Cost of Beef

Walterp said:

We've concentrated on breeding quieter ones; earlier today my son cut out a Limousin bull calf (which has a touch of NFE and a snuffle) from a management group that was got in from grazing, put the calf through the handling system, treated it with Orbenin and Hexasol, put it into a pen with other calves, then cut out the dam from the group, put her in the same pen - all on his own.

Years ago, that would've been a major operation involving; now, a youngster can do it safely on his own. I'd like to pretend that the improvement is down to better breeding, but it's just down to management and infrastructure.

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Having seen the pics of your new setup. I am rather jealous - its a little better than the rusty gates, tyres filled with concrete with an RSJ sticking out, pallets and baler string setup that I currently enjoy!

Thick Farmer said:

Having seen the pics of your new setup. I am rather jealous - its a little better than the rusty gates, tyres filled with concrete with an RSJ sticking out, pallets and baler string setup that I currently enjoy!

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+1

Thick Farmer said:

Having seen the pics of your new setup. I am rather jealous - its a little better than the rusty gates, tyres filled with concrete with an RSJ sticking out, pallets and baler string setup that I currently enjoy!

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Ah, but I remember seeing wild Limousins going thru' a pen made up of rusty gates tied together with string, into an old tubular crush with no bottom panels (they'd regularly kick out through the bars) and then into a bucking, bellowing and leaping mass of cattle trying to escape over the nearest six foot wall.

I'm not sure the highest a Limousin can jump, but my neighbour reckoned one of his scrambled over a seven foot block wall.

nacnud said:

I know it's easy to wax lyrical about other countries systems when you come home, but what I saw in New Zealand that the dominant beef breed, by far, was the Angus.

Why? Not because they look nice and they are the fashionable breed at the time, but because they suited the terrain and they had a ready market for them not too far away in Asia.

What are our main export markets? Europe? What do they want? Our native breed's beef? Or their own continental breeds which could cost more to produce here than they do in their country of origin.

A lot of upland units here are using breeds like Charolais and Simmental, at what cost? With summers invariably getting wetter, good silage is getting harder and more expensive to make.

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Found this interesting article about a guy in USA who produces sucklers using rotational grazing and is similar in system to that if NZ.
http://www.homesteadingtoday.com/li...-any-ideas-converting-rotational-grazing.html

Now before you start wading through the 100 odd pages(!) selectively read Agmantoo posts only up to about 20 pages he shows pics of his cattle and has a similar climate to us here dealing with snow and drought etc. he is not conventional in his method but has some impressive results and cattle. Not an answer for everyone here but thought provoking stuff which demonstrates a profitable system of raising beef cattle

main_man said:

Found this interesting article about a guy in USA who produces sucklers using rotational grazing and is similar in system to that if NZ.
http://www.homesteadingtoday.com/li...-any-ideas-converting-rotational-grazing.html

Now before you start wading through the 100 odd pages(!) selectively read Agmantoo posts only up to about 20 pages he shows pics of his cattle and has a similar climate to us here dealing with snow and drought etc. he is not conventional in his method but has some impressive results and cattle. Not an answer for everyone here but thought provoking stuff which demonstrates a profitable system of raising beef cattle

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Need to get agmantoo on here!

Steakeater said:

Need to get agmantoo on here!

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Yeah I'm sure he would add some interesting points to the debate! Essentially he is running 100 cattle plus calves on 160 acres with 16 days worth of hay stored for emergency use. Obv it has taken time plus trial and error to get to the point he is at but the thing I note is he sees himself as a grass/forage producer (places importance of managing forage) with the beef cattle as a by product of the forage!

I run 180 sucklers through to beef. I have about 15 grazing groupes at any time. It takes around 4 hours a day for 1 man to check everything and do any moves which i see as only the same amount of time per day that a dairy man spends in his parlour. I RG all my stock when i can its not always easy but def well worth the hasel. I am a stock farmer and making sure the stock are correct is my priority. If i can add 0.1kg per day to my calves and yearlings and improve fertility of the cows i can more than pay for the workman. As you say the biggest asset is me so why sit on a tractor when I can pay someone. Spreading slurry does not need to be done by the boss, but herd fertility does........ I think this has got away from the OP which my view is being the top beef price in the world can't last so beef profit needs to come from on farm efficiencies....

