Steer winter finishers will require up to €5.80/kg as a breakeven selling price, according to estimates contained in Teagasc’s recently published beef budgets for 2023/2024.
The state agency has based its costings on €350/t for concentrates, despite many products remaining north of €400/t, silage at €45/t (well preserved, 20% DM, 72% DMD), dosing and other health costs at €8/head, transport, and marketing at €42/head and half the interest cost on feed and animals borrowed at 7% with 0% mortality assumed.
The state agency, in its budget, noted that this is a “high-risk system that is sensitive to buying and selling price and performance achieved”.
It suggests that utilising ad-lib meals over the last 80 days could be an option for finishers in a year with lower meal costs.
The selling price required only covers variable and fixed costs and does not include a margin.
It looks at the effect of prices – lower store prices this autumn, assumed store prices and higher store prices this autumn, on the breakeven price required.
The highest break-even selling price that appears in the budget is €5.94/kg, an estimate based on factoring in higher store prices this autumn 2023.
About the beef budgets:
Every autumn, the state agency produces and releases a set of financial budgets, which it outlines are “a guide to beef farmers who are buying cattle for finishing over the following 18 months”.
It added that purchase prices are based on the prevailing market value at the time for both weanlings and store cattle, while inputs required for finishing are also set at “current market values”.
Each budget calculates a breakeven selling price (cents/kg carcase weight) for that particular system and takes account of the purchase price and all the associated variable and fixed costs incurred.
It calculates the selling price required including a margin on finishing as:
Margin required / Carcass weight + breakeven price required = selling price required.
Any proposed margin per head will be additional to the breakeven price, it added.
It is important to remember that these budgets only serve as a guide to beef farmers.
In a previous news article on www.thatsfarming.com, we took a look at Teagasc’s guideline breakeven prices for heifer winter finishers.
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