The live trade for light store cattle ideally suited to summer grazing systems is gaining momentum, as buyers react to improving ground conditions and increasing grass growth around the country.
Mart managers report that more farmers are attending weekly sales and actively looking for cattle weighing 400kg to 500kg, with prices of €2.20 to €2.60/kg on offer depending on cattle quality.
There is also growing demand for store animals from 300kg to 400kg liveweight as these animals require less capital to purchase compared to midweight stores.
The economics of buying store cattle for intensive finishing are highly questionable. The profits are, at best, breakeven to marginal.
Buying store cattle in spring to finish next autumn and winter is a complete gamble. There is no indication of what beef price will be when selling cattle, which makes it extremely difficult to budget on what you can afford to pay for cattle.
Budget
The best a farmer can do is to draw up a simple budget based on current beef prices, feed prices and the cost of buying stores.
Also, converting the purchase price of cattle to an approximate beef price gives a guideline as to whether or not store cattle are value for money.
For example, buying a 400kg continental cross steer at €2.40/kg will equate to a purchase price of €960.
Dividing price per kilo by typical kill-out percentage gives an indication of the purchase price in relation to beef price. For instance, €2.40/kg at a kill-out of 57% converts to a beef price equivalent of €4.20/kg.
While this is not the actual breakeven price required for finishing the animal, it is good barometer to determine if the purchase price is in line with current beef prices.
In the outlined example, the animal would struggle to realise a profit unless there is a significant increase in beef prices by the time it is ready to kill.
Tweak the system
Before buying cattle, consider all the options available and weigh up the pros and cons of different systems.
For example, buying forward store cattle in April and finishing the animals off grass in October is simple to operate.
However, store cattle prices are usually at their peak in April, but increasing availability of slaughter cattle coming off grass in autumn means beef price is usually under pressure.
This makes this system questionable in terms of economics. Therefore, it may be worthwhile altering the system.
Outlined are the main options open to beef farmers looking to purchase grazing cattle this spring, including the pros and cons of each system.
Buying forward cattle to kill in summer
Where finishers are looking to re-stock beef units after the winter finishing period, buying forward store heifers to kill off grass in June and July is an option.
This period usually coincides with improved demand for cattle, as supplies of shed-finished cattle are nearing an end and there is no real flow of grass-finished animals.
Heifers are better suited to killing off grass than steers. Animals with Angus or Hereford breeding will require less concentrates than continental types and are more inclined to meet the required fat classification.
Another advantage with this option is the quick turnover of cattle, which improves cashflow.
However, as cattle have a heavier starting weight, they will require a bigger outlay of capital at purchase so make sure farm finances can cope.
Also, farmers will find themselves competing against specialist finishers for this type of animal.
Buying a plainer animal that can be improved in conformation is usually better value than buying top-quality U grade continentals.
To maximise profit margin, heifers should be lean when purchased and turned out to grass immediately. Overfat cattle will not thrive when put to grass, delaying the animal’s kill date.
Basic budget
Excludes fixed and miscellaneous costs:
Purchase price – 520kg heifer @ €2.25/kg = €1,170Grazing cost – 80 days @ 50c/day = €40Concentrates – 4kg/day @ 30 days @ €270/t= €32.40Finishing costs= €1,242.40Weight gain – 80 days @ 1kg/day= 80kgCarcase weight – 600kg @ 55% kill-out= 330kgBreakeven price= €3.76/kgBuying store to kill in autumn
This is a commonly practised system on Irish beef units and is simple to operate. Stronger store cattle are purchased in spring and killed off grass in October to November.
However, as supplies of finished cattle are increasing at this time, beef price usually comes under pressure.
Also, there is usually a growing percentage of dairy-bred beef cattle coming from off grass in autumn, which creates price pressure and competition for continental-bred animals.
As cattle can be purchased at light weights, there is less capital tied up in purchasing these animals but there is a longer period until animals can be cashed in compared to option 1.
Again, heifers are more suitable to this system than steers as they will be easier to kill off grass.
Getting steers to the correct fat score on a grass finishing system can be difficult, especially for animals with continental breeding.
As grass dry matter declines in autumn, cattle will require higher supplementation rates with concentrates to make up the energy deficit.
Basic budget
Purchase price – 420kg heifer @ €2.50/kg = €1,050Grazing cost – 200 days @ 50c/day = €100Concentrates – 6kg/day @ 40 days @ €270/t= €65Vet= €10Finishing costs= €1,225Weight gain – 200 days @ 0.9kg/day= 180kgCarcase weight – 600kg @ 55% kill-out= 330kgBreakeven price= €3.71/kgGraze and finish
next winter
In this option, store cattle are bought in spring for grazing before housing for intensive finishing next spring.
As there is a longer period on farm, steers suit this system better than heifers. They are less likely to become overfat once higher levels of concentrates are fed. Steers will need to be 350kg to 400kg to reach a suitable carcase weight next April and as animals are lighter, they will cost less.
