Billy Glasheen operates one of only two trading systems in the BETTER farm programme. He farms 43ha, split in two blocks. Both farms are relatively dry and can carry cattle early in the season.

Billy opts for traditional beef breed (Aberdeen Angus/Hereford) cross from the dairy herd. His current plan is to slaughter 120 animals from grass annually, with a further 80 finished over the winter period. Over the last year, he has dabbled in finishing bulls but has decided to discontinue due to the high input costs, low margins and weight limits.

Extra beef

Since the programme commenced in 2011, Billy has made huge technical advances and fine-tuned his farming system. A focus on maximising grass production and utilisation has facilitated a 30% increase in stocking rate from 1.95 to 2.53 LU/ha. Relative to 2011, the farm is now producing €50,800 worth of extra beef annually.

“I have become a grass farmer – working on reseeding, liming and soil indexes to the extent that most of my fields are at three and four (optimum). My cattle graze in a paddock system, allowing me to carry more stock and keep a handle on the quality of the material under them. And do you know what, grass is easier to manage at a high stocking rate. I haven’t had the same headaches with grass quality that other farmers have had this summer: I’ve made quite a few bales alright, but every bale made is super quality and will be used for winter finishing.

Winter woes

But talk of winter finishing is where the positivity wanes. Similar increases in efficiency and output on many of the programme’s suckler farms have seen system profitability jump. Yet, increasing store prices and relatively stagnant beef prices have not improved Billy’s bottom line in recent years. Indeed, neither of the store-to-beef operations in the programme has achieved the target €1,000/ha gross margin figure.

A retired accountant, he keeps a tight handle on his farm’s finances. As all producers should, Billy has carried out a precise budget before deciding if he will finish cattle this winter – but his projected figures for this winter make for harrowing reading.

“There is a big demand for the type of beef that I’m producing on this farm (AA/HE). However, when I do my sums, it doesn’t add up. There are massive overheads in winter beef finishing production systems – they need to go in. We don’t work for free either – a labour charge must be included too.”

Billy Glasheen – one of the most technically efficient BETTER farmers in the programme – requires a beef price of €4.79 in the springtime to cover his costs and make a €50 margin on each animal at current live prices.

At best-case scenario for beef price, Billy will be €248 short of what he needs to cover costs and make a €50 profit, per head, this winter. He is now seriously considering the option of just storing all his cattle over the winter and cutting back his numbers finished.

“There is no denying that my type of animal suits a grass-based system. Production from grass is keeping our heads above water at present. But the walls are slowly but surely closing in on trading farmers like myself. On one side you have a growing live price and on the other, a shrinking beef price. Soon, you must question whether even production from grass will be profitable.”

While the budget presented here is unique to Billy Glasheen’s enterprise, there are no significant oddities that stick out.

His fixed costs of €500/ha are in line with Teagasc profit monitor figures, but in practice the figure can come in anywhere from €150-€1,000, depending on farm size, output and levels of investment. Fixed costs are outgoings not directly involved in production and include things like cost of credit, machinery costs, depreciation, insurance, repairs and maintenance, electricity, phone bills and motor expenses. In any budget, hourly labour charge and margin-per-head figures are at the discretion of the individual, but what Billy has presented here are not excessive by any means.

All the risk

“Should I finish cattle this winter? Costs are high and there is no winter finishing premium being given to cover the higher costs. I know my input costs but have no idea of my selling price and no guarantee of a minimum selling price – I am carrying all the risks. Ultimately I may have to revert to seasonal beef production, just killing cattle off grass.”

It is important that winter finishers carry out similar budgets and take into account the bigger picture when doing so – that is, look beyond direct costs. If viable, choose an animal that will work for you, stick to that type of animal and have a good handle on what you can afford to give based on future projections.