Buying the right store animal at the right price, keeping a tight control on costs and sharing a portion of the profits with two local breeders are all factors helping Guy Lee prepare Sandystones Farm for the future.
Guy Lee dispersed his suckler herd in 2009 after deciding his farm, near Jedburgh, Scottish Borders, was more suitable for a specialised finishing enterprise.
He now sources 12 to 18-month-old store cattle both through auction marts and privately, with about 30 per cent acquired through an arrangement with a couple of breeders in the region who deliver the steers weighing 350-500kg with Mr Lee then responsible for all inputs.
About 400 head are finished each year, with animals sold deadweight almost exclusively through Dovecote Park to the Waitrose supermarket chain.
He says: “The cattle I buy privately are taken on what could be described as a contract-finishing arrangement.
“There is no formal paperwork and either party can withdraw at any point as I believe this type of agreement should be based on trust. One arrangement has lasted for 15 years and the other for three years without any problems.
“The breeder receives a partial payment when the cattle arrive and I provide all ongoing inputs, also covering any losses, although these are extremely rare. The end price is divided proportionately, so if an animal weighs 450kg on arrival and leaves at 675kg, for example, the breeder receives two-thirds of the end price and I receive one-third.
“The breeder gets the benefit of access to a premium price scheme, with greater marketing potential as I sell regularly in batches of 15-20, while they would mostly be dealing with smaller numbers.”
Most of the remaining 70 per cent of cattle are sourced by a professional buyer at local livestock auction marts. Mr Lee believes the live auction system must be supported to maintain a base price for the cattle industry, although some come direct from local breeders. These are bought mainly from February until May and spend a summer at grass, unlike the heavier arrivals in autumn.
Mr Lee says: “My buyer knows I am looking for cattle which are not too close to finishing, with a good frame and length.
“It is not difficult to find the type I want and I appreciate store producers must make their margin to make the system work.”
Spreadsheets are used extensively to monitor animal performance and making sure costs are kept to a minimum. This management technique is supported through the use of EID tags, which are reused by clearing the data each time an animal is sold. The farm has to submit the number of cattle which will be finished in the next 12 months, so demand can be matched with supply.
The total mixed ration (TMR) is used across all classes of stock and for the past five years has been offered through the Keenan Pace feeding system.
By transferring ration formulation data wirelessly to a receiver on the mixer wagon it ensures individual ingredients are weighed precisely and dictates the number of rotations required to combine feedstuffs effectively.
Mr Lee describes Pace as ‘incredibly accurate’ and says it greatly increases ration consistency, especially on a farm where more than one operator is responsible for cattle feeding. It takes one man an hour a day to feed the cattle and bed up using a straw blower machine.
A key ingredient of the TMR is wholecrop rye, a crop which is rated highly. This year Mr Lee harvested the variety Magnifico.
He says: “I have been growing rye since 2014. It is a high-yielding crop with excellent starch levels although it is susceptible to brown rust, so a fungicide is applied as a preventative measure at about growth stage 31.
“Wholecrop rye is taken at 40 per cent dry matter at a cost of about £30/tonne, which compares favourably with wholecrop barley at about £40/tonne. It is a competitive plant and yields have been as high as 50t/hectare, with a figure of about 38t/ha in an average year. Admittedly, the seed is more expensive, but it is used at a lower rate compared with other cereals.”
The 2016 rye crop was so successful the small acreage of grass silage which was cut was not used and Mr Lee has altered the ration for some of the housed cattle to use it up over summer.
In fact, grass silage has almost become redundant and its role has changed, it is now considered primarily as a break crop. However, the same standpoint does not apply to grazed grass.
“Grazed grass is the cheapest feed at a cost of 33p/head/day. I have worked out the 80 cattle grazed last summer put on 9,000kg in total. Assuming a value of £2 for every kilo of weight, this equates to £18,000-worth of weight gain off grass without any supplementary feeding. The cost of rented land, fertiliser, labour and transport have to be deducted of course, but it is still the most profitable way to grow cattle.”
Other ration ingredients include home-grown barley and a vitamin and mineral mix with a rumen buffering product to reduce the risk of acidosis. The TMR also contains pot-ale syrup.
“I think pot-ale syrup is an excellent product, mainly as it helps bind high dry matter ingredients together. It is becoming harder to find and has also risen in price, mainly because the distilleries are installing anaerobic digester plants and using it themselves.”
Stock are vaccinated against IBR at a cost of about £4/head, an investment which Mr Lee feels is justified due to the mixing of cattle from multiple sources. Tip-over water troughs are provided for housed cattle and these are cleaned daily, with rock salt provided to encourage intakes. A semi-circular, external handling facility has been installed to increase operator safety.
Having achieved a weight gain of 1.5kg/day, cattle leave the unit at an average 685kg aged 20 months. All the animals forward achieve the premium rate, with 65 per cent classified R4L, 15 per cent U grade and the remainder at R4H.
Mr Lee says: “The fundamental principle of making money from cattle is to buy the right cattle at the right price. One of my challenges is to produce an all-year-round supply from animals which have been born in March, April and May. This fits in with buyer requirements and eases my cashflow, as well as making sure the buildings are used to full capacity.
“There are challenges ahead for the beef industry, with farm support under threat and a change in consumer eating habits. But beef is a highly versatile meat and we have to maintain quality and produce as efficiently as possible. My son, Hugo, who is working as a farm manager, will shortly be returning home, at which point we plan to re-evaluate our business model.”
Finishing Ration – 575kgs +