07/04/06
Careful planning of grass beef finishing regimes will be particularly
vital this summer if English producers are to make the most of
their market opportunities while minimising risks ahead of the
full resumption of beef exports, according to break-even budgets
prepared by the English Beef and Lamb Executive (EBLEX) from
2005 performance records.
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)
Liveweight gain (kg/day) |
0.7* |
0.9 |
Weight at turnout/purchase (kg) |
350 |
350 |
Target slaughter weight (kg) |
560 |
560 |
Time to slaughter (days) |
300 |
233 |
Carcase weight (kg) |
325 |
325 |
|
|
|
Purchase/start cost (£/head) |
440 |
440 |
Variable cost (£/day) |
0.25 |
0.30 |
Fixed cost (£/day) |
0.55 |
0.55 |
Total cost (£/head) |
680 |
638 |
|
|
|
Break-even sale price (p/kg
deadweight) |
2.09 |
1.96 |
* 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
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