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Beef Production

Greetings Readers

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 land use.

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.

Good farming

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