs are approximately £37.50 per head. This works out at 20p/kg on 180kg of liveweight gained.
On a 100-day finishing diet, taking silage at £25/tonne, every 1kg of silage the animal consumes costs 2.5p/kg. If concentrates are £190/t, then 1kg of ration costs 19p/kg.
Assuming the animal eats on average 20kg/day of silage and 7kg/day of concentrate, the finishing costs are £183. Include £15/month to cover fixed costs, plus £20 for vet, £20 miscellaneous costs and a £100 profit margin.
If the animal was purchased for £900 and including all costs, the break-even price is £1,395. On a 390kg carcase, the beef price required is £3.57/kg.
Complete a budget before buying cattle and use realistic prices.Compare costs of buying heavier cattle to kill off grass against lighter cattle to kill next winter.Know what price you pay per kg of liveweight and the equivalent beef price.Look to buy cattle that are value for money.Buy from farms with good health status and herd genetics.Do not buy over-fat cattle as they will lose too much condition when they go to grass.Buy larger batches of cattle all at once, rather than buying small numbers every week that present a continual disease risk.Buy cattle of similar age, type and size to simplify management.Quarantine cattle on arrival to your farm.Vaccinate for IBR and dose cattle for parasites before joining your herd. 
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