The Spring Beef Dilemma

IRELAND - Having discussed the beef business with beef farmers last week at the Ploughing Championships, it is clear they are much more cautious about buying stores and, indeed, more pessimistic on the prospects of making any money from winter finishing.
calendar icon 2 October 2007
clock icon 2 minute read
The pessimism stems from the bad experience of last spring coupled with the huge increase in meal price.

This time last year, beef prices increased rather than the normal seasonal decline and this generated over-optimism for the spring.

The present beef price is holding up well and is practically the same as this time last year, but there is now a fear the same pattern will be repeated.

No two years are exactly the same: there are always some unknown factors to influence price -- but if fewer cattle are finished that will help to strengthen prices.

Still, being better than last year is no great consolation when the meal price has risen about €100 per tonne.

Spring price

Against that, store and weanling prices are down by €60 to €120, so the thing that is needed to improve profitability is a better spring beef price, as weanling producers cannot take lower prices.

We have a rough guideline that you need a price rise of 15 -20pc between autumn and spring to make a modest margin in winter finishing.

At the current price of 286c/kg for R grade carcasses, the spring price needs to be in the region of 330c/kg for this to be achieved.

This is because we have such a large difference in production cost between beef produced largely off grass in the autumn and that produced in the spring from more expensive diets of conserved forage and concentrates.

Source: Irish Independent
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