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Accounts attached - The current reality facing beef farmers - Any advice?

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  • 15-02-2022 1:37pm
    #1
    Registered Users Posts: 124 ✭✭


    I have been considering putting this up here for a while, but wasn't sure but currently really rethinking my whole current beef setup. It isn't really a poor me look at how my farm is performing it is more of a here is my current setup financially and coming to a conclusion unless I change my setup the enterprise is going to go loss making.


    In 2021 the farm made a profit of just under €10k. This was including grants to the value of €40k. I did not pay myself any wages, no new machinery was bought the only loans currently on the farm is about 20k and that interest includes principal repayments and has two years left to run and the farm will be debt-free. No ground is rented. The farm has around 75 suckler cows on it. The weanlings are generally sold in the Spring and are not finished.

    The prices of all our inputs are getting very high. The increases in the above are from the AgriBusiness part of this week's FJ that states for cattle rearing: Fertiliser ↑ 126%, Deed ↑ 21%, Electricity ↑ 20%, Machinery ↑ 20%, Fuel ↑ 30%. I would well believe it and can't help but seeing everything else increasing with it.

    I have a full-time off-farm job so this is the reason that my agri-contracting expense is very high but just don't have the time to spend anymore time on it. The most scary thing is even with very substantial subs of nearly 40k. I could lose nearly €10k next year....

    Just wondering for outside views on this, I am absolutely off my head to keep this going, or even any advice on where to go from here? To be honest looking at these figures is kind of taking its toll 😅



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Comments

  • Registered Users Posts: 6,494 ✭✭✭jaymla627


    Spring calving? Your meal bill and silage/contracting bills are off the reservation, if your spring calving selling the weanlings before housing would lead to huge savings, your sales revenue will obviously be down but the cost of silage and meal to winter your weanlings will be far greater versus what you'll get for them in the spring......

    Cutting back suckler numbers will also reduce fertilizer and meal costs, what landbase have you got, are you over-stocked given what your spending on meal/silage/straw yearly



  • Registered Users Posts: 124 ✭✭James2020App



    They are not Spring calving. Calving is a bit spread out throughout the year (Majority somewhere between October & March), they are generally sold in Spring as weanlings though.

    Landbase you are talking about 250 acres of marginal to good land in North-West of Ireland. Outwintering is out of the question, because once there is more than a week and a half's rain, heavy cattle start destoying the place to be honest. That straw/silage is almost entirely straw as all bought in. Probably about 10% overstocked.



  • Registered Users Posts: 3,949 ✭✭✭Hard Knocks


    Do you sell bulls entire or as bullocks? Is there a option to sell some weanlings in Sep/Oct if prices are good

    Sadly we’re all in the same boat, and with cost rising at alarming rates this is a must do.

    I will say don’t drop the contractor to go DIY, you need a work life balance



  • Registered Users Posts: 332 ✭✭JohnChadwick


    Very interesting accounts. Well looking at it, could you cut back to 50 Sucklers and farm organically?

    On the income side you have around 100 hectares then you would get 22k extra organic sub (dont forget to play your hand right in Glas). Then your weanling sales with 15 to 20% ish premium will balance out less stock a bit. That's 62k subs and 50k sales. So 112k income.

    Then on the expenditure cut out fert 11k, feed 25k (feed weanlings silage and absolutely no meal), extremely conservative but say you save another 10k from your agri contracting/silage/diesel/labour bills. Total expenses 118k - 45k = 72k

    Left with around 50k end of year and not at mercy of the feed fuel fert increases which will hammer up over the next decade no doubt..?



  • Registered Users Posts: 8,810 ✭✭✭893bet


    5k diesel despite that contractor bill?


    It is a decent amount of land especially if not fragmented. Leasing some tax free is attractive looking at the accounts. I will do a similar exercise later and post up if I get a chance as I have 2020. And last years totted up. I am only starting out farming in my own name but have pretty much decided to lease out in a few years time once my agri relief time period is up and my father is less active.


    Working full time off farm on a good salary. Any farm money is peanuts in comparison when looking at the work involved.



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  • Registered Users Posts: 865 ✭✭✭grange mac


    If loss making offset against Paye... Tbh I don't look fwd to putting my accounts together as they just confirm what I already know....

    But I focus on quality of life and getting out fresh air.. Good for mind.

    I've worse setup than you... I buy dear weanlings and sell cheap stores at Mart...

    Well aware loss making but its manageable so I carry on.



  • Registered Users Posts: 2,667 ✭✭✭Lime Tree Farm


    My late father had a saying "the farmer who is overstocked is poor"

    A dry spell, an early or late winter and you are under feed pressure, having to get rid of stock as opposed to selling when sales prices are better.



  • Registered Users Posts: 838 ✭✭✭dohc turbo2




  • Registered Users Posts: 8,810 ✭✭✭893bet




  • Registered Users Posts: 124 ✭✭James2020App


    Usually sell them as bullocks and hold off selling until Spring. There is an option to sell as weanlings in the back-end. Usually don't do this unless cash-flow really requires it. Usually the grants come in at back-end of the year that eases up cashflow a bit.


