Beef ProductionFriday, Jul 6, 2001
A projected doubling of bobby calf slaughter prices for this season calves is throwing some confusion
into the bull beef rearing market. The increased price is once again caused by the lower exchange
rate and disruption to European markets by foot and mouth. Probably both are passing influences
that may well be absent in next seasons pricing.
Does this mean, as has been suggested, that rearers should mothball there operations for this year because
of a $60 increase for a four day old calf? The pre-season baulking at this higher calf price
appears to be more smoke than substance. The reality is that rearers have being purchasing well
above this new price level for the past 18 months as well as accommodating additional feed costs.
However it does illustrate the how small the price margins may be to cause elements of a production
system to breakdown. If $60 per head is sufficient to kill calf rearing what has the lifting from
around $650 to $950 per head done for the economics of beef breeding and fattening in terms of profitable
There must be some dairy conversion farmers looking at all that capital specific to dairy production
being invested in land that still only produces 10-12,000 kg of dry matter wondering at the sensibility
of there choice.
On current prices a self contained beef breeding and production system has much to recommend it in terms
of production efficiency and capital return with minimum exposure to cost inflation.
Finally it is the efficient conversion of low cost pasture into marketable protein that is the strength
on the NZ pastoral farmer.
Beef production in the medium term has the potential to surpass dairy as the best pastoral production
system for many regions of NZ.