In this article, ICSA beef chair, Edmund Graham, explains why his organisation believes winter finishing is finished.
Winter finishing is finished as factories cut beef prices weekly. We can forget about finishing cattle at two years of age out of a shed.
In fact, the economics of any winter finishing system do not stack up as prices have fallen nearly €1.00/kg since June 2022.
This week, factories are quoting as low as €4.55/kg, which is totally unsustainable considering current escalating costs.
ICSA has engaged with Teagasc about feeding costs. Some of our producers are calculating daily feed costs (including all fixed and variable costs) of up to €9/day.
Teagasc has a sum of €6/day, but that includes a period of low-cost grazing in the autumn. Typically, we might aspire to a carcase weight gain of 0.6kg/day.
At a price of €4.55/kg plus a QAS bonus of 20c/kg, a typical R3 steer will fetch €4.75/kg. This works out at €2.85/day, which makes intense winter finishing utterly insane.
Figures do not stack up
ICSA is strongly urging winter finishers to do their sums now and to inform their factories that they are not feeding cattle this winter to finish in the springtime because the figures do not stack up.
It will make a lot more sense to let cattle thrive more slowly and finish them off grass next summer.
It is beyond belief that beef is still being off-loaded in supermarkets at the exact same prices that consumers were paying three years ago. This is not economically sustainable.
Farmers are being lectured continuously about what consumers want but supermarkets cannot expect that this can be delivered at a loss by farmers.
If consumers want more sustainable beef, retailers need to explain to consumers this comes at a cost.
Teagasc’s beef budget
Last week, That’s Farming featured a news article on Teagasc’s beef budget for farmers operating winter finishing steer systems.
The state agency outlined how these finishers could need up to €5.98/kg to breakeven in spring 2023.
However, with rising feed, particuarly meal costs, some may argue that this falls short of what they need to pocket to breakeven.
Read more on this news article.