Compare Costs to Profit
TAKING AWAY subsidies and reverting to how farms should be managed is the best thing that could have happened to the beef industry, reckon Andy and Nicola Foot of Bookham Farm, Alton Pancras, Dorchester.
Having switched from dairying to suckler cows in 1997, the couple are no strangers to change. As a fourth generation producer, Mr Foot”s ambition is to secure a profitable business future for his 12-year-old son.
business assessment
But to do that, every aspect of the business must be assessed to give a clear picture of the strengths and weaknesses as well as help plan for the future. “Now with the Red Meat Industry Forum offering benchmarking services to producers, we have the ability to compare our efficiency with others.”
The 283ha (700-acre) farm carries 165 Continental and native cross suckler cows put to Charolais bulls. Most offspring are sold as heavy stores at 20-25 months old through Yeovil market.
“Although we have the capacity to finish all cattle on the farm, we earn more selling them as stores to buyers who take them north for a higher finishing price,” adds Mr Foot.
After a meeting with an RMIF fieldsman, setting up the benchmarking system has been relatively easy. “The farm”s accounts are computer based, so transferring relevant information was simple.”
But he had no idea what his production costs were. The first area to shock him was the heavy reliance on subsidies. “A total of 278 a cow equates to 54% of total output being derived from subsidies.” To remain profitable without subsidies will mean tighter production efficiencies, he says.
Improving calf mortality, which runs at 5.8%, is first on the list, as it is much higher than the top 25% of producers, who run at 3%, and the top 1%, with a mortality of just 1.2%. “This will come from better choice of genetics in the herd and a more efficient calving pattern.” Cows were traditionally calving in February and March, the shift now will be to calve later into May, he says.
better genetics
Two Charolais bulls are used on the herd, one with average estimated breeding values and the other without. Mr Foot is now looking for a bull with superior genetics and EBVs to improve quality of calves sold as well as replacements.
On the female side, cows must be selected with good maternal attributes. “The herd will remain crossbred to take advantage of hybrid vigour as well as maintain a milky cow to give calves the best start possible.” And for the first time, he is planning to creep feed calves on cracked maize.
Mr Foot also sees liveweight produced a cow as an area for improvement. “We sit in the top 30% for this, but have some room for improvement, as the top 1% are hitting 387kg.”
Subsidies have meant keeping cattle long enough to take advantage of two subsidy claims. “The aim now is to provide weight gain in the quickest possible time and as cheaply as possible.” It is hoped all stores will be off the farm between 18 and 20 months of age.
Benchmarking has, however, proved the Foot family is succeeding in keeping variable costs to a minimum. Running at 35.60 a cow, it is ranked in the top 8% and in the top 20% for overheads at 170.50/cow.
“We have always concentrated on reducing labour and machinery where possible, but to boost profit without subsidies, core production methods will have to be assessed.”
Mr Foot says the next step is for more farms to start benchmarking and after that for local discussion groups to be formed based on each other”s findings. “Once confidence has grown, groups of like-minded producers will follow.”