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Tillage profitability V Beef finishing

  • 29-01-2022 8:19pm
    Registered Users Posts: 149 ✭✭ wicklow_hunter

    Hi All,

    First time posting here so try not go to hard on me 🙈 my old man is giving up farming soon ( so he says anyway) and I’m looking into changing things around. He Currently finishing 80 aax mix of bulls and heifers and doing 20-30 acres of tillage (Spring Barley) for feed. Currently buy yearlings and Finnish em over the winter months

    Thinking of getting out of stock and focus on tillage. I work full time and have spent a considerable time on my own career in Engineering getting to where I am now. I’m pulling 70k out of where im working

    The issues with the current set up is the farm is doing let’s say on average 40k a year b4 tax ( over half that is coming from subsidy’s etc 25k to be exact.

    The farm is relatively small in today’s terms 100 acres approx

    My father is verry stuck in his ways and does the same thing year in year out. Irrespective if he is making or loosing money. He just doesn’t do Change which leads to endless arguments.

    We do all the existing spring barley with existing machinery with the exception of sowing (Contractor does that)

    what could I expect to make per acre on an average year (ignoring price fluctuations on inputs and SFP)? let’s say on an average price of € 150 tonne) No payments on existing machinery - nothing fancy here . Teagasc have some guidelines on profitability but it’s a bit over the top🤔

    The rationale behind the switch in farming practices is to keep current off farm job and work for say 1- 2 months of the year at tillage. Keeping stock is just too labour intensive to manage with a full time job. I just don’t have the gra for it anymore after sustained an injury a few years back and still not right.

    Any help or guidance is greatly appreciated 👍


  • Registered Users Posts: 4,897 ✭✭✭ bogman_bass

    If your dad is pulling in 15K on top of subs he must be doing something right!!

    The question I would have if you go down the pillage route is how would you handle spraying? Could you drop things at short notice to spend a day spraying Iif the weather suddenly came right for it.

  • Registered Users Posts: 2,360 ✭✭✭ Jjameson

    You have a pretty good sustainable system going their in that if you are getting paid for grain and straw from the cattle and have the organic fertilizer to return to the soil you are not as exposed to inputs.

  • Registered Users Posts: 149 ✭✭ wicklow_hunter

    Yes, working from home and time off at short notice is usually not a problem

  • Registered Users Posts: 10,550 ✭✭✭✭ wrangler

    tHE advantage you have now with your mixed system is that if you move the tillage around the farm it'll always yeild well and having reseeded grass for the cattle they'll do well as well,

    Going all tillage will mean that the good yeilds are more diffiult to get. I doubt if you'll get 15000 profit from 100 acres. You know your own costs, will your land yeild 3 ton barley in continuous tillage.

    You'd be better to wait to see what changes the new CAP reform brings before changing system, there's pressure on now for paying farmers for doing very little.

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  • Registered Users Posts: 11,318 ✭✭✭✭ Danzy

    I'd leave the bulls and the winter finishing. Too much work.

    As wrangler says there is a big push on to low input and environmental scheme farming.

    You might find yourself managing set aside or crops for wild birds and doing well out of it.

    It's certainly very doable to find a balance where you make a money off the farm and do your off farm busy job well

  • Moderators, Society & Culture Moderators Posts: 12,275 Mod ✭✭✭✭ blue5000

    Partnership with some of the locals with all the shiny gear might not be your worst option. But it may not suit your Dad though. Where does most of your money come from now, tillage or beef?

    If the seat's wet, sit on yer hat, a cool head is better than a wet ar5e.

  • Registered Users Posts: 149 ✭✭ wicklow_hunter

    Tillage side of things is there just to provide fodder for the animals (20 acres of spring barley and 5 acres of beet give it take.

    Yes that’s what the uncles is at partnering with one of the larger local tillage lads . Kinda of on a contractor basis, but there not really contractors if that makes sense. How are leds paying €200 and the rest per acre for tillage if there not making anything out of it🤷‍♂️

  • Registered Users Posts: 149 ✭✭ wicklow_hunter

    Don’t take anything out of the farm . That’s what the off farm job is there for.

  • Registered Users Posts: 4,467 ✭✭✭ alps

    Think about tax, when you're putting together a plan. There's a waft of payments now for doing "less", but your current basic payment is going to take a considerable hit.

    The 15k work contribution that you are hoping to acheive, will only return 7k to your pocket. You might put in a lot of effort to return a mediocre amount.

    Plan to keep all the return (company, pensions, etc) before you decide to take on the work..

    Reinvestement in machinery at current prices is going to be difficult from 100 acres, and too much reliance on contractors will cut the profits. Of course, your currwnt machinery, well looked after, can last a very long time..

    I know nothing about tillage😉

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  • Registered Users Posts: 11,318 ✭✭✭✭ Danzy

    Think he means where does the farm drive the 15k out from, is it tillage or beef.

    Where it goes after for accounting purposes is not important.

    I think that with the cattle front you'd be better off with light stores, 250 to 300kg weanling heifers bought in September or October and finished the following year, easy kept, don't have to feed ration to them.

    Drop silage in and off you go. Light animals could stay out longer.

    Think you should turn over more than 15k excluding payments.

    A good accountant and adviser will help with the protecting of the profit.

  • Registered Users Posts: 149 ✭✭ wicklow_hunter

    In broad terms do entitlements stay the same if you switch between beef and tillage. Not an expert on this type of stuff. Entitlements are relatively high at present . Will they be cut if I switch to tillage ? 2023 will tell more I guess what’s happening with CAP

  • Registered Users Posts: 4,467 ✭✭✭ alps

    CAP is sorted. 2022 will run as last year, but 2023 will see your payments reduce towards €260/ha over the following 5 years, and at best at that level for the period afterwards (if entitlements will exist)

    Maybe you can pull out of a yet to be announced, environmental scheme (or organics), but unfortunately your SFP is going to take an enormous hit.

    It will make no difference to your payment whether you are at tillage or cattle.

  • Registered Users Posts: 15,346 ✭✭✭✭ Bass Reeves

    OP what is the subsidity made up of. There are 3-4 parts. I presume he has ANC. That should remain fairly uneffected. However if you go completely into tillage you will lose it. ANC could be up to 4k of your payment, is your father in an environment scheme GLAS scheme he could have 5k off that. If he was doing calves there was a 3-400 euro payment for weighting them.

    I think you said you father has 100 acres. The Basic payment will drop to around 300/HA this time and to 250HA within 10years. Therefore with in 5uears it will be 12K and it will reduce to 10k within 10 years. There any increase in profitability will have to be from the farm enterprise. I know little about tillage.

    Winter finishing cattle is a dead loss on a small scale as processor's do not pay enough if a difference between grass and shed fed cattle.

    You could finish 80-100 in a store to simmer beef system and about 50-60 I. A weanling to summer beef system. Store is probably more profitable and you definitely only need to feed a fairly decent silage for the winter. Some lads feed weanling ration, however IMO if you have good silage you only need minerals with bucket fed calves.

    The main advantage of weanlings over a store system bis you are buying less cattle and it's attachments say to source weanlings. With owned land you should be able to achieve a net margin of 200+/ acre in either system. During the summer the finishing cattle will need 3 kgs/ days for last 6-10weeks b fire slaughter.

    Contractor will do silage, slurry hedges etc. You will only have two bunches of cattle for most of the summer until you start buying weanlings.

    Only problems I see with all contracting of tillage it like a dealer buying cattle for you. He will look after his own farm first.

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