    I have no option, can't cut the contractor out. Firstly don't have the machinery, the help or the time with the full-time job



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  • Registered Users Posts: 124 ✭✭James2020App


    Thanks this is a good point. Not sure about 50 without fertiliser, maybe 45. We push the ground quite a lot with fertiliser and slurry as it is.

    Already in GLAS and just about every viable scheme as is possible. 20% premium on sales, I will definitely look into this actually, especially on the expense reducing side. Right now unless I decrease the expenditure am not going to be able to sustain it. Currently am dipping into my own personal income to cover credit for myself between costs going out and cattle or subs.



  • Registered Users Posts: 2,562 ✭✭✭Cavanjack


    insurance, tractor diesel, farm vehicle expense, fertilizer and straw all look very excessive to me. Seed for glas of €3000? My wild bird cover 1ha costs about €450 a year to grow including seed.

    Contractor also looks very expensive.

    you’ve great payments coming in. Many’s the man working full time hasn’t that a year. You’ve a full time job and another great income coming in. I’d be trying to hold onto every penny of it. Even if it means keeping no suckler cows



  • Registered Users Posts: 124 ✭✭James2020App


    A lot of diesel money was spent last year on transporting pig slurry too and from farm. I just paid for the diesel aspect of it. Doesn't be long adding up when you are paying for 3500 gallon tankers over a few miles.

    Yeah land is not fragmented. Tell me about it regarding the tax free lease. It is an incredible relief with no income tax on it. Tempted but there is a part of me that wants to keep farming. This farming is a bit of a drunk.

    I am the same new enough to it, maybe in year three. Also working grand job off farm and earning way in excess of farming profits but still the probably doing easily 30 hours on the farm.

    It's a bit more complicated that straight off setting it against PAYE income. If it was it would be ideal. We get crucified when on over the standard rate of tax in this country and doesn't even make much difference in the current year if you make a loss. It is advantageous in future years of course. I trained as an accountant so really know the ins and the outs of that side. Just not great if all your income is on the books for the main job.


    I sold weanlings last week and to be honest, it was challenging to figure out how the men buying them at current prices could turn any kind of profit. Unless they were going to feedlots for factories and factories were paying feedlots a decent commission.

    A wise man.

    No the numbers are actually legit, will dig into them a bit here. There is very little messing in it with stuff that shouldn't be in it, didn't include any personal vehicles and diesel etc.




  • Registered Users Posts: 124 ✭✭James2020App


    I've broke down the diesel and farm vehicles there for you.

    Ya bulk of fertiliser is pushing for second crops really. That seed isn't only for GLAS (Sorry badly presented) also for reseeding field that got sewed out during the year about 15 acre or 2.5ha. This is also increased the contractor cost a bit in this year. Probably as a whole increased expenses by €6k.



  • Moderators, Society & Culture Moderators Posts: 3,072 Mod ✭✭✭✭K.G.


    To me all costs look high .it looks like every weanling you sell is loosing you 400 euro.you need to cut all costs by 30 % nevermind increase them with current inflation



  • Registered Users Posts: 124 ✭✭James2020App


    Thanks for the input.

    I don't know if it would be possible to cut the costs by 30%. One possibility would be to decrease cow numbers, second cut and the amount of fertiliser needed for second cut. Not sure though because problem is there is a lot of ground here being cut three times. Just cutting it the once, may be as well to just lease out a section of it.


    Really just reassessing it all. Don't like €40k from the government turning into €10k in previous year, just shows wastage on my behalf.


    Considering a few options:

    1) Continue as is & decrease costs and numbers.

    2) Continue as is & start making losses

    3) Look into organic

    4) Lease part or all of farm



  • Registered Users Posts: 2,914 ✭✭✭cute geoge


    You said you traines as an accountant but I don't think any sane farmer would not hire you as an accountant even if you were free!! Cut numbers drastically even I would go as far as getting rid of suckers cows completely. Your farm is not growing enough grass to sustain your cattle numbers and all your are doing is firing fert. and meal at the problem .Some farms are not capable of high stocking and I would say this is your biggest problem . You have a mighty block of land but in reality making a bad hand of it even if you only managed 70-100 cattle for summer grazing you would be making a better hand .Forget about organics just cut down numbers and you won't need too much fert. or meal as a result and even less contractors around the place



  • Registered Users Posts: 332 ✭✭JohnChadwick


    Yea 50 Sucklers (plus sell 50 weanlings at 1 year mark) on 100ha is still 0.7LU of a stocking rate. Fairly OK for an organic system. Build up to 1.0 LU if you want after.

    Sounds like a lot of time input though, if you're only going to break even in Sucklers. Even keeping your stocking at 0.15 LU you avoid the big expenses and keep all your 62 grand except tax.



  • Registered Users Posts: 849 ✭✭✭Easten


    Are these real or make up figures? Like 5k for Insurance and 2.5k for Consultancy? If you presented figures like that to one of the Revenue commissioners auditing your books I'd say you'd be in trouble



  • Registered Users Posts: 3,949 ✭✭✭Hard Knocks


    If you’re selling as bullocks, would you get away without giving meal over the winter?



