Beef prices impact AT Wilson and Co

These are the overwhelming views of father and son duo, Thomson and Michael, of AT Wilson and Co, who finish around 2000 store cattle a year at Brownhill of Annochie and Clochcan, Auchnagatt.

Having started farming in the early 1800s, the business is now being run by the sixth generation of the family and very much reliant on finishing cattle.

The Wilsons have a small number of cross cows which calve in the spring and off spring are finished Ref:RH170521152 Rob Haining / The Scottish Farmer...

Since Michael took over the running of the farms, it has been a rollercoaster ride, with beef prices going from an all-time low to a record high just a few weeks ago, making buying decisions extremely difficult.

“As a finisher, we are going to the markets to buy cattle and if we are not making money on them, at the end of the day, we have no option but to pay less for them if we are to make any sort of profit. That, in turn, lowers the store cattle trade for beef breeders.

“The beef price for finishers usually works in an out of sync’ wave with the store values for breeders. When fat prices rise, store cattle values improve, so it is always going to be a bit of a gamble.

“We are currently buying in cattle as much as £200 per head up on the year in the hope the beef price will remain where it is at present to allow us to make money. We are paying a lot of money for stores, so we can't afford finished prices to drop much in the next six months,” pointed out Michael.

“We will buy 1500 cattle in the first five months of the year, so when they are up £200 more a head on last year that is an additional £300,000 tied up in livestock and our company has got to find the money to finance that from somewhere.

“To stock our farm, we need to get that back. Although the beef price is at an all-time high, it is only at the level it should be to allow us finishers and the breeders to finally make a living. It doesn’t even compensate for the bad years we have had to suffer,” added Michael.

the Wilson’s finished cattle go to Woodhead Brothers at Turriff Ref:RH170521136 Rob Haining / The Scottish Farmer...

Just two years, when beef prices were down as low as 330p dwkg, the Wilsons were losing as much as £100 per head for almost 18 months solid.

There were few options but to stick at it as they had the cattle and the feed stocked up and had few alternatives but to finish them at a loss.

“The only reason we managed to survive was down to the other components of the business and particularly the arable sector. They helped offset the losses of our beef cattle.

“At the moment, though, it is on the flip side with the beef enterprise holding up our potato business which has suffered from poor prices. That highlights how it is so important not to have all your eggs in the one basket.

“If we hadn’t been in the job for as long as we have, we wouldn’t have continued through the challenging years, due to the huge losses possible in various sectors.

"We try to run each of our enterprises independently, so our costs of production are viable, even though the business is run as one. As long as we are making money at the end of the year overall, that's all that matters.

“At the moment, our beef cattle are doing well and we had a really good harvest last year, so the cattle and the business are continuing to thrive on that. Although this year might be a different story!

“We can’t emphasise enough that the beef price needs to remain where it is to make it viable and sustainable for the industry to continue.

"Input costs are all increasing, with both barley and straw at record highs, so the beef price has to match it,” said Michael, who looks to buy in 108 store cattle every three weeks, which can be challenging come June and July time when there are fewer cattle available across the country.

majority of purchased cattle are continental cross steers, with the majority bought equally from Kirkwall and Thainstone marts Ref:RH170521138 Rob Haining / The Scottish Farmer...

The family buys in a mixture of continentals and native Beef Shorthorn store cattle, with the latter attracting a premium price through Woodhead Brothers, Turriff, and Morrisons' traditional beef cattle scheme.

With so many cattle to buy, the Wilsons have to travel far and wide too – up to the mart on Orkney and more locally to Thainstone, where the bulk of their purchases are made. A further 10% of their requirements are bought privately and direct off farms.

Cattle are purchased between 400-600kg at 18 months of age on Orkney and locally at 12 to 18 months of age at much the same weights.

“The climate is better here and there is more grain to feed them on. The older Orkney store cattle do better as sometimes the Thainstone cattle can be fed too much and have too much cover on them,” said Michael, who’s father, Thomson, jumps on a flight up to Orkney every fortnight at 10am and will be back at 5pm – no longer than any other sale day!

“We can only buy in what the markets have available all year round. Each breed has its own benefits and drawbacks, from killing out percentages to weight gains, there can be some variations,” said Michael, who looks for his cattle to gain 1.5kg per day on a grain-based ration.

The Wilsons used to push their cattle to gain 2kg per day, which caused too many health issues to include acidosis and feet problems.

Cattle are kept in batches of 90 and inside on straw-bedded courts, with those ready to kill sold direct to the abattoir two months after purchase.

majority of purchased cattle are continental cross steers, with the majority bought equally from Kirkwall and Thainstone marts Ref:RH170521142 Rob Haining / The Scottish Farmer...

The remainder are put into a bigger finishing pen for 150 that go across the weigh scales every week to ensure they hit the right weight spec’.

The majority are sold through Woodhead Brothers, with the Wilsons supplying 36 cattle a week to Morrisons in a scheme which has been running for four years. To achieve this, they have to keep cattle at different stages throughout the year, which can be a challenge and often means they have to buy cattle at different ages and times of the year.