Again, the economics hang on buying slightly plainer animals that are capable of delivering good performance and increasing in conformation.
The main drawback is the longer time period until animals are ready for sale. Farm businesses will need sound finances and alternate sources of cashflow in the interim to avoid having to sell cattle before they are properly finished.
Simple budget
Purchase price – 380kg steer @ €2.60/kg = €988Grazing cost – 200 days @ 50c/day = €100Concentrates – 2kg/day @ 40 days @ €270/t= €21.60Silage – 170 days @ 25kg/day @ €25/t= €107Concentrates – 170 days @ 6kg/day @ €270/t= €275.40Vet= €25Finishing costs= €1,517Weight gain – 370 days @ 0.85kg/day= 315kgCarcase weight – 695kg @ 57% kill-out= 396kgBreakeven price= €3.83/kgGraze and sell
live in autumn
Another option is to buy light store cattle for grazing this spring and summer, before selling in the autumn.
There are several advantages to this, mainly the simplicity of management as cattle are managed at grass.
There is also the option to carry more animals at grass as, with fewer animals being wintered on farm, there is less need to close up grassland for making silage. This frees up more acres for grazing and allows for stocking rates to increase, which generates greater turnover of animals.
However, it is important to have a backup plan in the case of wet summer or autumn cutting the grazing season short, or forcing some heavier animals to be housed for a period.
Weight gain at grass is crucial. Therefore, it is important that grassland management is first class.
Cattle can be sold off grass as soon as grass growth starts to slow in early September, with heaver animals being marketed first as lighter animals are easier on ground and have a lower grazing demand.
Simple budget
Purchase price – 350kg steer @ €2.60/kg = €910Grazing cost – 200 days @ 50c/day = €100Concentrates – 3kg/day @ 40 days @ €270/t= €32.40Vet= €10Total costs= €1052.40Weight gain – 180 days @ 0.9kg/day= 162kgSale weight = 530kgBreakeven price= €1.99/kgThe four options outlined are meant to serve a guide for carrying out budgets before buying cattle. While the costings outlined are extremely basic, they do show how small the margins are in buying store cattle for finishing. Excluded from the examples are miscellaneous costs such as haulage, fencing, fees and no allowance has been made for labour, bank borrowings or fixed costs.
The examples also assume that animals are well managed and achieving high levels of performance. As the margins are extremely tight, there can be no room for over-priced cattle or under-performing animals.
As outlined in the article, do your sums carefully and consider all marketing options early so that an informed decision can be made on which system suits the farm.
The live trade for light store cattle ideally suited to summer grazing systems is gaining momentum, as buyers react to improving ground conditions and increasing grass growth around the country.
Mart managers report that more farmers are attending weekly sales and actively looking for cattle weighing 400kg to 500kg, with prices of €2.20 to €2.60/kg on offer depending on cattle quality.
There is also growing demand for store animals from 300kg to 400kg liveweight as these animals require less capital to purchase compared to midweight stores.
The economics of buying store cattle for intensive finishing are highly questionable. The profits are, at best, breakeven to marginal.
Buying store cattle in spring to finish next autumn and winter is a complete gamble. There is no indication of what beef price will be when selling cattle, which makes it extremely difficult to budget on what you can afford to pay for cattle.
Budget
The best a farmer can do is to draw up a simple budget based on current beef prices, feed prices and the cost of buying stores.
Also, converting the purchase price of cattle to an approximate beef price gives a guideline as to whether or not store cattle are value for money.
For example, buying a 400kg continental cross steer at €2.40/kg will equate to a purchase price of €960.
Dividing price per kilo by typical kill-out percentage gives an indication of the purchase price in relation to beef price. For instance, €2.40/kg at a kill-out of 57% converts to a beef price equivalent of €4.20/kg.
While this is not the actual breakeven price required for finishing the animal, it is good barometer to determine if the purchase price is in line with current beef prices.
In the outlined example, the animal would struggle to realise a profit unless there is a significant increase in beef prices by the time it is ready to kill.
Tweak the system
Before buying cattle, consider all the options available and weigh up the pros and cons of different systems.
For example, buying forward store cattle in April and finishing the animals off grass in October is simple to operate.
However, store cattle prices are usually at their peak in April, but increasing availability of slaughter cattle coming off grass in autumn means beef price is usually under pressure.
This makes this system questionable in terms of economics. Therefore, it may be worthwhile altering the system.
Outlined are the main options open to beef farmers looking to purchase grazing cattle this spring, including the pros and cons of each system.
Buying forward cattle to kill in summer
Where finishers are looking to re-stock beef units after the winter finishing period, buying forward store heifers to kill off grass in June and July is an option.
This period usually coincides with improved demand for cattle, as supplies of shed-finished cattle are nearing an end and there is no real flow of grass-finished animals.
Heifers are better suited to killing off grass than steers. Animals with Angus or Hereford breeding will require less concentrates than continental types and are more inclined to meet the required fat classification.
Another advantage with this option is the quick turnover of cattle, which improves cashflow.
