Beef Farming in Ireland

Pat Moylan, Teagasc B & T Dairy Adviser, Kilkenny.

Current structure & outlook for beef

• Our largest farming enterprise

• We are over 6 times self sufficient

• Heavily reliant on export markets– Especially the UK

Current structure

• Beef industry is based

on killing cattle from 2

sources

– Dairy farms

– Suckler farms

Current structure

• 8 out of 10 cattle

killed leave Ireland

• Each export market

has different needs– Breeds are important

Current structure

29 %

24%

Beef cow breeds in Ireland

- Breeds

Current structure

32 %

38%

Sire breeds used on beef cows

- Breeds

Current structure

42 %

8%

Sire breeds used on dairy cows

- Breeds

28 %

Current structure

Large number of small herdsLow density

Larger herdsHigher density

- Distribution

Current structure

• 6.5 million cattle in

Ireland

2 million calves

born per year

2009 Amount %

Total Beef Available548,000 tonnes1.6 million head

100

Irish Production514,000 tonnes1.5 million head

94

Imports34,000 tonnes100,000 head

6

Consumption87,000 tonnes250,000 head

16

Exports461,000 tonnes1.35 million head

84

- Beef Output

Current structure

Export Plants 95%

24%

Who processes beef? Who does the processing?

Local Abattoirs 5%

20%

12%

5-7% each

5 Others14%

- Beef Output

Current structure

Export Plants 96%

Beef/Veal25%

Irish people eat 80-90kg of meat p.a.

Pig meat 36%

Poultry33%

Sheepmeat4%

Other meats2%

Steers42%620,000

What do factories process?

Heifers 26%390,000

Cows22%320,000

Young Bulls8% 120,000

Bulls2% 30,000

- Beef Output

Current structureUK grocery market Irish grocery market

31%

17%16%

11%

5%

20%26%

25% 23%

7½%

7%

4%8%

- Markets

Fat S

core

Conformation

Current structure

• Meat Export Plants

• Prices based on the EU

Beef Classification

Scheme– Carcase Weight

– Sex – A B C D E

E U+

U U-

R+

R R-

O+

O O-

P

1

2-

2

2+ 24 18 12 6 18 24 30 36

3 24 18 12 6 12 18 24 30

4- 24 18 12 6 12 18 24 30

4 24 18 12 6 6 6 12 24 30 36

4+ 12 6 0 6 12 12 24 30 36 42

5 0 6 12 18 24 24 36 42 48 54

- Factory Pricing

200

220

240

260

280

300

320

340

360

Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul

Current structure

Factory Bullocks – under 30 monthsR Grade cattle

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Cent

/kg

(Dea

dwei

ght i

nc V

AT

- Factory Pricing

Current structure• 461,000 T €1.4bn

• UK 53% €660 m 47%

• EU 47% €735 m 53%– France 10%– Italy 9%– Holland 9%– Scandinavia 9%

• 3rd country markets 0.4%

- Beef Exports 2009

• 286,000 cattle €157m

• EU – 196,000 68%– Italy 56,000

– Spain 49,000

– Holland 69,000

• UK – 90,000 32%

Current structure - Live Exports 2009

Outlook for Beef

• World demand for beef is increasing– Ireland’s capacity to exploit this is limited

62 million

4.8 m

0.9 m 0.5 m 0.4 m 0.25 m 0.25 m1 m 70 million

50

55

60

65

70

2005 China USA Japan India MENA Mexico Others 2015

Beef

Con

sum

ption

- M

illio

n to

nnes

Outlook for Beef

• Relative strength of £ vs €• Consumers favour lower value cuts

– mince accounts for >50% of retail beef sales in UK• Competition faced by Irish beef in key markets

– 3rd country imports• Live exports out of Ireland• “Global Warming”

Systems of beef production

• The type of system operated depends on…– farm size– soil type– labour– facilities– off farm income

Systems of beef production

Production System (starting with calves) Age at sale

Calf to weanling 7 – 8 months

Calf to yearling 1 year

Calf to store 1.5 to 2 years

Calf to 2 year old beef 2 years

Calf / weanling / store to 30 month old beef 2.5 years

Calf or weanling to bull beef 15 to 20 months

Heifer beef production 1.5 to 2 years

Systems of beef production

• Suckling systems– Calving

• Spring or Autumn

– Selling• Weanlings/Yearlings/Finished

– Positives• “Low” input system

– Negatives• Carrying cost of cow €250/yr• Splitting profit if selling before finished

