There are huge differences from one farm to the next in the level of profits made from beef farming.
When comparing calf to beef and suckling to beef systems it is true to say that there are probably bigger differences in profitability within the same farming system than between systems. The principles are the same for all systems of beef production.
Higher output when combined with lower costs leads to higher profits. The aim is to have a positive net margin per ha or per livestock unit on the farm.
Stocking rate is the main driver of output on higher stocked farms whereas output per livestock unit can be the main driver of profit on medium to lower stocked farms. In simple terms, a positive net margin results in the retention of all direct payments as profit.
Animal health, animal performance, grassland management, extending the grazing season, quality silage over the winter housing period, fixed costs and market value are the main factors that ultimately determine the profitability of the enterprise or system.
The health of the animal in its first year of life is highly influenced by the time-frame immediately after birth. Ensuring that the calf gets an adequate supply of quality colostrum as soon as possible after birth sets the calf up to reach his maximum growth potential.
The suckler farmer has full control over colostrum management the calf to beef farmer is relying on another farmer to do the job properly for him. Healthy animals put on more weight per day and reduce veterinary costs. Herd health planning with a local vet especially concentrating on vaccination protocols and parasite control is essential. Breeding animals may require additional vaccination and worm control measures are different for both systems as weaned calves on a mainly grass diet are more prone to lung worm and stomach worms than calves that are suckling cows.
Animal performance is largely influenced by the feed source offered. The larger the percentage of the diet that comes from grazed grass the higher the profitability of the system. Maximum weight gain from grazing animals occurs in spring and summer. In the autumn, weight gain is largely influenced by grass dry matter content and utilisation.
This is often a major issue on farms with heavy soils especially in the west and north-west. An autumn closing plan where the drier paddocks near the farmyard are targeted for grazing in early spring and closed first will ensure an adequate supply of grass from early February.
The grass that is available in February is mainly grown in October and November and will usually give you twice the weight gain in the spring than if it were grazed late into the autumn.
One of the advantages that the calf to beef system gives you when compared to suckling is the ability of the store to graze grass in the spring compared to the much heavier suckler cow. Calving date also influences the turnout date of suckler cows, as cows are generally housed up until calving. Similarly with lighter animals especially on heavier soils it is possible to leave animals out longer in the autumn with less risk of poaching damage.
The importance of silage quality in beef finishing systems is often overlooked. High quality 75+DMD silage alone is sufficient to achieve the target weight gains of 0.5-0.6kgs/days for weanlings over the first winter period. It is also capable of enhancing animal performance and replacing concentrate supplementation over the finishing period.
High quality silage is also important for cows post calving especially if there is a prolonged period between calving and turnout and is especially important in an autumn calving system.
Having an adequate supply of high quality silage targeted towards the animals that require it over the winter housing period can dramatically reduce the concentrate bill in all beef finishing systems. The more moderate quality silage should be targeted for feeding to Suckler cows during the dry period pre-calving. There is no place for average quality silage in a calf to beef system.
The costs associated with suckler systems are generally higher on a per livestock unit basis that in a calf to beef system.
In a calf to beef system finishing steers at 20-24 months, for every animal sold there are two animals carried on the farm amounting to 81kgs of organic N compared to three animals for a similar suckler finishing system when the cow is included.
This equates to 149kgs of organic N per finished animal.
The calf to beef system when compared to an equal suckler finishing system facilitates a higher output of carcase weight per ha produced from lighter animals and dose not bear the cost associated with retaining the suckler cow.
While stocking rate is the main driver of output and profitability on higher stocked farms many medium to lower stocked farms rely on animal productivity, cow reproductive efficiency and weight gain to maximise output and improve profitability.
Concentrates, fertiliser, contractor and veterinary costs are the predominant variable costs on beef farms.
As already mentioned herd health planning, good grassland management, extending the grazing season, producing quality silage and growing enough grass to match stocking rate demand will greatly reduce these costs and return a higher net profit.
The main items in fixed costs include depreciation, machinery running costs, repairs and maintenance, land rental and interest payments. Motor costs, insurance and hired labour are also included.
Fixed costs represent approximately 50pc of total costs on cattle farms and can have a huge impact on overall farm profitability.
The stage of development can significantly influence fixed costs as can the level of dependence on owned machinery.
Higher stocked farms dilute the level of fixed costs per kg of beef produced per ha. Fixed costs are often higher on farms where the farmer has an off-farm job. Investing in facilities for labour saving purposes can be justified
In the case of the part-time farmer. Renting additional land and land rental costs requires careful consideration on many medium to lower stocked farms especially where the gross margin per Ha does not substantially outweigh the rental costs per Ha.
Unlike all the other parameters of profitability that I have already mentioned price per kg is something that is largely outside the farmer’s control.
Efficient farms with a high level of output per ha or per livestock
unit will consistently have higher profits irrespective of farming system.
The more efficient farms will reap the rewards when market value increases and are in a better viable position when the value drops. In general suckler progeny grade better and achieve a higher price per kg.
The purchase price of the calf has a major bearing on the net margin in the calf to beef system.
To maximise farm profitability in a suckling to beef system maximising animal performance is essential. As mentioned earlier cow reproductive efficiency is essential.
So what are the key animal performance indicators that ultimately influence the profitability of a suckler to beef system?
* A calf produced per cow per year;
* Compact calving every 365 days at the corrected time for land type and system;
* Longevity in the herd to reduce replacement costs;
* Ability to wean a calf greater than 50pc of the dams mature weight;
* Produce a quality fast growing animal that will meet market specifications at a young age.
In a calf to beef system the key animal performance indicators are:
* A healthy calf arriving on the farm;
* A fast growing animal with good feed conversion efficiency;
* Potential to meet market specifications at a young age.
Regardless of system, calf to beef or suckling to beef, when the majority of the weight gain comes from grazed grass — and the animal’s potential to grow is maximised — there is little difference in overall farm profitability between systems at current prices.
It’s a matter of choice, which system suits you best.
Where both systems exist on the same farm they can complement one another. Separate housing facilities especially for the calf rearing period may initially increase costs.
The lighter animals can exploit the grazing potential that exists in the shoulders of the year and are a means of increasing farm stocking rate, farm output and overall farm profitability.
Tom Coll is a Teagasc advisor based in Mohill, Co Leitrim