1. FACTORS AFFECTING THE PROFITABILITY OF BEEF CATTLE

Traditionally in Southern Africa the beef breeding herd is maintained to utilize the veld. Unlike the U.K. where over 80% of beef is produced as a by-product of the dairy herd, the beef of Africa comes from single suckling herds (e.g. 1 calf to 1 cow) producing weaners at 6 – 7 months of age and weighing 170 – 200 kg live-mass. Herds are calved during September to November to take advantage of the summer grazing, and the weaners are sold to grazers or maintained and fattened on the breeder’s farm, or put through a feedlot.

The factors which can affect the profitability of the beef breeding herd are shown overleaf.

FACTORS AFFECTING GROSS INCOME

The profitability of the beef breeding herd depends mainly on the weaners produced by the herd; the number sold and the price received per weaner each year. These factors can be affected to a great extent by the farmer and his management of the herd.

Calving Percentage =

the Number of calves produced a year X 100

Number of cows bulled.

The ideal is for each cow in the herd to produce one calf every year, but this is seldom possible. The good farmer should aim at a calving percentage of 75 – 85%. The calving percentage for the national herd or the national average is 52% which means that, on average, cows produce a calf every other year. A good calving percentage depends on good nutrition for the cows, together with careful attention at calving time to prevent losses among newly born calves. The calving percentage is a very good indication of the general management of a beef herd.

CALF MORTALITY

Morality of calves after birth should be no higher than 3%. High calf mortality among suckling calves can be due to disease, or the calves being taken by predators or that the cows are short of milk due to poor nutrition.

SEX

Bull calves have a higher birth-mass, grow faster and weigh heavier at weaning than heifer calves, and because of these factors, they fetch a higher price.

MASS

At weaning it is important where weaners are being sold, by weight. The weaning weight of a calf is a good indication of the milking capacity of the cow. Poor milkers produce poor, underweight weaners.

BREED OR CROSS

This will be governed by locality, veld type, weaner market and the preference of the farmer. However, the crossing of an exotic bull with indigenous cows gives the benefits of hybrid vigour, better growth rates, disease resistance (especially to laminitis and eye cancer), longevity and a better quality carcass.

HEALTH

Calves offered for sale should be properly castrated, de-horned and have had any necessary inoculations such as Quarter Evil or Rift Valley Fever. Any infections should be treated at once and the calves should be kept in a healthy condition. All calves and their dams should be inspected each day, and examined carefully when they are brought in for weekly dipping.

SEASON OF SALE

Calves are weaned at 7 months, so for commercial herds calving in September/October, just before the rains begin, the time for selling weaners will be March/April. However, a common practice is to wean the calves in March/April, keep them through the Winter and sell them at the start of the following rainy season, in October / November. The farmer who buys these long weaners, can put them straight onto the veld without any supplementary feed. Sometimes weaners that are bought at the end of the summer are put into pens and fattened for 120 days before being sold for slaughter.

Figure 1: Shows gross income less variable costs giving the gross margin

REPLACEMENT COSTS

Are the costs of rearing replacement heifers for the herd. This cost can be offset by the sale of cull cows which will fetch a good price if they are in good condition. The pregnancy testing of cows after the end of the bulling season is a sound practice, so that empty cows can be identified and sold off the farm.

STOCKING RATE

This factor is governed by the carrying capacity, type and condition of the veld, amount of fencing, veld management and the availability of capital for breeding stock. If land is unlimited, the policy should be to aim for the maximum return/head with a moderate stocking rate. If land is a limiting factor, increase the stocking rate and maximise the return/ha.

The stocking rate can be used to calculate the Gross Margin per hectare for the herd.

Gross Margin per Hectare =

Gross Margin per Cow

Number of Hectares per Cow.

This figure is useful where cattle are kept on dryland or irrigated pastures because the livestock enterprise can be compared with a cropping enterprise. However, when cattle are kept on the veld, there is little point in comparing their performance with a cropping enterprise. The veld cannot be used for cropping and unless it is stocked it would not make a contribution to the farm business.

