Basically, a budget should be used to determine whether an animal is better off sold now, or at a later date, allowing you to make an informed decision on when to market your cattle. It is important to note that this is based solely on an estimated sale weight, performance and price. In addition, it will only be as accurate as the figures you use, so include realistic sale prices and weights.
The budget should include the basic costs involved in keeping the animal until its sale date. The starting point should be the present value of the animal, e.g. 450kgs at €2.30/kg = €1,035 on 30th November. The next step should be to set a target sale date e.g. 1st March. The period of time between these two dates should be used to calculate a final liveweight when selling the animal, e.g. 90 days at 0.7kg/day = 513kg. You will also need to include how much feed you intend to use over this period and the cost of this feed, e.g. 30kg silage per day at €30/tonne and 2kg ration at €260/tonne. You should include the animal’s purchase price, or rearing cost, for the year. A profit margin can also be added in. Adding these costs together will give you the required sale value needed to break even next spring. You can then make the decision to sell now or feed on. Remember the implications that holding cattle may have on cash flow on the farm.
(Source – Irish Farmers Journal – Kieran Mailey (Page74) – Saturday, 30/11/2013)