With cattle being housed, it is decision time on a lot of farms: store animals over winter or incur a high-cost feeding period and finish out of the shed. For many, winter finishing is a gamble that has not paid off in a number of years.

However, not all farmers are in this boat. Given the level of financial risk involved, we have seen closer integration between specialised finishers and beef processors. This distorts the trade with these select finishers receiving significant premiums over what is being quoted to the average seller.

It raises the question as to whether the typical farmer finishing 30-40 head has a future in winter finishing. A suckler or calf-to-beef system has a greater level of insulation and control of costs but a farmer competing with specialised finishers for store cattle needs to assess what they are doing. These specialised finishers have the power to negotiate on input costs and the luxury of a price guarantee.

While we are hearing reports of beef factories being less willing to offer contracts for winter finishing, some large finishers have already secured prices on contract which are 60-70 cents above current prices. The typical farmer finishing 30-40 cattle will subsidise these contracts. This year, the risk of feeding non-contracted cattle is even higher than previous years given the concerns over Brexit.

Listen to a discussion of current beef prices and advice to adapt your winter management to market conditions in our podcast below:

Listen to "Beef prices under pressure" on Spreaker.