In the coming weeks, calves will start to arrive once again on the Irish Farmers Journal, Thrive demonstration farm outside Cashel, Co Tipperary.

With the 2020-born stock all slaughtered at this stage, it is important to sit down and look at the economics of each system prior to starting all over again.

The farm runs both early- (Angus and Hereford) and late-maturing (Limousin and Belgian Blue) cattle, with an even split between bullocks and heifers.

Just over 140 cattle were slaughtered last year, however there were more early-maturing types (101) than late-maturing (40) due to calf price and the fact that it reflects the numbers and availability of these breed types in the market.

Overall, 2021 was a positive year in terms of beef price, especially compared to the depressed prices seen throughout 2020. As a result, the average beef price paid in 2021 was 49c/kg and 59c/kg higher for heifers and bullocks respectively.

As might be expected, a beef price increase such as this can cover up a lot of increased costs that are creeping into the system.

Fortunately, having a system in place that aims to slaughter as many cattle off grass at the end of the second grazing season as possible worked in the farm’s favour this year, as it meant it escaped at least some of the meal price rises seen over the last six months.

With an average slaughter date of 17 October, on average the cattle slaughtered last year were 12 days younger than their counterparts the year previous.

However, this younger slaughter age did come at the expense of carcase weight, with heifers weighing 11kg lighter and bullocks 14kg lighter than the previous year.

Despite this, the average carcase value increased by €87 for heifers and €153 for bullocks due to increased beef prices.

The reduced slaughter age also meant a lower amount of meal fed per animal.

Net margin

All this points to higher net margins being recorded compared to 2020.

It has to be said that 2020 was a very poor year for beef farmers, with unsustainable beef prices and so any comparison should be reflected on in this light.

Overall, net margin is up €104/head across both bullocks and heifers. The system that left the biggest net margin was the early-maturing steers.

With an average carcase weight of 308kg at 19 and a half months, these animals graded between an O= and O+ with an average fat score of 3= and a beef price paid of €4.37/kg, just 8c/kg behind the late-maturing bullocks who graded R-3- on average at a carcase weight of 314kg.

It shows the importance of both calf price (€196 for early-maturing, €233 for late-maturing steers) and the factory breed bonus payment for these breed types in order to make them economically competitive.

Outlook for 2022

Unfortunately the positivity of 2021 cannot be seen when we forward project to slaughtering this year’s stock.

When we factor in the higher concentrate costs it results in an additional €31/head.

Increased fertiliser costs will mean a €75/head increase, while higher fuel, power and contractor charges are expected to increase costs by between €12/head and €15/head on the farm.

Putting these all together brings the total cost increase to between €118/head and €121/head.

Expressing this on a beef price per kilo, it works out to be 42c/kg based on the average carcase weight achieved on the Thrive farm last year.

Obviously steps will need to be taken to try to reduce some of these inputs where possible.