The BETTER Farm Beef Challenge was launched in Northern Ireland (NI) in May 2017 as a three-year initiative involving programme partners, the Irish Farmers Journal, ABP Food Group and CAFRE.
Replacing the NI Suckler Beef Programme, which had been operational since 2011, 10 farms were selected in the new project, with the aim to demonstrate how improving technical efficiency inside the farm gate could drive profit margins on farms.
Nine farms remained at the end of the programme.
Business plans were developed for each farm, with a common target across all farms to ensure best use of resources, and for those on productive/improved land to hit a gross margin (GM) of £1,000/ha (€1,162).
While GM is not net profit, as fixed costs, borrowings, labour and drawings are omitted, it is the best indicator of technical efficiency inside the farm gate.
GM is basically farm output (sales) minus common variable costs such as fertiliser, purchased feed and veterinary fees.
These inputs are linked directly to stock numbers and management, making them directly comparable to other farms. The same applies to farm sales.
Farmers have no control over the market price when selling livestock.
But they do control when cattle are ready for sale, the type of animals produced and the level of inputs used each year.
The programme has demonstrated that in the medium to long term, suckler farms with a defined system in place are always more profitable.
With the programme finished, a summary of what it has delivered for the farmers is outlined on the following pages.
During the programme, GM increased from £602 (€691) in the baseline year (2016) to £1,003/ha (€1,153) - a 67% increase.
While GM is not net profit, it is a significant increase in farm income generated from the same land base being farmed.
The average farm within the programme is 60ha and carries an average of 72 cows, excluding replacements.
Applying the £401/ha (€461) increase in GM to the average farm, this means there is an additional £24,060 (€27,655) generated to cover fixed costs, labour, borrowings, drawings and for re-investing in the business. Any premia, such as BPS, is excluded from the benchmarking figures, so this money has to be added back into the pot as well.
While beef price has increased by 30p/kg (34c/kg) to £3.58/kg (€4.34/kg inc VAT), it is not the main reason for the 67% increase in GM/ha.
Stocking rate has increased and the farms were weaning 20% more liveweight in autumn 2020 from the same land base.
This is filtering through into more cattle sold from the same acreage of grassland.
Fertility has improved, with condensed calving periods and cows being served to top genetics through AI and natural service.
Doing the basics right
But before the farmers increased cow numbers, the focus was on getting the basics of grassland management, soil fertility, herd fertility and animal health right.
There is no point increasing stock numbers unless grazing ground can support more cattle. Similarly, there is no point increasing numbers if herd health has underlying issues. By getting the basics right, the farms have a solid foundation for improving profitability.