This week we look at two low-ground suckler cattle systems, one selling stores and the other bringing cattle to finish.
We are using the Quality Meat Scotland enterprise costings data which is an average across 16 low-ground store producers with 1,216 cows and 22 low-ground breeder finishers with 2,305 cows.
The figures were published in November 2021 and come from 2020.
Low-ground store producer
The average herd size in the sample was 76 cows, which is above the national average of 60 cows.
The farms were stocked at an average rate of 1.8 cows to the hectare. There was an average of 21 cows per bull, which weaned 19 calves.
The stores are then sold at an average weight of 327kg with a daily liveweight gain of 1.2kg.
The cow replacement rate was on average 13.25% per year with a mortality of 2%.
The value of the calves sold was £683 per cow at sale after valuation changes.
Coupled payments were £90/cow and the replacement cost in the herd was £69/cow. This gave an average net output of £704/cow.
Variable costs
The costs attributed to each cow were £30 for 169kg of purchased concentrates at £177.50/t. There was also a homegrown concentrates cost of £28.50 for 198kg priced at £144/t.
Purchased roughage cost £48 and forage costs were £63. This brought a total feed and forage cost of £169.50. Vet costs were £45, bedding was £57 and other costs were £24. This meant the total variable cost was £295.50/cow, making a gross margin of £408/cow.
Fixed costs
The fixed costs per cow on the farm were £90 for paid labour and contractors were costing £24. Power and machinery was costing £71/cow with property maintenance and rent at £63. Depreciation was £64, finance was £23 and admin £25. This left a total fixed cost per cow of £360 and a net margin of £48/cow.
Bedding for farmers which finished their calves was £80/cow compared to only £57 for the store producers.
Breeder finisher
The average herd size was larger in this sample at 105 cows which were stocked at a rate of 1.3 cows per hectare. There was an average of 25 cows per bull which weaned 22 calves.
The offspring were then sold at an average weight of 601kg with a daily liveweight gain of 1kg per day. The cow replacement rate was on average 15% per year with a mortality of 2.6%.
The value of the calves sold was £1,118 per cow at sale after valuation changes. Coupled payments were £85/cow and the replacement cost in the herd was £75/cow. This gave an average net output of £1,128/cow.
Variable costs
The costs attributed to each cow were £144 for 750kg of purchased concentrates at £192/t. There was also a homegrown concentrates cost of £80 for 550kg priced at £145/t. Bringing the calf to finished weight meant 1.3t of concentrates were allocated per cow and calf compared to the store producer who only used 367kg.
Breeder finishers used 1.3t on average to over winter the cow and bring the calf to a killing weight.
Purchased roughage cost £62 and forage costs were £101. This brought a total feed and forage cost of £387. Vet costs were £51, bedding was £80 and other costs were £46.
This meant the total variable cost was £564/cow, making a gross margin also of £564/cow.
Fixed costs
The fixed costs per cow on the farm were £134 for paid labour and contractors were costing £51. Power and machinery costs were £88/cow, with property maintenance and rent at £102.
Deprecation was £75, finance was £27 and administration £39.
This left a total fixed cost per cow of £515 and a net margin of £49/cow.
Vet and medicine bills were on average around £40/cow.
Conclusions
The margin on both enterprises is almost exactly the same at just under £50/cow.
Some of the breeder finishers who were making a loss per cow were spending more on bedding, while not buying as much concentrate which could mean calves were not pushed enough to get them finished quickly.
Also, farmers who grew more of the concentrates themselves were leaving a greater margin.
Again comparing different store producer systems, farmers which fed more barley were leaving a greater margin. Store producers in the top third were feeding 171kg more per cow and calf unit. This mean calves were being sold at a weight of 353kg compared to 295kg.
The cheaper barley in 2020 when these figures were produced meant that the more concentrates fed the better the margin in most instances but with the recent rise in grain price it would be prudent revisit this assumption.
