Predicting beef prices

Try this site for strategies to improve your overall profitability, says Greg Miles.

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Beef price predictions are an essential tool in helping to boost profitability. As Alltech president Dr Pearse Lyons says: “It’s not just about supply and demand; it’s about predicting where that demand will be and making sure that we can meet it. “The world is opening up to beef and it’s no longer enough to react; proactive production is the only way to keep up with and profit from this changing landscape.”

Developed in 2003 by farming consultant Peter Milton, the Mildex System analyses existing farming plans and develops strategies to improve the overall profit margin through changes in breeding programmes, kilogram-production rate, management techniques and market sales.

Lyons also claims to have worked out an accurate beef price prediction system that, if used wisely, can be invaluable to farmers. His statistics and predictions can be seen at www.petermilton. The statistics are updated monthly to give a forecast that allows a head start for farmers who buy and sell weaners.

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According to Lyons, the weaner budget price is derived from the weaner trends. It has been between R16 to R20 this year, and his prediction for 2014 is an average of R17,50. His forecasts run on a 36-month rolling average and are never more than R1 off.

Cash flow
Lyons also has a database and prediction for beef prices, housewife prices and lamb prices. If, for example, a bull mates with a cow on 1 November, the calf will be born in about 285 days, or 13 August. It will be weaned after 180 days or so – on 9 February.

The weaner price will be R19,50 and what Lyons calls the ‘Mildex’ will be 101. With a mass of 230kg a farmer will get R4 480 (230 x R19,50). So, for cash flow and budget purposes you will be on target for 2015, as well as 2014. In sum, Lyons says there are four selling dates – 15 January, 20 February, 25 July and 25 November.