Last week’s Thrive article outlined the physical performance of the 2019-born calves on the demonstration farm that were slaughtered from September 2020 through to early January 2021. This week, we concentrate on the financial performance of these animals and the different sires used.
Figures 1 and 2 outline the makeup of the diet on a dry matter (DM) basis for heifers and steers respectively. This shows that grazed grass makes up two-thirds of the heifers’ lifetime diet on farm, while the bullocks are just slightly behind this at 62%.
Grass silage makes up the next greatest proportion at just under a quarter of the diet, while concentrates make up just 11% of the heifer diets and 14% of the steer diets.
This means that forage makes up almost 90% of the animals’ lifetime diets. Remember, this is on a DM basis. If we were to look at it on a freshweight figure (concentrates are 85% DM versus silage at 28% DM and grazed grass around 18% DM), the proportion of concentrate in the diet would account for less than 4% of the total diet.
Interestingly, when we look at the cost of each of these inputs (Figures 3 and 4), although concentrate makes up such a small proportion of the diet, it accounts for a significant proportion of the overall feed costs associated with the production system at 27% for heifers and up to one-third for the steers.
This shows the importance of maximising the contribution of grazed grass in the overall diet – early turnout, a long grazing season and highly digestible leafy swards of grass that drive on performance.
For the months of the year where grazed grass is not an option, high-quality silage needs to be at the ready to make up as much of the remainder of the diet as possible. The 2019-born cattle in question spent the first winter on silage with a dry matter digestibility (DMD) figure of 72%, while for those that were rehoused for a short finishing period last autumn, the silage quality was even higher at 76% DMD.
This allowed us to keep concentrate to an absolute minimum. The average lifetime concentrate input for heifers was 485kg and 725kg for the steers. Where grassland management is poor or silage quality is not excellent, then a much higher level of concentrate input would be required to maintain this level of performance.
It is unfortunate that excellent production performance of these animals was not backed up with the required financial performance they deserved. At an average beef base price received of €3.70/kg, no beef system can expect a viable return. The average gross margin for heifers was €319/head and €368/head for steers.
Depending on your own farm’s overheads and the value you place on land rental and labour costs, there is in the region of €280/head to €320/head fixed costs to be placed on top of this, meaning the system struggles to return a positive net margin.
We must be mindful of the fact that these animals of known, high-genetic merit, continually hit targets throughout the system and achieved carcase weights well above what would be typical for dairy-beef animals slaughtered at a similar age, and yet they struggled to leave a positive return.
It must be stressed that this is a small dataset and therefore the performance of individual animals has a big effect on the overall result. Therefore, any generalisation of the findings from the study need to be carefully considered. What it does do, however, is clearly display the huge variation between the performance, both physical and financial, seen across and within breeds.
It also highlights the need for more information for dairy-beef farmers when purchasing calves on the genetic merit of the animal before them.
Tables 1 and 2 look at individual sire performance of both heifers and steers from the 2019-born cattle on the Thrive demonstration farm. There was a maximum difference of over €216/head in gross margin between sires for steers and €160/head within the heifers’ sires. Interestingly, the biggest difference within the heifers was for two sires within the Hereford breed.
Driver of profit
Stepping back and looking at the entire production system, a few key parameters are having the greatest effect on the differing gross margin levels being achieved both on the input and output side of the equation.
Clearly, as outlined above, on the input side of things, a huge impact on the overall gross margin is the amount of concentrate it takes to get the animals finished.
For the bullocks this varied from €73/head (HE4105), up to €193 (BB4286).
On the output side, there are two key parameters – carcase weight and conformation.
Carcase weight is self-explanatory with more kilos obviously meaning more output.
However, it is worth noting that it was not the sires delivering the heaviest carcase weights alone that were returning the highest gross margins.
It depends on where this weight is coming from – grazed grass or concentrates.
Conformation is another key parameter.
Take, for example, two sires - AA2163 and Hereford bull SPL. For the heifers, both sires achieved similar carcase weights at 264kg and 262kg, respectively, at an average slaughter age of just over 19 months.
However, due to the poorer conformation score achieved by SPL, it resulted in a 12c/kg differential in beef price paid, meaning a €31/head difference in carcase value between the two sires.