Fit your system to what your farm can produce
Farmers should calculate the cost in feed for every kilo of liveweight gain in young stock.
The main message that comes through these studies is to fit your system to what your farm can produce.
Proposed £9.50/hour
rate for farm workers
The Scottish Agricultural Wages Board (SAWB) is seeking views on paying farm workers £9.50 as a minimum hourly rate from 1 April 2022. This is an increase of 59p/hour (6.6%) and is equal to the UK Government’s 2022 National Living Wage hourly rate.
Apprenticeship workers who undertake an SCQF Level 4 or 5 or equivalent in Agriculture/Horticulture will see a minimum hourly rate of £5.95 – an increase of 37p/hour (6.6%) compared to the previous year.
Dog allowance will be £7.01 per week for each dog up to a maximum of four.
Further changes will include an increase to the additional sum and offset rate for accommodation other than a house.
Overtime rate remains at 1.5 times the agreed hourly rate and will be £14.25 per hour
The additional sum will be £1.41 per hour for workers who have appropriate qualifications, and the daily rate for the accommodation offset for accommodation provided by an employer other than a house is to increase to £8.70.
Overtime rate remains at 1.5 times the agreed hourly rate and will be £14.25 per hour.
The wages board will meet in January to consider any written representations received with the industry encouraged to get in touch with their view.
NFU Scotland chief executive Scott Walker, who sits on the board, said: “These are big percentage increases that have been driven by the UK Government raising the hourly rate of the National Living Wage. While many who work in the farming industry are already paid substantially above this minimum rate, what the increase will do is put in place a much higher base floor.
“It is essential that the rest of the supply chain takes the higher wage rates that need to be paid into account and reflects this in the price they pay for goods that leave the farm gate.”
The Scottish Agricultural Wages Board is an executive non-departmental public body established under the Agricultural Wages (Scotland) Act 1949, for the purpose of setting minimum wages and other conditions of service for agricultural workers.
This week we look at two low-ground suckler cattle systems, one selling stores and the other bringing cattle to finish.
We are using the Quality Meat Scotland enterprise costings data which is an average across 16 low-ground store producers with 1,216 cows and 22 low-ground breeder finishers with 2,305 cows.
The figures were published in November 2021 and come from 2020.
Low-ground store producer
The average herd size in the sample was 76 cows, which is above the national average of 60 cows.
The farms were stocked at an average rate of 1.8 cows to the hectare. There was an average of 21 cows per bull, which weaned 19 calves.
The stores are then sold at an average weight of 327kg with a daily liveweight gain of 1.2kg.
The cow replacement rate was on average 13.25% per year with a mortality of 2%.
The value of the calves sold was £683 per cow at sale after valuation changes.
Coupled payments were £90/cow and the replacement cost in the herd was £69/cow. This gave an average net output of £704/cow.
Variable costs
The costs attributed to each cow were £30 for 169kg of purchased concentrates at £177.50/t. There was also a homegrown concentrates cost of £28.50 for 198kg priced at £144/t.
Purchased roughage cost £48 and forage costs were £63. This brought a total feed and forage cost of £169.50. Vet costs were £45, bedding was £57 and other costs were £24. This meant the total variable cost was £295.50/cow, making a gross margin of £408/cow.
Fixed costs
The fixed costs per cow on the farm were £90 for paid labour and contractors were costing £24. Power and machinery was costing £71/cow with property maintenance and rent at £63. Depreciation was £64, finance was £23 and admin £25. This left a total fixed cost per cow of £360 and a net margin of £48/cow.
Bedding for farmers which finished their calves was £80/cow compared to only £57 for the store producers.
Breeder finisher
The average herd size was larger in this sample at 105 cows which were stocked at a rate of 1.3 cows per hectare. There was an average of 25 cows per bull which weaned 22 calves.
