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The beef business is a funny old game. In theory, it should be simple.
You buy a beef animal of your choice, throw it out in the field, the grass grows and sun shines, it gets fat, you sell it. Boom, profit, happy days.
Only it’s not that simple is it?
If you breed your own calves, you avoid the excitement of the public auction system which has its positives and negatives. If you buy direct from a farm, you may be cornered on price unless you have a good source reporting from the mart.
There are many ways to source your product and it’s up to you which way you choose. We buy at marts and direct from farmers.
In any successful business, the cornerstone to success is knowing the buying and selling price of whatever product, material or service is being provided.
Many would say the beef factories are the bookies of our game, always winning.
In contrast, I can say with 100% certainty that as a beef farmer, you have no idea before you start off your buying or selling price.
It’s the ultimate gamble. I challenge any high stakes roller to dip his toe into the beef game and see how they fare.
It probably says a lot about the beef trade that so many people back horses rather than cattle and yet, who wins in that game only the bookie.
Many would say the beef factories are the bookies of our game, always winning.
Although to be fair, I would prefer my routine of dropping the beast at the factory and taking home the cheque that day over trying to sell 100 different bits of an animal and working on 90-day credit terms to collect.
Despite the huge uncertainty hanging over the beef trade recently with a looming influx of and the threat of Brexit, 2016 wasn’t the worst year on this farm for our beef enterprise.
The last of the beef heifers exited stage left last week at €3.93/kg base price; they were €3.95/kg base price in August 16.
Brexit weekend in the UK (21 June, 2016) wiped 15c/kg off the price of beef straight away and it hasn’t recovered since. People are asking how Brexit will affect the beef trade in the future but in fact it already has.
Place your bets now
Nonetheless, our ICBF kill report for the 12 months makes for slightly better reading than one would have anticipated.
You probably think we started growing more grass or maybe we measured and utilised it better, or maybe the cattle throve better. But I can tell you with 100% certainty it was none of the above.
The biggest reason for our better 2016 is that in our buying campaign of autumn 2015/spring 2016, we budgeted on a selling price of €4/kg.
This was no genius on our part, simply that we were pure optimists at the time.
So now we strike off on another campaign with the same level of optimism again. Surely it can’t get any worse.
The chances of €3.75c/kg next October, am I a betting man? Not really, but I’m going to take another punt at the game again.
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