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

James2020App

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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trg

Look my tuppence worth is that you've gotten the idea now. Reduce the cow numbers and be absolutely ruthless in this and stay ruthless. I'm gonna try FTAI this year as I've made the call it must work around my schedule.

So dramatic reduction in cows plus summer grazing the extra land.

I'm like you in that good job but demanding family life on top of that, you've that pleasure to encounter yet!

One or two making little of your efforts re cost, at least you know your costs. Many don't.

So reduce and be ruthless is my motto.

MIKEKC

https://www.boards.ie/discussion/comment/118641760#Comment_118641760

Given that every article we read tells us that sucklers loose money plus the extra work why are people advising that a number of them be retained.?

tanko

https://www.boards.ie/discussion/comment/118641869#Comment_118641869

Fixed time Ai i think, have most cows calving as close together as possible.

tanko

https://www.boards.ie/discussion/comment/118642149#Comment_118642149

I’ve never done it but first you synchronise the animals using cidrs or prids, then Ai them ten days (I think) later, hopefully a lot of them will go in calf but it would be a bit drastic to cull anything that repeated three weeks later i think. I suppose you could just Ai any repeats after three weeks, or let a bull out, maybe any repeats after another three weeks could be culled depending on how long of a calving season you want. A pre breeding scanning check before you start any of this might be advisable to sort out any problem animals.

MIKEKC

https://www.boards.ie/discussion/comment/118642117#Comment_118642117

I had a large suckler herd in the 80s and liked them. Then went to fattening Fresians and got to like them too, particularly how easy they are to manage and I am still benefiting from them through my BP. I also have sheep and agree you have to have a gra for them.

SuperTortoise

Just wanted to say well done for posting figures, i'll chip in with my 2 cent later on tonight when i get infront of the laptop.

tanko

https://www.boards.ie/discussion/comment/118642390#Comment_118642390

A bulls genomic evaluation/stars doesn’t really tell you whether or not he’s good enough, the calves he produces do that.

Dickie10

i think from my experience of taking over the farm about 8 years ago that cash flow is king. there are now no months where money isnt coming in outside of subs, it really helps to pay bills. i got rid of the few sucklers , i had about 20 kind of by accident and kept all to beef. I found there was far to much risk and labour vs reward. Now its all weanling and yearling heifer to beef, biggest finding was massive reduction on labour, vets bill and feed. younger and store heifers so easily fed and finished. i now have 120 ewes and 30 in lamb ewes and buy in around 200 store lambs each august and september although this year only bought 100 as too dear i felt. but you are in the north west so its pretty much a different world to south meath. im fearful of every lad getting in on ewe game but would a ewe flock not suit a lot better than big continental sucklers? i guess store lambs are out the window where you are for buying and killing but maybe hold over dry and sell nice hoggets for breeding in autumn? they wuld take no meal if kept dry. you need to get some way of getting cheques in every month of the year. the only month of the year i dont have money coming in is April unless a few runt store lambs/hoggets.

trg

https://www.boards.ie/discussion/comment/118641869#Comment_118641869

Fixed Time AI - idea being you'll condense calving to a period that suits you.

There's pro's and cons but I'm gonna try anyway

trg

https://www.boards.ie/discussion/comment/118641944#Comment_118641944

Dunno. I'm only saying what I'm doing really. I'm not keeping them for financial reasons.

trg

https://www.boards.ie/discussion/comment/118642149#Comment_118642149

Well we'll still have the bull for this year so he'll mop up what doesn't make it to FTAI by not keeping or being late calving to begin with.

He'll be getting the road on July 1st or thereabouts when passed a BDGP date so that'll be that.

What isn't in calf by then will be culled.

What doesn't make it to FTAI in 2023 will also be culled. The 22 born heifers will be added to FTAI by then though so should keep the 15ish numbers up that way.

There will be a high turnover of cows alright

Dickie10

sorry meant to say im working as well, but locally enough o no long commute, leave at 8am home at 4:30, a very odd evening i have a meeting or in autumn training a team.

Danzy

Set your target for next year at 50k and an awful lot less hours per week.

Very doable.

James2020App

https://www.boards.ie/discussion/comment/118641760#Comment_118641760

Thanks yeah definitely going to reduce suckler cow numbers and be a lot more on top of the money going out. Especially the contractors, meal and fertiliser.

https://www.boards.ie/discussion/comment/118642025#Comment_118642025

Yeah 80% is a solid mix because keeps the work side going. The problem with going 80% is it is likely that you will still have to do much the same amount of work and responsibilities with a day less to do it in. Have just seen this happen very occasionally.

Good question if this year is an outlier. It is almost too early to say this is the second full year. Last year was somewhat similar, the profit was closer to €20k. This was due to weanlings purchased and finished though. If you exclude them the profit was about €12k with similar setup. The costs across the board for the past two years have just been to high in truth.

Yeah agree I will be reducing suckler numbers. The only do need help really with TB testing, dosing, going to mart etc. So wouldn't really be bringing much labour in as is. Oh yeah well able to feed them myself without help in winter.

