UK beef efficiency increasing despite costs

UK beef enterprises are becoming more efficient, despite rising costs and last year's foot and mouth outbreak, according to the 2007/08 edition of Eblex Business Pointers.

Nearly all livestock enterprises returned a negative net margin figure for the year ended March 31, 2008, but for most farms, that figure was an improvement on previous years by as much as GBP109 per cow. Improvements are also being made in key performance areas such as calving periods.

According to Eblex, economics manager Mark Topliff, this year's figures show a definite widening between top and bottom third producers when comparing gross margins and net margins excluding non cash costs.

"Being in the top or bottom third of producers in the main comes down to one thing – being able to manage fixed costs. In many instances this is because top third farmers are looking at ways of spreading costs such as labour and machinery over other areas of the enterprise, or they are being more efficient with inputs."

However, intensive beef finishers' performance has worsened since 2005 /06, with the average producer now recording a loss of GBP127.17 per animal. This is mainly as a result of high feed prices and increased fixed costs.

Beef producers are also making significant progress in key technical performance areas.

For beef enterprises, the daily live weight gain for average lowland and LFA suckler producers has improved from 1.06 kilogramme and 1.04 kilogrammes in 2005/06 to 1.08 kg and 1.07kg respectively in 2007/08. LFA suckler herds also improved their calving period from 22 weeks to 16.1 weeks over the same period.

Eblex chief executive Richard Lowe said that these figures show a sector responding positively to the challenges posed by the market, global commodity increases and disease outbreaks. Producers are clearly heeding the call to improve production efficiency, and more enterprises are now taking a hard look at how they can tackle their costs.

US$1 = GBP0.671 (Nov 24)