The vexing question of when best to sell cattle, and in particular weaned calves, was a major talking point at the recent monitor farm meeting in Orkney.
Millburn Farm, run by Steven Sandison, is in the parish of Harray, on Orkney’s mainland. The farm extends to 230acres while a further 100 acres is taken on a seasonal let basis. The farm is mostly comprised of permanent and temporary grass and stocking consists of 100 Simmental cross and Saler cross cows with Saler, Simmental and Charolais bulls all being used.
The Sandisons have always sold calves at weaning, wintering only the replacement heifers and the dry cows. This is very unusual in Orkney where most cattle are wintered and sold either as forward stores or taken through to finishing.
Uniquely, the calves from Millburn are sold privately to two local buyers making it possible to follow 24 Charolais heifer calves through to eventual sale. Eight of the calves are sold in the spring with the rest sold in September.
“By calculating gross margins for these batches of cattle it was possible to determine what the physical and financial performance of these cattle would have needed to be in order to ensure a return to the farmer,” said monitor farm facilitator, George Baikie of SAC Consulting, part of SRUC.
The calves produced at Millburn compared well with the average figures for Scotland published in the “Cattle and Sheep Enterprise Costings” produced each year by QMS.
The total output per cow for Millburn at £541 was just above the average which, when set against low variable costs of £202, placed Millburn comfortably into the average bracket at £339/cow.
After the calves left Millburn the costs of wintering meant that the heifers sold in the spring actually lost £43. To have broken even they would have needed to have been 20kg heavier at £2.10/kg. It was pointed out, however, that in reality these were the smallest of the calves and the sale date chosen may not have been the most lucrative last spring.
The remaining 16 heifers were all were sold in September and realised a positive margin of £167/hd. The rise in the general prices for stock will have contributed to this but analysis shows that even if the market had been static they would have realised a margin of over £100/hd.
Three key messages were taken from the meeting, said Mr Baikie. “The first was that overwintering cattle is an expensive business and that the performance of the cattle is critical in this period if a positive margin is to be made.
“Secondly, while cattle should be able to perform well at grass, the margins are still tight and care needs to be taken to ensure margins remain positive.
“Finally, it is easy to ignore the effect of the general market, but the fluctuations within this must be factored into financial determinations with regards to output. However, this should not be used as an excuse to disguise poor physical performance.
The Orkney monitor farm is funded by Skills Development Scotland, run by NFU Scotland and supported by Quality Meat Scotland. Full reports of each meeting can be found by visiting www.qmscotland.co.uk
Further information is available from the monitor farm facilitators George Baikie and Graham Scott of SAC Consulting, a division of Scotland’s Rural College (SRUC). They can be contacted on 01856 872698.