Earlier sale of finishing beef cattle, selling poor-performing high-value animals and focusing on costs are the three main measures Teagasc has urged finishers to consider to mitigate production cost rises this year.
At its Beef 2022 open day earlier this week, the state agency advised farmers that there are many options they can take on board and that “doing nothing is not an option”.
It says that the first and most important step for any farmer is to get an understanding of the impact of the cost changes on the farming operation, and from there, they can take necessary decisions to reduce exposure to increased costs.
- Cost focus
The state agency points to a “dramatic” increase in production costs, with the sale price increase “not counteracting” the increase in costs.
It says the increases require a “clear” focus on cost control.
In the analysis, it has assumed the same level of inputs; however, in practice, the impact of these price increases will have been to reduce inputs and, in particular, fertiliser use on beef farms.
Ideally, this would be facilitated by soil testing and particularly addressing soil pH levels where required. Concurrently, you can use soil test results to facilitate a more targeted application of inorganic fertilisers, with the objective being to reduce fertiliser application levels.
You can further reduce the application of fertilisers by grass budgeting and matching application rates to grass and grass silage availability and demand.
Using cheaper forms of fertiliser (switching from CAN to protected-urea to meet nitrogen fertiliser requirements) can also lead to significant savings, Teagasc says.
Grass quality and use
Key to ensuring you reduce costs in 2022 on beef farms, Teagasc says, is increasing grazing ‘pressure’ to increase grass quality and utilisation while at the same time increasing performance from high-quality grass, thus reducing purchased feed requirements.
Long-term, build your strategy around ensuring soil fertility is optimised, as well as incorporating clover into the swards. By consulting with agri-input merchants and processors, you “may get a better picture of where costs and beef prices are likely to go”, the state agency says.
Along with your adviser, complete a partial budget before making any decisions. This will help you to examine costs against potential outputs.
2) Selling poor-performing, high-value animals
With current cull cow carcass prices at “unprecedented” levels, Teagasc urges farmers to identify high-value but low-performing suckler cows and remove them from the herd.
It says this is “little justification” for retaining cows that are not in-calf post-weaning. Furthermore, you should earmark cows with functionality issues, docility problems or weaning light calves for culling.
A further consideration for many farmers will be the genetic merit of their herd and, in particular older cows.
A Teagasc spokesperson said: “Cows that have lower genetic merit are likely to carry inferior genes for suckling systems.”
“This can also be a factor included in culling decisions. You could potentially replace these animals with heifers of higher genetic merit that will calf at two years of age.”
“The advantage here is that there is a reduction in feed demand as younger/smaller animals will require less feed. The animals that they are replacing currently have a very high economic sale value.”
3) Earlier sale of finishing cattle
To reduce the demand for winter feed and reduce the level of exposure to price volatility and increased feed costs, Teagasc advises farmers to “explore the opportunity to select a proportion of the animals due to finish at 24 months for earlier slaughter” (e.g. at 19-20 months).
It states that the criteria to identify suitable cattle for earlier ‘finishing’ should be animals’ live weight and ‘condition’ (fatness).
A spokesperson said:
“Farmers need to assess if ‘forward’ stores, particularly heifers, are beginning to build fat ‘cover’.”
“Farmers can make a decision to feed these cattle that are ‘building up’ fat deposits with extra concentrate for a short finishing period, either at grass or in the shed and slaughter at a younger age.”
Furthermore, it says farmers need to assess live weight before deciding on feeding cattle to finish and, therefore, should weigh all forward stores now.
The advantage of finishing these animals before the ‘second’ winter, Teagasc says, includes reduced requirements for silage and expensive concentrate and having a “clearer picture” of factory prices.
The spokesperson concluded:
“On a heifer or steer system, finishing off grass as opposed to out of the shed will reduce feed costs by €1.20-€1.50/hd/day.”
“It could be expected that carcass weight will reduce as a result of this earlier finish; however, the objective is to reduce costs to a greater extent than any reduction in carcass value,” the spokesperson concluded.