Steakeater said:

We used to keep our stores in one big group of a hundred all the time with no issues. I suggest a change in breeds is required @Walterp to something more docile!

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Our experience is that large groups (50- 90) of steers is fine, but put more than 30-40 females together= total lunatics! This is same breeding (all native) same management.

It is the equivalent of teenage girls at a Beatles/Bros/Take That/One Direction concert

a.birt said:

I think this has got away from the OP which my view is being the top beef price in the world can't last so beef profit needs to come from on farm efficiencies....

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I've been thinking about this, and I'd hesitate to agree. These are my reasons:

1. Quality beef (as opposed to commodity beef, or beef from extreme breeds) is expensive to produce, and the demand for it is increasing - to my surprise - because Big Retail need to compete on quality as well as price, thence putting upward pressure on its price.

2. This factor will increase, not decrease, in importance as costs like land and fuel to produce those cattle continue their long term relative appreciation. Try going out and either buying (or,even, renting) more land to increase supply, and you'll quickly see what I mean.

3. Meanwhile, although EU demand is falling the supply of EU beef is falling even faster, so that it's a 'demand-pull' price increase. Even then, profits are still marginal, if they exist at all - the Cowx's in thus week's FG say publicly that their 100 head mostly pedigree beef herd isn't profitable enough, so the supply/demand balance remains in favour of prices going up further.

4. The UK exports 20% of its production. If Sterling stays weak (which is the aim of our central bank) those exports will increase, requiring supply to fill those orders.

5. Beef production is a long term cycle, so that the decline in UK beef herds (even if it has bottomed out, which I don't think it has) means that this trend is already 'set' for the medium term - if the price drops now, nearly everyone in the UK will sell up their beef herds. Bit drastic, but I suspect that the very lean period that most beef farmers went through from 1995 - 2008 means that most of the survivors are determined never to repeat that experience.

I can categorically assure you (and any beef buyers reading this) that if beef R4L falls, my family's herd will be killed out forthwith, because our patience would then be exhausted.

6. Last, but not least, although the UK beef industry is becoming desperate to solve the TB epidemic in cattle, the signs are that it'll get worse, not better, which further constrains a quality beef supply increase. Would you start up in a TB area? No, of course you wouldn't. So it has a restraining influence on supply in Western grassland areas otherwise ideally suited for cattle-raising that is, I suggest, far beyond the annual compulsory slaughter numbers.

Short answer: we may have the highest beef price in the World, but we also have the highest costs of production, too. Asking if we can squeeze costs ever-further is the wrong question; the correct question is 'look, it costs this much to produce these cattle, do you want 'em?'

If you doubt my analysis, go look at the mess most of the UK dairy industry has gotten itself into through thinking it's about costs - a typical price-taker's attitude that does no-one except Tesco any favours.


[Walterp pushes his chair back, scowls and walks off, muttering darkly to himself: "Farmers are afraid to say what they need to produce something, then wonder why they're price takers..."]

Walter if we are getting the highest prices in the world currently, how can we expect it to go higher? Surely we compete on a world market?
British beef production may decline, as our costs are currently too high compared to finished price, but is the small amount of reduced supply here going to make a difference to world prices? Or home prices?
Plenty will argue there is plenty of quality beef available from South America, though we can of course argue about welfare standards etc.
I suspect we have to get out, cut our costs or work on adding value/ niche markets. The latter is only an option to a limited number of people imo.

I've said before exchange rates may work in our favour, overriding some of the above, but they can work the other way too.

@Walterp why not say beef costs 'this' much to produce, pay us 'this' much for it and then reduce your costs to make a bigger margin?

