At the current prices being paid for forward store cattle in local marts, beef finishers will need prices around the 700p/kg mark next spring if positive margins are to be had, research by the Irish Farmers Journal suggests.
Our analysis is based on 550kg continental steers bought on 15 September at 400p/kg liveweight, which equates to £2,200/head.
The animals are stored for 90 days during which they consume 25kg silage and 3kg concentrate per head per day, with silage costed at £30/t and meal at £270/t.
They move to a 100-day finishing period on 15 December and are offered 7kg of concentrate and 20kg of silage daily.
Total feed costs come to £390, while there is also £10/head added in for fluke, worm and lice treatment and £5 for other costs. That leaves these basic variable costs at £405.
Allowance
To help cover other costs, including machinery running expenses and shed maintenance, an allowance of 85p/head/day is included, which adds £161.50.
Steers are 715kg liveweight at finish, so assuming a kill-out of 56%, it is 400kg deadweight.
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To cover the outlined costs, an average beef price of 692p/kg is required. Adding in a small £50 margin for the farmer, it is a finished price of 704p/kg. At a £100 per head margin, the required price rises to 717p.kg.
BCR scheme
However, there is still the £75 per head Beef Carbon Reduction (BCR) scheme payment to be factored in. Given that finishers have given most of this money away in an inflated price paid for stores, there is an argument it should be allowed for in our final calculations. The £75 payment is worth just under 19p/kg on a 400kg carcase.
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