In the last 10 years, improved efficiency on beef farms has generated a 30% increase in profits and reduced reliance on support payments by 6 percentage points. This fact was presented by Teagasc beef specialist Alan Dillon at the Teagasc Beef Conference in Mayo on Tuesday night.

Difficult sell

He admitted that “given the current climate within the sector, pushing efficiency is a difficult sell”, but he went on to say efficiency “is one of the only aspects that remain within the farmers control”.

Analysis was carried out on the top top-third of suckler to beef farms in the profit monitor data set for the years 2008 to 2018. These are arguably the most progressive beef farmers in the country and were therefore used to quantify the effects of improving efficiency.

The results presented showed that, when adjusted for beef price increases, the top-third of beef farmers in the country have increased their net margin from €293/ha to €380/ha for the period 2008 to 2018.

In the same time period, premia, as a percentage of total farm profit, has reduced from 63% to 57%.

Underpinning this overall increase was a clear improvement in on-farm performance.

Alan Dillon of Teagasc.

Stocking rate on these farms has risen from 1.95LU/ha to 2.26LU/ha – an increase of 16%.

This has resulted in a 31% increase in liveweight output per hectare and a gross output increase of 60%.

Grassland management, herd fertility and herd health were identified as the three most important areas for farmer to improve.

Widening gap

Dilllon said: “Teagasc have been completing Profit Monitors since 2002 and have amassed a good deal of data over this period.”

One worrying aspect from the analysis showed that the gap between the top third of farmers and the bottom third of beef farmers has widened. He concluded that: “Farmers who have improved their levels of technical efficiency have been rewarded with greater profitability, relative to those who have not.

"Although beef price will remain the main driver of profitability for beef farms, it is important to recognise that levels of technical efficiency also play an important role.”