Tables 3 and 4 show the differing margins achieved, given the variations in purchase price, growth rate and sale prices. The steers show a margin range of $505-992/hd while the bulls range $4901020/hd. In terms of the per head margin there is no clear cut difference between steers and bulls, it is the other variables that dictate which is the most profitable option. To calculate the per kg drymatter return, I have estimated that a steer requires 3100kg DM to grow from 200kg to 580kg liveweight in 335 days at the high growth rate average of 1.13kg/day. The slower growing steer eats 2600kg DM by comparison. The research shows bulls will eat about 5% less to achieve the same growth rates, so 2950kg DM for the faster growing bull and 2470kg DM for the slower growth rate. The steers show a range of return per kg DM eaten of 19.4-32c while the bulls range 16.6-34.6c.
RETURN ON INVESTMENT Let’s split the results down a bit more, we can look at the average returns according to the three variables of purchase price, growth rate and sale price. The more expensive steers give a 4% lower return than the cheaper steers, while the bulls show an 11% advantage to the lower purchase price. The difference in return per c/kg DM between high and lower growth rates is 23% in steers and 35% in bulls. How you grow them is by far the most important factor in beef finishing profitability. In this analysis, the difference between selling slaughter weight cattle versus stores is a difference of $300-$400/hd, a margin of over 60c/ kg DM for the additional feed input to get them from store to slaughter weight in the allowed time. The difference in return per c/kg DM between high and lower sale prices is 14% in steers and 17% in bulls. Buying right is important. Most important is to grow them well, and finish the job with a good sale price.
Table 3 Outcomes for Weaner Beef Steers High end purchase price
High growth rate
Lower growth rate
Low end purchase price
High growth rate
Lower growth rate
Margin/hd
Margin c/kg DM
High sale price
$932
30.1c
Low sale price
$804
25.9c
High sale price
$595
22.9c
Low sale price
$505
19.4c
High sale price
$992
32.0c
Low sale price
$864
27.9c
High sale price
$655
25.2c
Low sale price
$565
21.7c
Margin/hd
Margin c/kg DM
High sale price
$940
31.9c
Low sale price
$780
26.5c
High sale price
$500
20.3c
Low sale price
$410
16.6c
High sale price
$1020
34.6c
Low sale price
$860
29.2c
High sale price
$580
23.5c
Low sale price
$490
19.8c
Table 4 Outcomes for Weaner Friesian Bulls High end buying price
High growth rate
Lower growth rate
Low end buying price
High growth rate
Lower growth rate
• Kerry Dwyer is a North Otago farm consultant and farmer.
20
Country-Wide
April 2021