From the baseline year in 2016, gross margin per hectare (GM/ha) has increased by a staggering 67% on the programme farms, from £602 to £1,003/ha by 2020.
GM is compared on a per-hectare basis because land is the most limiting and valuable resource within any farm business. It also reflects technical efficiency levels, which are comparable from farm to farm.
Based on an average farm size of 60ha, the GM/ha increase of £401 equates to an additional £24,060 in farm income to cover fixed costs and return a profit.
There is a clear trend – as stocking rate increases, so does GM/ha. On the programme farms, stocking rate rose by 33% from 1.71 CE/ha in 2016 to 2.28 CE/ha in 2020.
As with the earlier phases of the programme, the farms operating intensive bull beef systems generated the highest GM/ha.
Such systems rely on higher stocking rates. This increases overall output, thereby offsetting the higher input costs associated with purchased concentrate.
On farms where stocking rate cannot be increased, for reasons such as land type, housing, work commitments etc, the steer system delivered a higher GM when compared on a per-cow basis.
Output per cow
Maximising output and sales in any suckler system should be the number one priority, regardless of stocking rate. During the programme, the number of calves born across the farms has risen significantly. In 2020, the total calf liveweight weaned increased by 20% from the baseline year.
All of the farms have focused on tightening calving patterns, which are now less than 12 weeks.
Calving index has reduced from 382 days in 2016 to 373 days in 2020. However, calving index as a lone figure does not always represent good fertility.
Scanning percentage within a defined time frame is a much better measure of fertility. As a group, average scanning rate is approximately 93% of cows put to the bull.
The second area is calf survival, with mortality across the farms falling from 4.8% in 2019 to 3% in 2020.
Weaning a calf from 90% of cows bred is ahead of the national average, and is difficult to achieve without focusing on easy-calving genetics, herd health and cow nutrition.
Maternal genetics have been utilised to breed cows with greater milking ability. However, this process takes time to bear fruit.
There is a wide range in calf weaning weights across the farms, with a differential of 70kg between the highest and lightest average at a standard 200 days old. Both farms are in bull beef systems, and this differential in weaning weight means that lighter calves take longer to finish and consume more concentrate.
Daily liveweight gain of 1.4kg and 1.2kg/day for male and female calves has been consistently achieved on several farms, regardless of breed type.
This indicates that milk yield and using the best genetics within a breed are more important than choosing native or continental breeds.
All farms had health plans developed at the start of the programme focussing on disease prevention.
Veterinary costs did increase on a per-hectare basis, as cow numbers are higher, but on a per-cow basis, it has fallen from £82 to £75/cow.
While this is a direct cost, excluded from the exercise is the potential loss in liveweight from sick calves.
Vaccination protocols cost approximately £30 to £35/cow across the farms, the equivalent of approximately 15kg of calf liveweight weaned per cow.
Output per hectare
There is little benefit to increasing cow numbers before addressing inefficiencies. But once they are addressed, increasing the number of cows will drive output and spread fixed costs over more animals. Increased numbers requires good grassland management to avoid higher concentrate use.
Grass yields averaged 9.03t/DM/ha last year, up from 7.4t/DM/ha in 2017, reflecting better grazing management and investment in soil fertility.
All farms have implemented a paddock grazing system, which has increased grass utilisation and supplemented winter fodder stocks. Without this system, the farms would struggle to carry higher stocking rates.
A four-year programme is a relatively short period in farming terms and progress is still ongoing.
Oliver Mckenna and Declan Rafferty/Aiden Quinn have been involved since 2014 and have shown how over a longer time period, investment in genetics and soil fertility drives profitability.
Grass growth on these two farms has averaged 10.9t/DM/ha during past two years, supporting an average stocking rate of 2.69 CE/ha.
The rise in beef price during 2020 benefited the programme farms. Average beef price across bulls, steers and heifers was £3.58/kg, up 9% on £3.28/kg in 2016. While this increased GM, beef price alone is not the leading reason for higher GM/ha. Input costs also increased, with concentrate costs rising from £179/t to £219/t.
Ultimately, the programme has focused on what can be managed inside the farm gate, leaving the farms in a more viable and sustainable position compared to 2016.