However, as cattle have a heavier starting weight, they will require a bigger outlay of capital at purchase so make sure farm finances can cope.
Also, farmers will find themselves competing against specialist finishers for this type of animal.
Buying a plainer animal that can be improved in conformation is usually better value than buying top-quality U grade continentals.
To maximise profit margin, heifers should be lean when purchased and turned out to grass immediately. Overfat cattle will not thrive when put to grass, delaying the animal’s kill date.
Basic budget
Excludes fixed and miscellaneous costs:
Purchase price – 520kg heifer @ €2.25/kg = €1,170Grazing cost – 80 days @ 50c/day = €40Concentrates – 4kg/day @ 30 days @ €270/t= €32.40Finishing costs= €1,242.40Weight gain – 80 days @ 1kg/day= 80kgCarcase weight – 600kg @ 55% kill-out= 330kgBreakeven price= €3.76/kgBuying store to kill in autumn
This is a commonly practised system on Irish beef units and is simple to operate. Stronger store cattle are purchased in spring and killed off grass in October to November.
However, as supplies of finished cattle are increasing at this time, beef price usually comes under pressure.
Also, there is usually a growing percentage of dairy-bred beef cattle coming from off grass in autumn, which creates price pressure and competition for continental-bred animals.
As cattle can be purchased at light weights, there is less capital tied up in purchasing these animals but there is a longer period until animals can be cashed in compared to option 1.
Again, heifers are more suitable to this system than steers as they will be easier to kill off grass.
Getting steers to the correct fat score on a grass finishing system can be difficult, especially for animals with continental breeding.
As grass dry matter declines in autumn, cattle will require higher supplementation rates with concentrates to make up the energy deficit.
Basic budget
Purchase price – 420kg heifer @ €2.50/kg = €1,050Grazing cost – 200 days @ 50c/day = €100Concentrates – 6kg/day @ 40 days @ €270/t= €65Vet= €10Finishing costs= €1,225Weight gain – 200 days @ 0.9kg/day= 180kgCarcase weight – 600kg @ 55% kill-out= 330kgBreakeven price= €3.71/kgGraze and finish
next winter
In this option, store cattle are bought in spring for grazing before housing for intensive finishing next spring.
As there is a longer period on farm, steers suit this system better than heifers. They are less likely to become overfat once higher levels of concentrates are fed. Steers will need to be 350kg to 400kg to reach a suitable carcase weight next April and as animals are lighter, they will cost less.
Again, the economics hang on buying slightly plainer animals that are capable of delivering good performance and increasing in conformation.
The main drawback is the longer time period until animals are ready for sale. Farm businesses will need sound finances and alternate sources of cashflow in the interim to avoid having to sell cattle before they are properly finished.
Simple budget
Purchase price – 380kg steer @ €2.60/kg = €988Grazing cost – 200 days @ 50c/day = €100Concentrates – 2kg/day @ 40 days @ €270/t= €21.60Silage – 170 days @ 25kg/day @ €25/t= €107Concentrates – 170 days @ 6kg/day @ €270/t= €275.40Vet= €25Finishing costs= €1,517Weight gain – 370 days @ 0.85kg/day= 315kgCarcase weight – 695kg @ 57% kill-out= 396kgBreakeven price= €3.83/kgGraze and sell
live in autumn
Another option is to buy light store cattle for grazing this spring and summer, before selling in the autumn.
There are several advantages to this, mainly the simplicity of management as cattle are managed at grass.
There is also the option to carry more animals at grass as, with fewer animals being wintered on farm, there is less need to close up grassland for making silage. This frees up more acres for grazing and allows for stocking rates to increase, which generates greater turnover of animals.
However, it is important to have a backup plan in the case of wet summer or autumn cutting the grazing season short, or forcing some heavier animals to be housed for a period.
Weight gain at grass is crucial. Therefore, it is important that grassland management is first class.
Cattle can be sold off grass as soon as grass growth starts to slow in early September, with heaver animals being marketed first as lighter animals are easier on ground and have a lower grazing demand.
Simple budget
Purchase price – 350kg steer @ €2.60/kg = €910Grazing cost – 200 days @ 50c/day = €100Concentrates – 3kg/day @ 40 days @ €270/t= €32.40Vet= €10Total costs= €1052.40Weight gain – 180 days @ 0.9kg/day= 162kgSale weight = 530kgBreakeven price= €1.99/kgThe four options outlined are meant to serve a guide for carrying out budgets before buying cattle. While the costings outlined are extremely basic, they do show how small the margins are in buying store cattle for finishing. Excluded from the examples are miscellaneous costs such as haulage, fencing, fees and no allowance has been made for labour, bank borrowings or fixed costs.
The examples also assume that animals are well managed and achieving high levels of performance. As the margins are extremely tight, there can be no room for over-priced cattle or under-performing animals.
As outlined in the article, do your sums carefully and consider all marketing options early so that an informed decision can be made on which system suits the farm.
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