Higher stocking rates deliver higher income

Higher stocking rates delivered higher income on cattle farms last year, despite higher costs, on 306 beef farms (both suckler and non-breeding beef farms) that completed a Teagasc eProfit Monitor.

Their accounts for 2011 and 2012 allow comparison of financial performance across the two years.

Stocking rates increased 6%, from 1.67 to 1.77 livestock units/ha.

That resulted in a 5% increase in the amount of beef liveweight per hectare.

The gross output value per hectare increase was even higher, at 16%, or €183 per hectare.

Variable costs also rose, by 14%, or €86 per hectare. This was mostly due to a 31% rise in the spending on concentrates during the very poor weather conditions of 2012. But fertiliser and veterinary costs also rose, by 6% and 7%, respectively.

Contractor costs dropped by 4% between 2011 and 2012.

As a proportion of gross output, variable costs remained above 50%.

But, with gross output rising faster than variable costs, the gross margin per hectare rose by 18% from 2011 to 2012, or by €97 per hectare.

Fixed costs per hectare also rose, by 5%, or €25 per hectare.

This included higher spending on repairs and maintenance, and machinery running costs (probably partly due to dearer fuel). Interest payments per hectare dropped between 2011 and 2012 by 7%.

The overall outcome on the 306 suckler and non-breeding beef farms that completed a Teagasc eProfit Monitor was a 190% increase in profit excluding premia, rising from €38 to €110 per hectare.

Teagasc has published a booklet summarising the eProfit Monitor results from over 1,000 cattle and 200 sheep farmers for 2012. Advisers say it is very clear across all the beef and sheep enterprises examined that increased profitability in the drystock sector has to come from increasing the kilograms of beef and lamb produced per hectare, while at the same time controlling costs that go todelivering this output.

The figures in the booklet show differences in output between the top and bottom thirds of farmers eProfit Monitor results were huge.


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