“Average direct costs per cow are forecast to increase from €630 in 2020 to €932 in 2022, an increase of 48% in two years.”
That was one of the main messages Teagasc conveyed to attendees at its Beef 2022 open day – where supporting sustainable beef farming was the central theme – yesterday (Tuesday, July 5th, 2022).
The state agency told attendees that single suckling enterprises are the predominant cattle enterprise in Ireland, operated on over 31,000 farms.
The NFS – National Farm Survey – includes herds of greater than ten non-dairy cows.
In most years, the total costs per cow exceeded the total output per cow, figures presented on the day show.
The total output mainly consists of weanling and store cattle sales with the inclusion of coupled payments such as the Beef Environmental Efficiency Programme (BEEP-S) and the Beef Data Genomics Programme (BDGP).
Total costs include direct costs to the enterprise and a proportion of overhead costs to the farm.
Teagasc bases the method for allocating overhead costs on the share of farm output attributed to the various enterprises on-farm.
Teagasc figures show that farmers in this enterprise kept direct costs “relatively stable” from 2012 to 2020. However, there were “some difficulties” in 2013 and 2018 due to fodder crisis.
However, as farmers were told, costs have “risen dramatically” in 2022.
These direct costs include:
- Concentrate feed;
- Fertiliser;
- Contractor costs;
- Veterinary costs.
Overhead costs have increased to a lesser extent in 2021 and 2022, Teagasc explained.
All in all, Teagasc predicts that the average gross margin for single suckling enterprises will be lower this year, relative to last year, despite rising weanling prices.
Output
On the output side, there have been “steady” improvements since 2018. Teagasc cited “rising” mart prices for weanlings and store cattle and the BEEP-S.
Based on results from the Teagasc NFS survey, the average gross output per cow is 26% higher in 2020 relative to 2012.
It forecasts a 16% increase for 2022, albeit with “significant” uncertainty around mart prices in the second half of the year.
For individual farm businesses, it highlighted that the timing of cattle marketing would be “particularly” important in 2022.
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