With beef prices reaching £3/kg deadweight recently trade is predicted to remain buoyant for 2011 as supplies worldwide remain tight.

But despite this welcome news some finishers – in particular those finishing black and white bulls – will face continued pressure on profitability, according to industry specialists.

Speaking at this week’s Reducing Feed Costs for Intensive Beef meeting at Harper Adams, staged as part of the Better Returns West Midlands programme, EBLEX senior regional manager Clive Brown told delegates tighter supplies and improved exports would help support prices. “Forecasts for 2011 suggest we could see another record year for beef prices,” he said.

“Retail sales for 2010 were up 3% overall and although the market saw a small dip at the start of 2011 (due to consumers stock-piling freezers in December) we expect to see stable sales for 2011.”

Improved returns were welcome but finishers had to ensure cattle performance was on target to benefit, warned HAUC beef specialist Simon Marsh. “The majority of black and white bull finishers are not achieving targets,” he said.

Finishers should have bulls ready for slaughter at 540kg liveweight at 13 months old to achieve a 280kg carcase at grade -O, delegates were told. In 2009-2010 black and white bulls in the HAUC beef unit achieved a DLWG from 12 weeks old to slaughter of 1.4kg/head/day. Consuming 2.46t concentrates/head they achieved a feed conversion of 5.49:1 and recorded a gross margin of £339/head.

“Sadly, few black and white finishers are achieving that,” said Simon Marsh. “A recent survey of abattoir data highlighted most achieved a carcase weight of 274kg at 15.1 months old.”

Other factors also affected margins. Research at HAUC had shown continental dairy-bred calves sired by top 1% index beef sires finished 25 days earlier and 18kg heavier, adding £116/head to margins.

Producers also needed to monitor weight gains. The best dairy bulls doing 1.5kg/head/day should be left to add extra weight while those doing 1kg/head/day were unlikely to benefit margins and should be pulled out and sold early, he added.

“Anecdotally I have noticed when you take the first of the best bulls out for slaughter the remaining bulls in a pen appear to have a slight lift in performance. As these fast finishers are probably the most dominant animals it may be that the others have better access to feed and face less stress,” he reported.

The other factor often overlooked was fixed costs. Hard to pinpoint, HAUC margins allow for £10/head/month. “Our most recent batch of 13 month old black and white bulls sent away achieved £2.82/kg for -Os and after calf costs left £167/head. After fixed costs of £130/head, at 13 months old margins are tight.

“It emphasises the need to keep on top of performance as the margins are not great and finishers must try and must avoid P+ carcases since the difference in value to an -O grade is approximately £145,” he explained.