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  • Registered Users Posts: 1,139 ✭✭✭MIKEKC


    Agree completely. I had a large suckler herd in the 80s. When decoupling arrived got rid of the lot. Now buy Fresians at about a year old and keep to beef. Easy to handle ,always leave a few euro and my subs are safe



  • Registered Users Posts: 124 ✭✭James2020App


    Harsh but maybe fair :) Yeah not going to lie I have found the transition from being from being somewhat involved in the farm to totally taking over the farm more challenging that expected. Especially in the cost control area, I have found that almost everyone you deal with is out to make more money from you.

    To be honest my main frustration has been the amount of time that has went into it 75 sucklers calving, very often in the middle of night. I don't think long-term it mixes well with a full time job. They are very labour intensive. Then you are fighting with them to take milk from their mother and not to mention scour and all that.

    I am going to read more into the organic side.

    Can assure you have more to be at on a Tuesday than make up figures to chat about on Boards. Since last week's sale have been playing about with the numbers trying to figure out what best to do, with the price inflation etc. I know my father very often used his own money to bail out the farm and I don't at all want to go down that road. I want the farm to be profitable on its only stand without needing money.

    Some of my figures are round because I have them rounded to the nearest thousand on excel. Like the grants etc. Was copying and pasting formulae, that is the only reason for the round numbers.

    I am tempted not sure how much of that there is up Northwards direction. It is the calving of the suckers that kills me.



  • Posts: 0 [Deleted User]


    Along with the over stocked advice, another one is "everything you put between a cow (or any stock) and it's dinner costs you money".

    In other words, graze them, out winter them. If the answer is "I can't", there's either a problem with the health of the land, or the management/size/type of animal.



  • Registered Users Posts: 565 ✭✭✭n1st


    Well done for posting this.



  • Registered Users Posts: 1,036 ✭✭✭minerleague


    Presume 2021 figures are actual, if so to get 40k subs and be left with 9k profit at year end is madness for the work in calving 75 cows. The aim should be at minimum to keep all 40k. I find finishing own suckler stock minimizes no of cows on farm ( cow is the big cost ), reduces workload, reduces risk from TB outbreak.



  • Registered Users Posts: 8,611 ✭✭✭Mooooo


    Calving spread doesn't seem to be ideal in terms of cost. If you could calve them either before housing or in the spring, or a split with defined periods if you do want to keep the sucklers. Marginal to good can mean a lot of things so don't really know but 75 suckler on 250 acres doesn't seem overly stocked, particularly when you are fertilising etc.

    Woodchip could be an alternative to straw for older calves, or even perhaps under it in order to make it last longer,

    Do you think you can make better use of grass as opposed to 3 cuts of silage? I accept the growing season is more condensed in the North West but tbh if you can get machinery on it for 3 cuts then stock can be on it either in the start or the end of the year.



  • Registered Users Posts: 95 ✭✭nklc


    You’re insurance seems excessive and also no need for the projected rise for 2022 .



  • Registered Users Posts: 124 ✭✭James2020App


    The only thing you could conceivably outwinter up here is sheep. It just gets too wet. There are more than enough sheds though to house them.

    A good point though.

    Cheers, just trying to get alternative and opposing views on the situation to myself. Main reason is the fear of getting €40k in grants and still making a loss is concerning. So up to reconsider my options.

    Yeah 2021 figures are actual. Didn't fully appreciate the extent to which the costs escalated until did my year-end tots. Will keep a much tighter eye on it in the following years throughout.

    Yeah the cows are what costs the money. Teagasc are quoting around €700 a cow per year and that only increases depending on the length of the winter. My aim is to keep as much of the grants as possible. Thing is I could finish my weanlings but currently don't have the money to feed them the amount of meal as would be needed. It is an option though to decrease the cow numbers a bit and to finish.

    I think that finishing would be less labour intensive than calving.

    The reason for the calving spread was because don't have the time or help to have large multiples of cows calving at the same time. It is just the full time job and calving is the most challenging part. Ideally it would all be done over say a three week period but that would be the annual leave all gone and kind of need that for other farming tasks.

    Woodchip? That is a new one, was also recently suggested that Peat Moss is another alternative.

    The ground is funny. It is good enough ground for three crops being pushed, but not the kind of ground that would outwinter stock. The rain around here is grim in winter and sometimes the rivers overflood too and leaves the place swamped. It recovers well though by Spring.



  • Registered Users Posts: 272 ✭✭orchard farm


    Don’t mean to sound harsh but the phrase a busy fool comes to mind.40k is a great payment and you should be keeping that and just keep min stock.life is too short



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  • Registered Users Posts: 332 ✭✭JohnChadwick


    Most sensible option (as you already have Sucklers) is to stick with them, keep a lot less, reduce inputs and bank an extra 20k in the organic subsidy every year.

    If there's a beef system out there that consistently brings in more than that 20k organic subsidy I'd love to know it. Any part time beef farmers profit/loss going to be is small change.

    62 grand in subsidies is serious cash to be bringing in. Absolute money for jam.



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