“There are many challenges facing the beef sector. Low beef prices are eroding confidence in the sector with many of our clients continually questioning the future of suckler cows on their farm.” These were the comments from Aidan Murray, Teagasc beef specialist, speaking to the attendees on Thursday morning.

The Donegal man presented figures from the 2018 Teagasc profit monitor analysis. He first took a look at suckler-to-beef farms where 203 farms completed a profit monitor in 2018.

The analysis looks at the top-performing farms compared with the average and bottom third. The figures are sobering with the average suckler-to-beef farm making just €25/ha excluding premia in 2018.

Non-breeding farms have the potential to generate more liveweight per hectare

The bottom one-third are losing €290/ha before premia. With profit monitor analysis, we are not talking about the average beef farmer. In general, some of the best Teagasc clients complete this analysis so the average picture across the country is probably a lot worse than illustrated here.

It is a similar story with non-breeding farms with the average non-breeding farm (206 farms included in analysis) faring better, making €158/ha before premia. The top performers in this category are performing quite well making €1088/ha when premia is included.

Murray added: “The top non-breeding farms are again efficient on a per livestock unit basis and have then scaled up by increasing stocking rate. Non-breeding farms have the potential to generate more liveweight per hectare as the animals they buy have the potential to gain weight from the day they arrive until the day they leave.

"The suckler systems on the other hand have to maintain the cow, who in her own right doesn’t add to liveweight output given the cyclical nature of suckling.”

Table 3 compares what has happened on the top one-third of beef farms in the suckler-to-beef and non-breeding systems regarding physical and financial performance between 2008 and 2018.

The first striking feature of the table is that in both systems they have increased stocking rate from 1.95LU/ha to 2.26LU/ha on the suckler farms and from 1.61LU/ha to 2.2LU/ha on the non-breeding farms and increase 15.9% and 36.6%, respectively.

This has then transferred into a higher number of kilos of liveweight per hectare being sold off the farms.

The value of this output in monetary terms has also increased. The increase in output value of 59.6% and 95.1% on suckler and non-breeding farms, respectively, reflects an increase in the beef price and also the extra beef sold of these farms over the period.

Meanwhile, the support premia has dropped by €342/ha.

Comment

The Teagasc analysis is a stark reminder of the level of erosion of supports from our suckler and finishing farms over the past 10 years. The farms in the analysis have carried out everything according to the rulebook - increased stocking rate, liveweight gain and farm performance - yet they are being undermined through reducing supports.

One question that has to be asked is, where has this money gone? Has it been transferred to other enterprises such as dairy farming or tillage or has it moved to the hills and mountains of the west through the convergence model.

Supports are clearly fundamental to the very existence of our beef farms and future policymakers will need to take note if our industry is to survive.