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Latest NSW beef gross margin budgets reflect strong industry

by Beef Central, 15 March 2017
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DESPITE challenging seasonal conditions, returns for NSW beef enterprises remain strong in 2017, as indicated in the latest NSW Department of Primary Industries beef gross margin budgets.

Todd Andrews

Todd Andrews

NSW DPI beef development officer, Todd Andrews, said compared to 2016, beef gross margin returns had increased by ten percent on average, although not all beef enterprises increased by the same amount.

“Gross margin returns for the state’s weaner and vealer producing enterprises increased by 13pc, 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,” Mr Andrews said.

Gross margins are calculated for a range of different NSW 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 backgrounding/growing 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 is able to sell well-finished, high-yielding calves for around 200kg dressed weight for significant premiums,” he 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.”

 

The NSW DPI beef gross margin budgets are available on the DPI website, click here. 

 

 



Reader's Comments


Comment
  • charles nason March 15, 2017

    Before we get carried away , we need to remember that GM is only a interim measure , Net Profit is GM minus fixed or overhead expenses
    There is a big backload of accumulated debt and delayed maintenance which has to be allowed for at some stage
    Thus we could ask what the real actual net profit trend is . This would be seen in the bank balances
    How many “healthy” balance sheets are there

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