Around one in two cattle processed for beef in NI originates from a dairy dam, whether as a beef cross or pure dairy-bred animal.
In recent years, many suckler farmers have scaled back on cow numbers, or exited the sector completely and started a dairy calf-to-beef enterprise.
Premiums on traditional beef breeds, as well as the availability of calves year round have attracted farmers into the system.
In addition, some processors offer supply contracts, with a guaranteed market and sale price, removing a lot of the risks associated with beef finishing.
However, a major downside with calf-to-beef systems has been the rise in input costs such as feed, and the cost of calves, with beef sired animals frequently making £400 to £500 at two to three months.
Both have combined to put pressure on the economics of taking calves through to beef.
To determine the costs associated with a calf-to-beef enterprise, we use an example of a farm under good levels of management with typical input costs at present.
The farmer buys December-born calves on 10 March, just as they are weaned. Calves are Angus cross from a high index bull and cost £500.
As calves are Angus-bred, the example assumes a 24-month steer finishing system with animals killed through a premium beef scheme.
On arrival to the farm, calves get silage and 2kg/day of concentrates (£265/t), plus respiratory vaccines (£15/head). Purchase weight is 140kg.
Calves are rotationally grazed from 10 April to the end of 20 October (193 days) on good quality swards, with 1kg/day of concentrate fed from 1 August until housing.
Grazing swards get four bags of CAN (£250/t) over the season with four calves grazed per acre. Including two worm drenches, plus fluke and lice treatment after housing, at a cost of £10/head, and adding in £25/head of miscellaneous costs, total input costs come to £550/head.
Assuming a daily weight gain of 0.8kg/day, housing weight is approximately 294kg.
Winter and second summer
Steers are housed from 21 October until 10 April and fed an average of 15kg/day of silage (£25/t) plus 2kg of concentrate (£265/t), which costs £154/head over the 170 day period. There is a further £15/head allowed for miscellaneous costs. Assuming a daily gain of 0.5kg/day during the winter, turnout weight is approximately 379kg.
During the second grazing, cattle are grazed on paddocks at a stocking rate of 2.5/acre. Again, four bags/acre of CAN (250/t) is applied over the season and cattle get two worm drenches (£5/head).
A further £25/head is included for miscellaneous costs at grass to cover electric fencing, mineral supplementation, etc.
Again, housing date is 20 October and assuming a gain of 0.8kg/day at grass, weight should be around 515kg.
Steers are then intensively finished over the next 100 days, which includes a 20-day transition period from a grass to silage diet after housing.
No weight gain is assumed during this 20-day period, but animals gain 1kg/day over the remaining 80 days.
The finishing diet is 25kg/day of silage (£25/t) and an average 4kg/head of concentrate (£265/t), which means costs over this period come to £170/head. Final liveweight is 595kg, which at 55% kill out is a carcase weight of 327kg.
As shown in Table 1, the total variable costs outlined come to £976/head. Factoring in fixed costs at 50p/day on farm over the 686 day rearing period and a modest £50/head margin, total production costs from the outlined example are £1,369 per head.
On a 327kg carcase, break-even beef price needs to be in the region of 419p/kg.