Teagasc warns of tight beef profits
Bernard Smyth, beef adviser with Teagasc, said a 500kg continental steer costing 800 today will need to be to be sold at 250c/kg (90p/lb) carcass weight next spring in order to have a profit of 70.
“Farmers who are paying up to 850 at present for these animals will be operating on a financial tightrope,” he said.
Mr Smyth said that lower quality silage on many beef farms this winter will add to feeding costs, putting additional pressure on margins.
Mr Smyth also said that given current beef prices and expectations for beef markets over the next 12-18 months, young stock are currently over-priced in the marts.
“Based on Teagasc guidelines, male weanlings are currently worth 2/kg, but are making upwards of 2.20/kg in the marts. Weanling heifers are worth 1.40/kg compared to current market prices of 1.50/kg or more.
“Eighteen-month-old steers are currently making at least 1.60/kg in the marts compared to a Teagasc guideline price of 1.50/kg. This is not to suggest that farmers who are selling these animals are making big margins.
“It merely highlights that overall margins in beef production are tight and emphasises the importance of high animal performance, tight budgeting, low fixed costs and utilising all available EU premium payments,” he said.
Mr Smyth said current strong prices for weanlings and stores may well be influenced by farmers seeking to build up maximum premium payments in 2002 following the publication of the EU mid-term review proposals.