The Gross Income for a beef breeding herd is calculated from a Livestock Trading Account for the herd. The L.T.A. is covered in detail in Lecture 3 of the Farm Accounts Course.

FACTORS AFFECTING VARIABLE COSTS

TRANSPORT

Is the cost of moving cattle to the market and bringing purchased cattle onto the farm. In the case of cattle sent for slaughter, the cost of transport may be paid by the buyer. The cost of the farmer’s transport around the farm must also be taken into consideration.

FEED

Is the cost of concentrates, maintenance licks and minerals fed during the winter and salt and minerals fed during the summer grazing period. After labour, winter feed is generally the biggest single item of variable costs for a beef herd, but can be recovered through a higher calving percentage and more calves for sale at weaning.

VETERINARY COSTS, DIPS AND MEDICINES

Are the costs of dipping the cattle, visits from the vet, pregnancy diagnosis, inoculations, vaccinations, dosing’s and the treatment of disease and injuries.

FORAGE COSTS

Are the costs of grazing in the summer and hay, silage and other roughages fed during the winter.

LABOUR

The cost of herdsmen and part-time helpers who may assist with the herd on dipping days and at calving, plus the labour for feeding and maintenance of fencing, handling facilities, water supplies and firebreaks.

TRACTOR OPERATING

Is the cost of any tractor work carried out for the herd. This is generally confined to carting food around the camps during the winter, and preparing and burning of firebreaks.

FACTORS AFFECTING THE PROFITABILITY OF GRASS FED BEEF

In beef production, cattle are sold as weaners for further grazing and fattening, or they are sold fat for slaughter, usually from 2 to 3 years old. In some cases cattle are kept for longer periods before selling fat, and some farmers sell unfinished cattle to other farmers for finishing either on veld or in the pens. Whatever is the case, the growing and fattening of cattle is an enterprise which is separate from the breeding herd. The farmer with a breeding herd produces weaners which he sells to other farmers or, if he keeps the weaners to grow and finish as fat cattle, he ‘sells’ his weaners to his cattle fattening enterprise.

Figure 2: The factors affecting the profitability of grass fed beef cattle are shown below:

Figure 3: The growth rate and Daily Live-mass Gains for summer and winter for cattle sold fat at 2½ years old on good grazing with a supplement

2. MARKETING OF BEEF

Cattle for sale can be sold by various methods:

Direct sale of cattle of any age and condition or breeding stock from one farmer to another;
Sale of these through an agent from one farmer to another, where the agent will take a percentage of the sale price;
Sale by auction of breeding stock to farmers, where the auctioneer takes a percentage of the selling price;
Sale by auction of young or unfinished cattle to farmers and feedlots for fattening;
Sale of fat stock by farmers or feedlots direct to butchers and;
Sale of carcasses on behalf of farmers or feedlots from abattoirs to butchers.

Usually the price of live cattle being sold is governed by their age, weight and condition (fat cover). While the butcher wants reasonably fat cattle, the feedlot owner wants lean cattle in order to fatten them in feedlot or pens. Farmers buying young stock for breeding of rearing and fattening on grass should also buy lean, but healthy young cattle. The fatter one always look better, but usually will not perform as well as lean ones.

Cattle being sent for slaughter at abattoirs must be healthy. At most abattoirs, all carcasses are inspected by a Meat Inspector, and any diseased of worm infested carcasses are condemned.

BEEF CLASSIFICATION SYSTEM

There are various classification systems for beef carcasses throughout Africa. These are generally based on fat cover and age. An ideal fat cover is usually taken as 7mm of fat over the eye muscle. Tenderness of the meat decreases with age of the animal, so a milk tooth animal is tenderer than an animal with 6 permanent incisors.

Figure 4: The different cuts of meat taken from the carcass of a steer.

Source: ozarksnaturalbeef.tripod

Economics and Marketing