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Suckler Freefall?

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To maintain the national suckler herd, a replacement rate of 200,000 heifers calving per year is required. Last year, we fell 20,000 short. Matt O’Keeffe reports Sensational headlines often hide a story that is not quite as alarming as the headline may indicate. In this case, even if many of the powers that be would like to think otherwise, suckler farming is declining at a rate that is now close to a mass exodus. The sector peaked at 1.1m cows in 1999. It now stands at 890,000 – a number that is reducing each year. Not all of the reasons are economic, but the reality is that if one looked at suckler farming strictly from a financial viewpoint, there would hardly be a suckler cow in the country. Unfortunately, many of the best suckler farmers are doing just that. Now that there is what is seen as a viable alternative, those with the inclination and enthusiasm for change are either contemplating a dairy alternative or have already set that decision in motion. Falling

Replacement Numbers
Figures produced by Joe Burke of Bord Bia, using recent data from the Department of Agriculture’s Animal Identification and Movement (AIM) database, reveal that registrations of beef calves declined by over 81,000 head (6.3 per cent) from January to September 2013. According to the report: “The main factor contributing to the fall in beef calves is the considerable decline in Ireland’s suckler herd in comparison with previous years. Calf registrations to suckler cows have fallen by more than 65,000 (7.5 per cent) in comparison with 2012 levels.”
As Joe points out, there are a number of reasons for this decline. Partly, it is related to higher culling rates in 2013, resulting in an estimated 25,000 (18 per cent) additional suckler cows being slaughtered at meat plants. On-farm mortality figures were slightly higher in early 2013, when an additional number of cows were lost as a result of fodder-related difficulties.
However, the key variable that has impacted most severely on the national suckler herd has been a slowdown in the number of replacement heifers that are bred. For the first nine months of 2013, only 147,000 beef-bred heifers registered a calf. This represents a decline of more than 31,000 head (18 per cent), in comparison to the same period in 2012. In order to maintain the national suckler herd, an annual replacement rate of 200,000 heifers calving per year is generally required. However, the figure for 2013 was estimated at less than 180,000.

Subsidising Low Productivity
Price pressures that have impacted the beef sector over the past nine months have served to accelerate the decision making that is going on in the minds of many suckler farmers. In addition, the completion of the new CAP payments to the sector has given some income certainty to beef producers of every type. There is a realisation that over the next five years, Single Farm Payments will decline. As a result, production costs will no longer be subsidised to the extent they have in the past. The figures speak for themselves. In 2012, the bottom one-third of suckling-to-beef farms only held on to 46 per cent of the premium that came onto their farms, whereas the top one-third of suckling-to-beef farms held on to all of their premium to add to their net profit of €357/ha. Delving further into the figures, it emerges that, as well as the variability in performance between different suckler farms, there are also variables based on the actual production systems on farms. In general, suckler farms selling weanlings had a lower gross margin and net margin per hectare, excluding premiums, compared to suckling-to-beef farms. Much of the difference has to do with output. For instance, output of beef liveweight per hectare was 147kg lower on the suckler-to-weanling farms, compared to the suckler-to-beef farms, due to a lower stocking rate (1.52 versus 1.74LU per hectare) and a lower amount of beef produced per livestock unit (287kg vs 335kg).
Teagasc Drystock Adviser, Terry Carroll points to the huge variation in performance and return within the sector: “In suckler farming, margins have been tight over the past few years. Within that, however, there are some producers earning gross margins of up to €1,000/ha. The average is about €650, but the top third of those producers bringing the calf to weanling stage are averaging gross margins of €730/ha. In closed systems, where producers are bringing the calf right through to beef, the best performers are averaging €970/ha.” Terry agrees that the best margins take a lot of effort and are not attainable by every producer for a wide variety of reasons. “There is a lot of work with sucklers and, even for the best producers profits, are not spectacular, there is still considerable scope for producers to earn a reasonable living from suckler farming.” Given the levels of dissatisfaction over beef prices, it should come as no surprise that farmers are questioning their future. As Terry points out: “We shouldn’t make knee-jerk reactions based on a moment in time. Prices had been good up to last autumn and basing a long-term decision on a price point at a particular time may not be the best approach.”

A Reality Check
In recognition of this, Teagasc has invested considerable time, effort and expertise in providing suckler farmers with the skills to improve their returns from suckler production. The development of discussion groups within the sector is part of that strategy.
‘’There are a range of management practices that must be adopted on farms to secure the desired returns. Not just a few management practices, but all of them, if margins are to be improved to what the top 10 per cent of producers are achieving. Some may not want to hear that, but that is the reality,” says Terry. “Good grassland management, with low stocking rates, will not suffice.
“Good breeding practices are essential, but they are only one aspect of the profit equation. Stocking rate is essential, the numbers of cows/ha and the kilos of beef produced from those hectares. Breeding and feeding are two other important areas that must be prioritised.
“Calving date, calving rate and calving spread are all capable of improvement on most farms.The national average calving rate is 0.85 calves per cow per year.”
On average, Irish suckler cows calve every 13 months. Reducing this calving interval from 395 days to 365 days, allied to a lift in the calf to cow ratio to 1:1 would have a huge effect on suckler profitability across the national herd. The statistics are improving, as shown from figures indicating that calving intervals have narrowed from 207 days in 2011 to 395 days on average last year.
Even the top 15 per cent of suckler herds are only calving 50 per cent of their heifers at 22-26 months.
Summing it up, Terry states: “Calving a cow at 24-months is worth an extra €600 per cow. It works out at €50 per month that the heifer is not calved.
‘Unless you are hitting those targets, profitability will not improve.”