By Robert Logan,

SAC Consulting senior livestock business consultant

What is the best way to finish cattle and how do we make a profit from it? Is forage or concentrate finishing best? Should they be young or more mature? What system or growth path gives us the best eating quality?

These are all questions frequently proposed and revisited, particularly when market price drops, so a recent trial funded by AHDB Beef and Lamb and conducted at SRUC’s Beef and Sheep Research Centre, near Edinburgh, set out to examine some of these issues.

Three batches of spring-born, suckler-bred, Limousin cross-bred cattle (each with 12 steers and 12 heifers) were allocated to three alternative finishing systems or growth paths at around 12 months of age.

Alternative growth paths studied:

Short duration finishing system – finished at 12-16 months old on an intensive, indoor barley beef system.

Medium duration finishing system – finished at 18-26 months old following a second summer on good quality grazing.

Long duration finishing system – finished at 28-36 months old following two summer on poor quality grazing.

All housed diets were offered as total mixed rations (TMR) fed through a feeder wagon fitted with a feed recording system and all animals were weighed fortnightly throughout with both laboratory and human taste panel assessments of meat eating quality made at Bristol University following slaughter.

A full economic analysis of each finishing system or growth path was undertaken using actual variable costs incurred for each animal and industry based fixed costs taken from published QMS and AHDB figures. These were used to assess individual animal profitability that could be expected from each finishing system under commercial farm circumstances.

Trial results:

Average daily liveweight gains (DLWG) over the whole length of these finishing periods were 1.58, 0.96 and 0.54 kg per day. This reflected the aims of the formulated diets, but it did confirm the genetic potential of these animals for growth.

From a financial perspective, the average total feeder's margin – ie the sale value less the purchase price – was £301, £523 and £570 per head for the short, medium and long duration systems, respectively. All costs and any profit must fall within this feeder's margin, otherwise a loss is incurred.

The main difference was that younger cattle produced slightly lighter carcases, creating the impression that long-keep grassland based finishing systems result in greater profitability. However, when these values were expressed on a daily basis – feeder's margin per day – the mean values were £3.72, £1.86 and £0.91 per head per day across the three alternative finishing systems.

This did not leave much room to accommodate daily costs amongst longer-keep cattle, therefore, while their daily cost is less, it still challenges initial perceptions.

It was actually found that low performing grassland-based finishing systems are not cheap when the large number of days involved are taken into account. Total variable costs were £265, £437 and £505 per head, whilst estimated fixed costs were £63, £120 and £274 for the respective systems.

Examining the relationships between feeder's margin and the total costs incurred for individual animals, either during this trial (red cost lines) or from industry fixed cost estimates (green costs lines) revealed that the greatest potential for profit was to be found when animals were slaughtered at younger, rather than older ages. This is illustrated by the increasing number of steers or heifers at younger ages that generate a financial surplus – they are above the cost line (see chart).

In the absence of significant price premium for growing cattle slowly, the project message was to target higher daily liveweight gains through feeding the best quality feeds available, whether that is forage or concentrates.

The research highlighted failings in proxy indicators of profitability that can be misleading, such as 'feeder's margin', 'market topping' sale prices for individual animals or 'feed costs on a £/t dry matter basis'. The latter point was with reference to grass, which can only be cheaper with strong management and daily weight gains.

Since the prerequisite was to improve profit from beef farming activity, a major benefit of not turning finishing cattle out to grass is that the extra resources (fields used for finishing) can generate additional profit from a wide variety of enterprises, like more cows or growing crops – what else could the land be doing?

From a dedicated cattle finishers’ viewpoint, it allows greater turnover of cattle through existing sheds. The business as a whole can generate additional profit from additional output with the same fixed costs (land, labour, buildings and machinery).

Beyond the finances

Mean slice shear force measurements – a mechanical measure of meat tenderness – were also taken, with toughness increasing with age.

Sensory taste panel assessments confirmed these results, showing increased levels of toughness between the short, medium and long duration systems. Despite these differences, the long duration system was found to still produce beef within eating quality parameters that were considered acceptable for the human food chain.

Maybe the main point here is that there were no negative consequences for eating experience resulting from the short and medium duration finishing systems relative to the long duration system.

To finish:

Results confirmed that commercial finishers should adopt efficient, short to medium duration (12-20 months) finishing systems. These systems deliver high quality beef to the human food chain whilst offering producers the greatest opportunity for profit from their business as a whole.

Efficient systems and making best use of existing fixed cost structures will be the key to profitable beef systems. Significant price premium and niche marketing may be routes to mitigate additional costs of longer-keep cattle.

However, that does not detract from the fact that higher performance and lower days to finish can lower production costs and increase enterprise margin. This principle is true, regardless of current system.