Teagasc Analysis Shows Good Potential for Efficient Beef Farming
29 September 2004
The country’s best run beef farms made a profit of over €900/hectare (€360/acre) in 2003, according to analysis published by Teagasc.
The results, based on analysis of profitability on almost 200 beef farms using the Teagasc eProfit Monitor, show that profits on suckling farms averaged €560/hectare (€224/acre) while profits on non-suckling farms averaged €490/hectare (€196/acre). According to Bernard Smyth, Teagasc Chief Drystock Adviser, the sample of almost 200 farms would be representative of the top 25% of beef farms in the country.
Speaking at the publication of the results at the National Ploughing Championships in Carlow, Bernard Smyth said the highest performing farms, with profits exceeding €900/hectare, represented just 7.5% of those in the survey.
“These farms have adopted the best blueprints on breeding, feeding and animal management. They are producing more beef per hectare and are fully exploiting the benefits of grazed grass. They are also producing a product which is ideally suited to the highest priced consumer markets,” he said.
While the farms involved in the survey are representative of the most progressive beef farmers in the country, there were big variations in profitability in 2003. For example, profitability on the top one-third of suckling farms, at €800/hectare (€320/acre), was almost two and a half times higher than that of the bottom one-third. On non-suckling farms, profitability of the top one third averaged €620/hectare (€248/acre) and was double that of the bottom one-third.
Bernard Smyth said a key barometer of income was the proportion of EU premia held by farmers as profit.
“Our results show that the top one-third of suckling farms held 104% of their premia as profit. In other words, they made a positive income from actual farming. In contrast, just over 40% of premia payments were retained as profit on the bottom one-third of suckler farms. The balance was used to cover costs of production.”
“On non-suckling farms, the proportion of premia retained as profit was much lower. The top one-third of farms held 84% of their total premia payments as income compared to just 28% for the bottom one-third.”
“In the new scenario where EU payments are completely decoupled from production, the lower performing farms must increase their production efficiency if they are to remain in beef. A price rise alone will not be enough to deliver a reasonable income after January 2005,” said Bernard Smyth.
In relation to sheep farming, the Teagasc analysis shows that while total premia payments were less than 50% of those on beef farms, income on the top performing sheep farms was almost 90% of the top performing beef farms.
Average income on a sample of sheep farms involved in the Teagasc advisory programme was €400/hectare (€160/acre) in 2003 while the top one-third of producers had an income of over €680/hectare (€272/acre). In contrast to beef production, the leading sheep farmers made double their premia payments as income.
The “eProfit Monitor Analysis 2003” publication can be found here.
