New gross margin calculations have shown that returns from NSW beef enterprises remain around average, with some minor fluctuations compared with March 2023 figures due to market conditions and rising costs.
According to recent analysis from the NSW Department of Primary Industries and Regional Development (NSW DPIRD), returns from inland weaner production increased slightly from $39.22/Dry Sheep Equivalent (DSE) to $39.79/DSE, while coastal weaners on improved pasture rose from $40.14/DSE to $41.83/DSE.
Producing feeder steers from a self-replacing herd also experienced a small increase from $51.69/DSE to $52.14/DSE. However, gross margins from growing out purchased weaner steers to feedlot weights fell from $48.61/DSE to $41.41/DSE.
NSW DPIRD Beef Development Officer Todd Andrews said this represents a decline of around $60 per steer due to lower feedlot prices and rising transport costs, which are factored into both ends of the production cycle.
"The small shifts in gross margins reflect ongoing challenges in the sector, particularly with rising freight and animal health costs, however, the solid prices for weaners and the opportunity to grow steers to heavier weights in some regions give producers a solid foundation for 2024," Mr Andrews said.
"Supported by strong seasonal conditions in the Hunter, Central, and Northern NSW, some producers in these regions may be contemplating growing steers to heavier carcase weights on pastures instead of sending them to feedlots.
"When evaluating this option, it's important for producers to ensure their steers have the right growth patterns to achieve these higher carcase weights, as the sale price per kilogram will generally be lower than feedlot markets."
"While there are opportunities to capitalise on strong seasonal conditions and the revitalised premium grassfed market, managing costs and making informed decisions about production strategies will be critical to maintaining profitability."
Branded grassfed beef markets are gathering momentum, following a slow period in 2023, providing an opportunity for producers who can finish cattle on grass to achieve premium prices.
Crossbred weaner heifers, which are currently being heavily discounted compared with steers, are particularly well-suited for grassfed markets, and producers may find it profitable to grow out weaner heifers for these programs.
Mr Andrews said the resurgence of branded grassfed programs presents a real opportunity for producers with sound record-keeping and stock management practices.
"Looking ahead, fertiliser prices have declined since last year, providing some cost relief, but transport costs have however increased.
Overall, the outlook for beef enterprises remains very positive, with export demand from the USA likely to be maintained or even boosted in 2025-26 and good seasonal conditions in many regions.
"Producers who can increase their productivity, while managing their costs and risks, will be well placed to take advantage of this increased demand in the next couple of years."
To view the full list of Beef gross Margin Budgets for 2024, please visit the NSW DPIRD website
