Gross margins are calculated for a range of different 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 growout enterprises.

When compared to last year, NSW DPI Beef development officer Todd Andrews said beef gross margin returns had increased by 10 per cent on average.

“Gross margin returns for weaner and vealer producing enterprises increased by 13%, due to the high demand from producers trying to restock following the previous drought years,” 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.”

Andrews said a combination of increasingly dry conditions and a traditional period of higher cattle turnoff prior to winter would see prices decline in the short term.

However, prices are likely to recover during winter and early spring.

“The solid feedlot demand and cattle shortage also underpinned the ongoing strong financial performance from growing out early weaned calves for feedlot entry,” Andrews said.

Despite paying upwards of $4.20/kg liveweight, Andrews said producers who were able to provide a high nutrition and healthy environment for light calves were being rewarded with good returns.