The lack of grass growth and poor grazing conditions during April has acted to delay the traditional trade in the purchase of “grass cattle”.

However, with marts reporting that there are increasing numbers of lighter store cattle passing through the rings, and more buyers on site as ground and grazing conditions improve, is there still a margin to be had in buying cattle to graze and fatten next winter?

Cattle most in demand are steers and heifers weighing 350kg to 440kg with current prices of 200p/kg to 220p/kg and above, for continental types.

Earlier this spring, the same store cattle were a slower trade due to the lack of buying demand, shortage of fodder and few opportunities to turn them out to grass.

But at current mart and beef prices, there is still potentially a positive margin to be achieved when buying store cattle for grazing. The best value is in purchasing slightly plainer animals, or cattle that have not been overfed concentrates prior to sale.

If a profit is to be made on stores, the key issue is to avoid overpaying. However, when entering the mart, you have no idea of what beef prices will be next autumn and winter, or how cattle will perform.

But at the same time, you should not purchase cattle on a whim in the hope that they will leave a profit. The best way to determine what you can afford to pay for cattle is to complete a few budgets beforehand.

Convert to beef price

When buying cattle, farmers often overlook what price per kilo of liveweight they are paying, and what this converts to in terms of beef price.

For example, buying a 400kg steer costing £850 has a liveweight price of 212p/kg. To convert this to an equivalent beef price, simply divide it by the typical kill-out percentage of the animal.

For a steer that is likely to kill-out at 57%, the purchase price converts to a beef price of approximately 372p/kg.

While this is not a reflection of the break-even price required for finishing the animal, it is merely a guide to determine if the purchase price is anywhere in-line with current beef prices.

Budget

By completing a simple finishing budget, you can quickly work out the economics involved in buying grass cattle for winter finishing.

For the budget to be effective, always use realistic weight gains in cattle, input costs and beef prices. Do not use inflated beef prices as this will distort the economics in favour of buying cattle.

Taking a 400kg heifer purchased in May, with a target finishing weight of 600kg. At 55% kill-out, this will give a carcase weight of 330kg.

Assuming a daily liveweight gain of 0.9kg/day from purchase until slaughter, the animal will take around 220 days to fatten. This means a target slaughter date in mid-December, which is normally a period when processors have a strong demand for beef.

Purchasing the animal on 15 May and grazing until 1 October is a period of 148 days. Taking two heifers grazing per acre and four bags/acre of CAN (£210/t) spread during the grazing season, it will cost £42 per head for fertiliser.

Feeding 2kg/day of concentrate (£220/t) to heifers for 30 days prior to housing will cost £13. Moving the animal on to a finishing diet of 25kg/day of silage (£25/t) and an average of 5kg/day of concentrate (£220/t) will cost £124 per head.

Adding in £100 to cover veterinary, miscellaneous and fixed costs, and assuming the animal cost £850 to buy (212p/kg), the total cost to bring the animal to finish is £1,129. On a 330kg carcase, this works out at a break-even beef price of 337p/kg (Table 1).

If beef prices were to hold at current price of 360p/kg, this would give a margin of £50 to £60 per head on each animal.

Plan when cattle will be sold

When buying cattle, you should have an idea of when they will be sold. If you are short on housing, then you need to be buying heavier animals that can be finished off grass, or after a short housing period.

There are also periods of the year when beef prices are under pressure. This can be due to slow demand, which can occur in January or February, or during periods when supplies of finished cattle are increasing, such as September when cattle are coming off grass and before housing.

By planning when you want to sell cattle, you can avoid having animals for slaughter during these periods and sell when processors want beef.

Buy even groups of cattle

Buying cattle of similar weight, age and size will make it much easier to manage cattle as a single group at grass, and during the intensive finishing period.

Having evenly matched cattle also means that bigger groups can be marketed at the same time, putting you in a better position to negotiate on beef price.

Buy value for money

More often than not, plainer cattle tend to leave a healthier margin than top-quality continental animals. It is purely dependent on purchase price.

Ideally, you want to buy healthy cattle with well-developed frames that are not over-fat so that they thrive as soon as they hit grass. Under good management, these cattle can achieve high levels of performance and carcase weight, which maximises the possible margins achieved.

Buy bigger groups over a shorter time period

Buying bigger cattle groups in a shorter time period reduces the risks of disease entering a herd, compared with buying smaller numbers over a longer time period.

Once cattle are bought, they should be quarantined for a short period before joining other cattle on the farm.

This allows cattle to recover from the stress of moving through the mart, as well as showing up any underlying health problems in newly purchased animals.

Vaccinate and dose

Cattle should get a worm dose, and potentially also an IBR vaccine on arrival, to ensure that they are healthy and do not pose a risk to any other animals on the farm.