The offspring were then sold at an average weight of 601kg with a daily liveweight gain of 1kg per day. The cow replacement rate was on average 15% per year with a mortality of 2.6%.
The value of the calves sold was £1,118 per cow at sale after valuation changes. Coupled payments were £85/cow and the replacement cost in the herd was £75/cow. This gave an average net output of £1,128/cow.
Variable costs
The costs attributed to each cow were £144 for 750kg of purchased concentrates at £192/t. There was also a homegrown concentrates cost of £80 for 550kg priced at £145/t. Bringing the calf to finished weight meant 1.3t of concentrates were allocated per cow and calf compared to the store producer who only used 367kg.
Breeder finishers used 1.3t on average to over winter the cow and bring the calf to a killing weight.
Purchased roughage cost £62 and forage costs were £101. This brought a total feed and forage cost of £387. Vet costs were £51, bedding was £80 and other costs were £46.
This meant the total variable cost was £564/cow, making a gross margin also of £564/cow.
Fixed costs
The fixed costs per cow on the farm were £134 for paid labour and contractors were costing £51. Power and machinery costs were £88/cow, with property maintenance and rent at £102.
Deprecation was £75, finance was £27 and administration £39.
This left a total fixed cost per cow of £515 and a net margin of £49/cow.
Vet and medicine bills were on average around £40/cow.
Conclusions
The margin on both enterprises is almost exactly the same at just under £50/cow.
Some of the breeder finishers who were making a loss per cow were spending more on bedding, while not buying as much concentrate which could mean calves were not pushed enough to get them finished quickly.
Also, farmers who grew more of the concentrates themselves were leaving a greater margin.
Again comparing different store producer systems, farmers which fed more barley were leaving a greater margin. Store producers in the top third were feeding 171kg more per cow and calf unit. This mean calves were being sold at a weight of 353kg compared to 295kg.
The cheaper barley in 2020 when these figures were produced meant that the more concentrates fed the better the margin in most instances but with the recent rise in grain price it would be prudent revisit this assumption.
Fit your system to what your farm can produce
Farmers should calculate the cost in feed for every kilo of liveweight gain in young stock.
The main message that comes through these studies is to fit your system to what your farm can produce.
Proposed £9.50/hour
rate for farm workers
The Scottish Agricultural Wages Board (SAWB) is seeking views on paying farm workers £9.50 as a minimum hourly rate from 1 April 2022. This is an increase of 59p/hour (6.6%) and is equal to the UK Government’s 2022 National Living Wage hourly rate.
Apprenticeship workers who undertake an SCQF Level 4 or 5 or equivalent in Agriculture/Horticulture will see a minimum hourly rate of £5.95 – an increase of 37p/hour (6.6%) compared to the previous year.
Dog allowance will be £7.01 per week for each dog up to a maximum of four.
Further changes will include an increase to the additional sum and offset rate for accommodation other than a house.
Overtime rate remains at 1.5 times the agreed hourly rate and will be £14.25 per hour
The additional sum will be £1.41 per hour for workers who have appropriate qualifications, and the daily rate for the accommodation offset for accommodation provided by an employer other than a house is to increase to £8.70.
Overtime rate remains at 1.5 times the agreed hourly rate and will be £14.25 per hour.
The wages board will meet in January to consider any written representations received with the industry encouraged to get in touch with their view.
NFU Scotland chief executive Scott Walker, who sits on the board, said: “These are big percentage increases that have been driven by the UK Government raising the hourly rate of the National Living Wage. While many who work in the farming industry are already paid substantially above this minimum rate, what the increase will do is put in place a much higher base floor.
“It is essential that the rest of the supply chain takes the higher wage rates that need to be paid into account and reflects this in the price they pay for goods that leave the farm gate.”
The Scottish Agricultural Wages Board is an executive non-departmental public body established under the Agricultural Wages (Scotland) Act 1949, for the purpose of setting minimum wages and other conditions of service for agricultural workers.
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