Systems of beef production

• Finishing systems– Buying

• Forward stores for winter finish• Plainer stores for a grass finish

– Selling• Jan-Mar out of sheds• Jun-Oct off grass

– Positives• Less “work” than sucklers

– Negatives• Large amount of finance required and a very volatile market environment

Systems of beef production

• Niche systems– Bull Beef

• Most efficient

– Veal– Once-calved heifers– Organic

Key Production Indicators1. Production per Cow

– “A calf per cow per year”

• Fertility of both cow and bull

• Calving spread (compact calving season)

• Calf mortality

Key Production Indicators

2. Performance per head– Liveweight per head

• Liveweight gain at grass– Number of days at grass– Grassland Management

• Liveweight gain indoors– Grass Silage quality – DMD%

• Level of meal feeding and duration of finishing• Animal health

Key Production Indicators

3. Stocking rate– Livestock units per hectare

or kgs Liveweight per hectare

– Depends on:• Land type, grassland mgt,

Housing, Labour availability

If you had an average of 30 suckler cows, 28 calves for 9 months of the year, 1 bull and 5 in calf heifers on 24 ha: 30 x 1LU = 3028 x 0.3LU X 0.75 = 6.31 x 1LU = 15 x 0.6LU = 3Total = 40.3 LUStocking rate = 1.68 LU

Key Production Indicators• What does a Teagasc advisor take from a

farmer’s eProfit Monitor results?1. Output of beef liveweight per livestock unit

• In kilograms

2. Stocking rate• In Livestock Units per hectare

4. Variable Costs per kg• Target is less than 75c per kg• Best ePM farmers are at 77-82c per kg

3. Output of beef liveweight per hectare combination of 1 & 2

Costs & returns for cattle farmers

• Teagasc Profit Monitor 2009– 258 suckler farmers

– Complete Cost control planner/Input sheet

– Local beef advisory input

– Average suckler farmer making less from “farming” in recent year

Profit on ePM suckler farms

Without Premia

With Premia

-€200

-€100

€-

€100

€200

€300

€400

€500

€600

€700

2004 2005 2006 2007 2008 2009

Prof

it/Lo

ss p

er h

ecta

re

Costs & returns for cattle farmers• Teagasc Profit Monitor 2009

Average Suckler Top 10% Suckler Average Non-breeding

Stocking rate & farm size 1.73 LU/ha on 57 ha 2.07 LU/ha on 67 ha 1.53 on 52

Number of cows 47 67

Output in kgs LWT / ha 521 kg 760 kg 570 kg

Gross Output / ha € 849 €1349 €937

Variable costs / ha € 536 € 591 € 633

Fixed Costs / ha € 485 € 573 € 493

Net Profit excl Premia / ha € - 172 € 186 € - 189

Total Premia / ha € 643 € 725 € 720

Costs & returns for cattle farmers

• eProfit Monitor 2009 – Suckler farms Variable Costs

Purchased Feed

FertiliserContractor

Vet & AI

OtherPurchased Feed

Fertiliser

Contractor

Vet and AI

Other

€9200

€6500

€5300

€4400

€4100

breakdown on a 55 ha farm

Total €29500

Costs & returns for cattle farmers

• eProfit Monitor 2009 – Non-breeding farms Var. Costs

Purchased Feed

Fertiliser

Contractor

VetOther

Purchased Feed

Fertiliser

Contractor

Vet and AI

Other

€17100

€ 5900

€ 5600

€ 2500

€ 3700

breakdown on a 55 ha farm

Total €34800

Costs & returns for cattle farmers

• eProfit Monitor 2009 – Suckler farms Fixed Costs

Depreciation

Motor, Labour, Insurance, Machinery

LeasesMachinery Running

Land Rental

OtherDepreciation

Motor, Labour, etc

Mach. Running

Land Rental

Other

€6100

€6200

€3800

€2700

€7900

breakdown on a 55 ha farm

Total €26700

Repairs

Interest