Arable Farmers Look to Beef Finishing as Scottish Herd Shows Signs of Stabilising

Scottish arable farmers are showing growing interest in cattle finishing as they look to add value to home-grown grain, while the decline in the country's beef breeding herd begins to slow.

 With grain prices under pressure, some arable businesses are considering whether feeding cereals to cattle could generate a better return than selling them. At the same time, the latest figures from Quality Meat Scotland show that the decline in Scotland's beef breeding herd has slowed to its lowest rate since early 2022.

 Adam Galbraith, Agriculture Director at Virgin Money, says the combination is creating opportunities, but farmers need to look closely at the costs before entering or expanding a beef enterprise.

 "Arable farmers are used to working out the best return for their crops, and with the loss of malting barley premium in recent times along with volatility in cereal prices depending on the fluid state of play with Black Sea exports, it is understandable that some are looking to cattle finishing for a solution. Feeding home-grown grain can be a way of adding value on the farm, particularly where suitable buildings are already available."

 "But cattle bring a different set of demands. The price paid for stores, their performance, housing and labour will all affect the final margin. Farmers also need to account for what they could have earned by selling the grain."

 Store cattle remain in tight supply and prices are strong, providing welcome returns for suckler producers but making the decision to buy cattle more difficult for finishers.

 "For someone breeding and selling stores, the market has been encouraging," says Adam. "For someone buying those cattle to finish, it can be a very different calculation. A strong finished price is only part of the story if the cost of the animal has already taken up much of the potential margin."

 Some finishers are looking beyond traditional continental-bred stores, including at Wagyu cattle available through specialist supply arrangements. Adam says the strength of any such proposal depends on understanding both the production system and the buyer's requirements.

 "Wagyu may offer an option for a farm with a secure route to market, but the cattle can take longer to finish, and returns depend on meeting the required specification. It needs to be budgeted as a specialist enterprise, rather than assumed to be a cheaper way into beef finishing."

 For the wider Scottish beef sector, the slowing decline in breeding cow numbers is a welcome change after several years of contraction. Quality Meat Scotland's figures also show more cattle approaching slaughter age on Scottish farms than a year ago.

 Adam believes the improving outlook could give established beef farmers greater confidence to consider investment in breeding stock, housing, handling facilities and grazing improvements.

 "Farmers who have held back on investment may now feel more able to look at what their business needs. Better facilities or herd improvements can help productivity, but the borrowing still has to be affordable if cattle prices ease or costs rise.

 "We would encourage anyone considering an investment, or an arable farmer thinking about introducing cattle, to speak to their lender early. A clear budget, realistic cashflow forecasts and an identified market for the finished cattle will help show whether the proposal works for the whole farm business."

 Adam says there are grounds for cautious confidence, while recognising that the benefits of a stronger cattle market are not shared equally across the supply chain.

 "Scottish beef farmers have faced a difficult few years, so signs that the breeding herd is moving towards stability are encouraging. The opportunities are there, both for established producers and for arable farms looking at finishing but knowing your costs will be every bit as important as knowing the sale price."