Latest beef gross margin budgets reflect strong industry

14 Mar 2017

Returns for NSW beef enterprises remain strong in 2017 despite challenging seasonal conditions, as indicated in the latest NSW Department of Primary Industries (DPI) beef gross margin budgets.

NSW DPI Beef Development Officer, Todd Andrews said compared to 2016, beef gross margin returns have increased by 10 per cent on average, although not all beef enterprises increased by the same amount.

“Gross margin returns for weaner and vealer producing enterprises increased by 13 per cent, due to the high demand from producers trying to restock following the previous drought years,” Mr Andrews said.

“The feedlot market again performed very well, with feeder steer breeding enterprises topping the list at almost $52 per dry sheep equivalent (DSE).

“This reflects the current shortage of cattle and the ongoing strength of the feedlot market, which has an increasingly important role in filling the gap of erratic grass fed beef supply, due to seasonal variability.

“The solid feedlot demand and cattle shortage also underpinned the ongoing strong financial performance from growing out early weaned calves for feedlot entry.

“Despite paying upwards of $4.20/kg liveweight, producers who are able to provide the high nutrition and healthy environment for light calves are still being rewarded with good returns.”

‘Gross margins’ are calculated for a range of different beef enterprises as a guide to their relative profitability, and provide producers with a planning tool to evaluate their options.

The budgets are based on 100 cows or steers for breeding or growout enterprises.

Mr Andrews said while the gross margin budgets use industry standard values for fertility, mortality and other herd parameters, it was possible for individual producers to perform much better than the values presented.

“For example, the heavy vealer market in the Hunter Valley are able to sell well finished, high yielding calves for around 200kg dressed weight for significant premiums,” Mr Andrews said.

“A combination of increasingly dry conditions merging with a traditional period of higher cattle turnoff prior to winter will see prices decline in the short term. However it is likely that prices will recover during winter and early spring.”

More information

Visit the NSW DPI beef gross margin budgets.

Media contact: Anne Brook (02) 6763 1163 or 0477 358 305