Yeah the vast majority of the ground could produce silage alright. Renting or leasing is a tricky one. Finding an appropriate tenant could be a challenging one. I know of tenants in the area who have broke renters hearts between not paying, and refusing to leave the ground then, destroying ground and not taking any care of it. Lease contracts a lot of the time are not worth the paper that they are written on.

Paddocking definitely would be the way to go, but a bit of pep would have to go into getting that right.

On your farm infrastructure & machinery. Again it fortunately has good sheds build in last twenty-five odd years all to grant spec. The farm doesn't have much machinery really two tractors and various older pieces of kit. They are grand really for what is done with them. So no immediate large expenses in the next three years there neither.

Forestry would be an option for maybe 20 acres of it. Again something haven't considered before so may look into it a bit.

https://www.boards.ie/discussion/comment/118642345#Comment_118642345

Yeah I have no real affinity just to sucklers really. More of a gra for any kind of cow/calf/beast. Would be as happy feeding a pen of them well as calving a cow and seeing the calf grow. So fattening like that is definitely not of the cards neither.

patsy_mccabe

OP, just my thoughts.

As for costs, consider all costs as annualised costs. By that I mean, if you spread costs over the years you get benefit from them, the costs are more realistic. For example, re-seeding and liming. You may cost them all to the year you paid for them , but the real benefits may be over 10 years or so. I'm not saying you do this in the accounting, but consider it for your own cost/benefit as it were.
Because of you off farm high income and high rate of tax, you can invest heavily in the farm now and benefit from the Capital Allowances and income tax write-offs. It doesn't necessarily have to be a shiny new tractor (which will lose value anyway) but could be sheds, proper handling facilities. Whatever makes life easier for you down the road.
Focus more on Profit and less on Output from now on. We are all guilty of it, me included.

Bass Reeves

https://www.boards.ie/discussion/comment/118644991#Comment_118644991

If virtually all your ground is capable of producing silage, I would get rid of the suckler's over 3-4 years. Change over to a summer finishing system. Buy in bucket fed weanlings and yearlings. My own preference is for Friesians but everyone to there own as long as you keep an eye on profitability.

Watching a few marts this week 220-280 kg Fr yearlings can be bought for 350-450 euro. You would probably pick up a few coloured yearling for value as well. These sort of cattle could go to grass in Mid late March maybe even earlier. 85% of these sort of cattle ran in a paddock system will finish July-September 12 months at 330-370kgs. You would average 1350-1400 euro/ head at a 4/kg base price.

Suckler's are inherently unprofitable. Most lads cannot grasp that. On better type land you have other options. System such as Calf, weanling/yearling or store to finish systems are a much better option well.

If your internal fencing (around fields) is ok it fairly easy to work a paddock system using pigtails and reels even if you have to work off battery fencers. In time move water troughs to middle of the fields and put three posts around them. You can work paddocking very hard asy off them.

Straight away your straw cist will be gone. Your fertlizer cost will remain much the same. Silage only for store cattle being over wintered. I even question the use of ration on bucket fed weanlings if you have decent silage. Plenty of bagged minerals over the winter.

During the winter most days you will be in and out of the yard in an hour. There are days I have the silage pushed in to the barriers in twenty minutes.

blue5000

OP thanks for starting the thread, first step to recovery has already been taken, you realize you have a problem.

For this year put paddocks into a few fields nearest the yard, just divide them in half with a water trough in the middle of the field. You can always sub divide them again across the trough or just use pig tails and reels.

Have you any info on the cows like genomics or icbf records? If you have it makes it easier to get rid of non performers.

Decide when you want cows to calve, for me it's mid March to May. A bit later might suit you. Then cull or sell off the cows calving late with calf at foot, cows calving too early can be let slip a few months before bulling.

If you are working off farm get an easy calving bull, you'll take a hit in the mart selling weanlings but if you go to less cows and finishing there's no advantage with continentals.

Seriously consider about 40 acres of forestry on the worst land, you're at the right age to benefit from it, tax free, kids going to college in 20 years and a good shot in the arm at clear fell. You could do half now and half in 5-10 years time to stagger income from thinnings and clear fell.

Organics isn't for everyone, the paperwork is brutal, nobody seems to mention that. It could work for you, there are walks/open days this year just google them and try talk to as many organic farmers as you can before deciding. Look at their yards and see how they adapted buildings to suit the system.

Best of luck.

blackbox

First off, I'm not a farmer so I'm looking at this from the outside.

It seems to me that there are a lot of people in the business who are not worried if they don't make a profit - i.e. they have other income and are farming because they want to keep the land or because they like the lifestyle and maybe save a bit on tax.

If these people are prepared to sell at or below cost, how can someone who is trying to make a profit possibly compete with them? Any market that is flooded like this will be destroyed, whether you are selling cattle, televisions or tulips.

Farmers complain about supermarkets selling below cost (and I agree with them), but if they are doing the same thing themselves they need to stop and think and take a good look at themselves.

