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Free Content A comparison of production systems and identification of profit drivers for Irish suckler beef farms

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The objective of this study was to determine the effect of production system (Finishing, calf-to-slaughter; Live, calf-to-live sale; Mixed, a combination of Finishing and Live) on the profitability of suckler beef farms in Ireland and furthermore, to identify the key drivers of profitability. The financial records of 38 farms participating in a knowledge transfer programme, over a 7 year period, were used. Finishing (58.4 hectares (ha) and 119.2 livestock units (LU)) and Mixed (60.5 ha and 114.7 LU) farms had greater (P<0.05) size and number of livestock units than Live farms (45.0 ha and 84.4 LU). Beef live weight output per ha and gross output (GO) value per LU and per ha was greater (P<0.05) on Finishing farms than Mixed farms. Finishing farms had the highest (P<0.01) concentrate costs per ha, whereas contractor costs per LU were highest (P<0.05) on Mixed farms. No difference (P>0.05) in net margin (NM) per LU or per ha was found between production systems. Although physical output, in relation to stocking rate and beef live weight, was found to be an important driver of profitability, total costs per kg output was similarly strongly correlated with gross and net margin. Therefore, reducing the level of expenditure incurred per kg output produced is imperative to improving suckler beef farm profitability.
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Keywords: financial performance; net margin; production efficiency; profit drivers; suckler beef farms

Document Type: Research Article

Publication date: January 1, 2018

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