I think you have a fair point Walt, with what can only be a continued pressure on costs vs returns as the costs of inputs rise on a global scale. It takes a fundamental change of approach and attitude and I agree with saying this is how much it costs to produce and this is how much it is worth. So it kinda begs the question why are producing larger cattle which require high (costly) inputs which are squeezing margins to the point of not being profitable?? If it's because that's what the supermarkets say they want them they have to pay a price which reflects the cost of production , which I can't see happening if anything it goes the other way. Which is where I think poorbuthappy is also right it's about reducing costs and adding value and as I see it that's a return to cattle breeds which are smaller framed and can finish on forage without needing pumping with grains to finish. Exploiting a niche market is easier said than done but I don't see that economies of scale stack up.

Gulli said:

@Walterp why not say beef costs 'this' much to produce, pay us 'this' much for it and then reduce your costs to make a bigger margin?

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In a period of rising inflation, there's no such thing as 'reducing your costs'. They are, and will continue, to go up.

Next question.

Poorbuthappy said:

Walter if we are getting the highest prices in the world currently, how can we expect it to go higher? Surely we compete on a world market?
British beef production may decline, as our costs are currently too high compared to finished price, but is the small amount of reduced supply here going to make a difference to world prices? Or home prices?
Plenty will argue there is plenty of quality beef available from South America, though we can of course argue about welfare standards etc.
I suspect we have to get out, cut our costs or work on adding value/ niche markets. The latter is only an option to a limited number of people imo.

I've said before exchange rates may work in our favour, overriding some of the above, but they can work the other way too.

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Prices will continue to rise, as will costs, because inflation is thought preferable to deflation - to that extent, the whole thing is an illusion: you merely think you're getting more money for your cattle...then your bills remind you that, actually, you're not.

EU domestic markets are tariff-protected from World markets, but two things have changed in our favour: firstly there are more potential customers out there, and secondly more pampas is - and will continue to be - put under the plough in the longest 'up corn/down horn' cycle the World has ever seen.

I'd be confident that UK beef farmers have, and will continue to have, a ready market for quality cattle for the medium term. Personally, I'd worry more about producing to spec than trying vainly to cut costs in an era of rising costs - I think 45% of cattle are still out of spec?

I have just weaned 50 claves today, shed the off in handling pens the walked them very sensibly around farm steading and into there winter housing with no fuss what so ever, when I used to keep 3/4 lims this was a nightmare of a job they would end up all over the farm, thank god I changed to angus bulls.

Walterp said:

Prices will continue to rise, as will costs, because inflation is thought preferable to deflation - to that extent, the whole thing is an illusion: you merely think you're getting more money for your cattle...then your bills remind you that, actually, you're not.

EU domestic markets are tariff-protected from World markets, but two things have changed in our favour: firstly there are more potential customers out there, and secondly more pampas is - and will continue to be - put under the plough in the longest 'up corn/down horn' cycle the World has ever seen.

I'd be confident that UK beef farmers have, and will continue to have, a ready market for quality cattle for the medium term. Personally, I'd worry more about producing to spec than trying vainly to cut costs in an era of rising costs - I think 45% of cattle are still out of spec?

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What does "out of spec" really mean in practice and isn't that part of the problem?

Hilly said:

I have just weaned 50 claves today, shed the off in handling pens the walked them very sensibly around farm steading and into there winter housing with no fuss what so ever, when I used to keep 3/4 lims this was a nightmare of a job they would end up all over the farm, thank god I changed to angus bulls.

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Sleep well tonight , ear plugs on order

D

Penmoel said:

Sleep well tonight , ear plugs on order

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Did 50 on sunday, thank the lord for a farm house with a bit of distance from the steading and double glazing

Hilly said:

I have just weaned 50 claves today, shed the off in handling pens the walked them very sensibly around farm steading and into there winter housing with no fuss what so ever, when I used to keep 3/4 lims this was a nightmare of a job they would end up all over the farm, thank god I changed to angus bulls.

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How much lighter do you reckon the angus calves are though compared to lims? What is your dam's?