Bass Reeves

https://www.boards.ie/discussion/comment/118645500#Comment_118645500

Only thing I would disagree with is selling cows with calves at foot. These late calving cows when sold with calf at foot are bought by dealers or cull finishers. The calf is taken from the cow and resold again. If you see sucklers with a calf after May split them. Ideally have the calf 3-4 months of age at least.

minerleague

https://www.boards.ie/discussion/comment/118645500#Comment_118645500

Is the paperwork that bad or are you trying to put off people from joining to protect organic premium ?😉

blue5000

https://www.boards.ie/discussion/comment/118646457#Comment_118646457

Not trying to put anyone off, I'll just give you one example; the application form is about 21 pages.

Bass Reeves

https://www.boards.ie/discussion/comment/118646457#Comment_118646457

Another thing about organics is that in previous organic scheme's a lot of environmental scheme options were not available. It reduced the ability to get a decent payment off GLAS. In general it cost lads 2-4 k.in environment schemes. There is talks that this will not be a problem in future.

JimmyCorkhill

Is leasing the land (without the risk of the lessee having any entitlements) the less stressful & sensible option?

Sounds like a nice passive income to me, while working fulltime. Maybe you can top up your pension too to avoid extra taxes on the income from your job.

Or maybe keep a portion of the land if you still want to do a bit of farming.

patsy_mccabe

https://www.boards.ie/discussion/comment/118645588#Comment_118645588

"...If these people are prepared to sell at or below cost" - what other option do they have? Farming is not like any other business. You can't refuse to sell. Most land in this country is only suitable for livestock. Cycle times in beef are also very long, up to 3 years and so farmers can't react to market prices quickly. All farmers can do is reduce output and try to improve efficiencies, but even that is limited.

Danzy

https://www.boards.ie/discussion/comment/118645588#Comment_118645588

People used think like that but the pain and cost is all one way.

Ultimately the problem is people want cheap food, govt wants cheap food, people want strict regulations and environmental care but to balance the first part there is a European wide Push towards importing from countries where standards are non existent and a petrol is the only thing for Trees.

People producing max output is a problem as well.

Dunedin

https://www.boards.ie/discussion/2058233091/accounts-attached-the-current-reality-facing-beef-farmers-any-advice

Don’t mind all the shyte you’ve heard so far, here is what to do.

lease 230 acres at €200 acre - €46k straight off there.
assuming all your neighbours are working off farm, bore a few holes in the ditch and let the cows into the neighbors when they’re gone to work and have them back in yours by time they’re home in the evening. that’ll save a fortune in fertiliser
surely the neighbors have plenty of big stacks of bales in their yard and the odd field. Rob circa 10 every few days and they won’t notice them gone. That’ll save a lot in contractors bill
Increase sucklers to 100 (in the first year and extra 10 every year till you hit 200)
gross profit in year 1 - €40k subs, €46k rent, sale of 100 weanlings at €900 a pop =€90k total €176k
less expenses: €45 euro for round of drinks in local on the Monday evening you sell the weanlings: €8.50 for rasher sandwich, club milk and tae in the mart
haulage fees - tell yer man ya’ll pay him the next time you see him.
Net profit €175,946.50
use the 20 acres to park the new John Deere, new 10’ krone mower and you’ll need 30’ trailer for drawing the bales from the neighbors (can’t be doing two trips in case their missus spots ya)
and to think you spending €2.5k on consultancy 🙈🙈🙈

Who2

Everyone is telling the other person to reduce, cut , cull change to organic. Completely change everything that his father has set up after a single year farming.

there are plenty of lads chop and change from system to system chasing the next big thing and never really get good at any one thing and in doing so never really make the big money.

this lad has 75 sucklers on 250 acres, he’s far from overstocked. If it’s weanlings your selling then it’s weanlings you need to be selling , not bunches of random stores. That means getting them all gone before October and calved in January. That way the op is only left with cows to winter. But you need continentals and good ones to make this work.

another option I’d be seriously considering in the ops situation is to trim back the cow numbers to around 60 and run a good Angus bull and finish everything.

the op is 28 with a good off farm job. You’ve a serious opportunity to make this work but it’ll take a lot of tweaking and a serious amount of work.

[Deleted User]

I think your biggest problem is trying to be intensive.

It is leading to very high costs and not leaving extra profit.

75 suckler cows is an awful lot for a part time farmer.

Would you consider dropping to 30 and keeping the progeny to beef?

30 is a nice number for the schemes etc.

You could always buy in a few dairy cross heifers Angus or Hereford and finish them at say 25 months when prices are reasonable.

I wouldn’t buy freisian bullocks as they will be stuck with you for 30 months and are feed inefficient and you get caught with the masses when going to market.

FintanMcluskey

https://www.boards.ie/discussion/comment/118649259#Comment_118649259

this lad has 75 sucklers on 250 acres, he’s far from overstocked

At first glance he's not overstocked.

But then he is spending €25,000 on meal, €10,000 on straw and silage & €11,000 on fertiliser?

That's over €600 a cow/pa on those expenses alone.

Seems outrageous

Bass Reeves

https://www.boards.ie/discussion/comment/118649256#Comment_118649256

Crap. It not rely helpful to the post OP put up