“We don’t want them to be overweight but it is important not to be underweight as we are then not getting the full potential of the animal. Our target is 400kg deadweight for all breeds,” added Michael.

“We work well with Woodheads and get on well with them, however the main reason we use them is they are local. They are only 15 miles away from the farm which means lower haulage costs, as well as reduced weight loss in the cattle. We have found the further you take your cattle, the more stress you are putting on them.”

Grading results of the cattle are all down to breeding with the father and son duo aiming to stay away from poorer quality cattle and dairy-bred animals.

some of the silage-based diet, with barley mix, minerals, pot ale syrup and straw for roughage Ref:RH170521155 Rob Haining / The Scottish Farmer...

Ideally they aim to buy R grade cattle and sell U grades thereby boosting profit margins by 10p per kg – which are not often not achievable.

“We can’t buy the U grade types at markets due to their high premium. It wouldn’t be financially sustainable for us. Killing out percentages are so hard to gauge – in one load we can have cattle kill out at 62% right down to 49%, so grades can make a huge difference to the end price

“Once our store cattle hit 500kg, they're fed a diet of 40% malt pellets, 40% barley, 10% syrup, 10% oats, which after two weeks, is changed to 10% malt. The smaller cattle are fed a grass-based ration before moving onto the store feed so everything is fed a TMR diet,” said Michael.

“We mix all rations ourselves, buying in straights and using all of our own crops to be as self sufficient as possible.

"We're at capacity for the average crop yields we can produce here, so we are limited as to what else we can do to expand. Trying to produce 36 finished cattle a week is already a challenge in itself,” he added.

The next generation is already beginning to come through to support the future of the farm, with Michael and his wife Carol’s children, Abby (17) and Blair (14), showing a strong interest in the farm.

That interest has been sharpened by the family buying in 200 store lambs annually to take through to finishing as well as keeping a small breeding herd of 26 beef cows.

last years spring born calves, which go initially onto slats, receive a silage-based diet, with barley mix, minerals, pot ale syrup and straw for roughage Ref:RH170521156 Rob Haining / The Scottish Farmer...

Commenting on the future of the industry, Michael said: “I would like to think demand for beef will remain high because the hospitality industry has re-opened after months of lockdown. Consumers are going to be eating out more, having summer BBQs and not travelling abroad, so the money has to come back into our country.

“Beef, hopefully, looks quite promising in the short term. However, longer term who knows? Given the on-going challenges with Brexit it is hard to tell when we are only 60% self-sufficient in beef.

“Scotland’s seed potato business has been hit a lot more with Brexit and with AHDB getting a no vote, this has caused a lot of issues within the industry. Brexit is looking a lot harder than we first thought. I am sure it will all sort itself out in the long term but we have to work at opening up opportunities for supplying and fulfilling our own country’s demand,” said Michael, who is the chairman of the NFU potato committee.

“The important point is trying to be a self-sufficient country, which is why we are aiming to be a self-sufficient farm. We don’t want heaps of road miles. We want to be as efficient as we can to make a sustainable, environmental and financial future,” said Michael, adding that the business has also opted into Morrison’s project of being carbon neutral by 2030.

“We are only just starting this, so we are excited to see the outcomes and the paths to help an environmentally friendly source. I think for beef cattle it could be quite challenging, but we can never say never, we must take a shot at it.

“We took the step into it as we are very forward-thinking farmers and believe it is going to have to be something we need to do in the future. A bit of preparation goes a long way in our business. We’d like to think in years to come we will get a premium if we can become carbon neutral and help the planet – everything is do-able if people are willing to pay more for it,” concluded Michael.

Farm facts

Livestock numbers: Finishing 36 beef cattle each week plus 250 Shorthorn cattle annually, as well as keeping 1000 store lambs over the winter to tidy up the grass.

Acres: 2000 acres. 450 acres on a long-term tenancy, 950 owned with the remaining rented.

Crop: 350 acres grass for grazing; 180 acres in Agri-Environment Climate Scheme (AECS); 50-100 acres of silage; 450 acres of winter barley; 180 winter wheat; 100 of winter oats; 240 seed potatoes; 500 acres spring barley; 80 acres green manure; 30 acres fallow. All grain is dried with a 500kW biomass boiler and 50% of the power for the potato stores are supplied by their own 70kW wind turbine.

Who is involved? Thomson and Moria Wilson, and their son, Michael and his wife, Carol. Along with three full-time employees, two self-employed men, who helps out 50% of the year and the team take on three seasonal workers for potatoes.

the best investment was the squeeze crush with weighting cells, the Wilsons can easily monitor and dose cattle when required Ref:RH170521144 Rob Haining / The Scottish Farmer...

On the Spot Questions

Best investment? My wife. Hydraulic squeeze crush for the safety, speed and less stress on both the animals and our workers.

Best advice? Always listen to the wife.

Biggest achievement? Fathering two beautiful children.

Where do you see yourself in 2031: Doing the same thing with less debt – hopefully! – and being even more efficient than we already are.

What have you missed most through the pandemic?: Getting a good old catch up with other farmers at shows, especially the Royal Highland Show and at various auction markets ... you can learn a lot from speaking to different folk over the country.