photo courtesy of www.jennifermackenzie.co.uk

These budgets underline the difficulty many producers encountered in making a margin to cover their full production costs at last year’s prices. In so doing, they sound a clear warning for store cattle purchasers this spring. Especially so since the gradual resumption of beef exports anticipated following the lifting of export restrictions from British beef is likely to mean domestic consumption will continue to be the main market driver for the vast majority of cattle finished this season.

At the typical 0.7 kg daily liveweight gains achieved and costs incurred by extensive cattle finishers last summer, EBLEX break-even budgeting reveals a price of nearly £2.10/kg deadweight would have been required to break-even on the £440/head average 2005 yearling continental steer purchase cost. This contrasts with the £1.96/kg break-even price for those increasing gains to 0.9kg/day through better summer feeding. 

Break-even Budgeting for Summer Finishing (Based on 2004/05 Costings Performance)

     *  Average 2004/05 performance for extensive finishers

In the light of these figures, EBLEX advises summer finishers to base their spring store purchasing on simple break-even budgets for their planned finishing regimes using realistic estimates of variable and fixed costs as well as likely finished prices.

While faster finishing will pay clear dividends in minimising costs and risks again this season, EBLEX suggests maintaining as much flexibility as possible in summer finishing to take advantage of any firming of prices resulting from the growing export demand. Practical advice and tips for producers are available in the form of the latest Beef Action for Profit resource guidelines available at www.eblex.org.uk

UK Beef Exports start date confirmed
Carcase Quality Figures Show Improvement Potential
No Dragons For Saint George!
Getting North West English Beef Abroad