Why Margin Beats Price

Why Margin Matters More Than Price for British Livestock Farmers

British cattle prices may be high at present, but what truly matters is whether margins are rising too. With input costs soaring, a record farmgate price doesn’t guarantee profitability. At Warrendale, we regularly seek to understand the cost of production for the supply chain and so we are aware how much protecting margins, whilst still operating the best health and welfare protocols is key.

Have Margins Grown Alongside Cattle Prices?

Farmgate beef prices reached a record 630 pence per kilo in February 2025—some 25 % higher than a year earlier ¹. Yet retail price hikes (mince up 5 %, roasting joints up 17 %) signal pressure both upstream and downstream ¹.

Meanwhile, input costs have skyrocketed: feed, fertiliser, fuel, veterinary services, electricity and bedding are up an average of 39–44 % since 2019 ²³⁴. For example, CAN fertiliser rose from £200 to £900 per ton—an astonishing 350 % increase—and feed rations increased around 35 % ⁴

These data points underscore a critical question: is increased output revenue enough to offset soaring costs and deliver a stronger margin?

Evidence: Top Performers Thrive by Focusing on Margin

AHDB’s Farmbench analysis for 2023–24 shows top 25% of suckler herds achieved a net margin of £158.63 per cow put to the bull, while the middle 50% lost £238.98/cow and the bottom 25% lost £960.54 ⁵. This stark contrast proves price alone isn’t enough—efficient cost management is the real differentiator.

In earlier years, 2021–22 data revealed:

Top performers in youngstock beef made a net margin of £192 per head, compared to losses of £127 and £750 in the middle and bottom quartiles respectively ⁶.

Similarly, suckler herds in the top quartile achieved £76 profit per cow, versus a £347 average loss for the middle group ⁶.

Top farms had significantly lower cost of production per kg—just £2.20–£2.30, compared to £2.65–£3.90 for lower performers ⁶.

Examining finishing enterprises (2022–23), the top 25% realised a net margin of £0.30 per kg liveweight, while the middle and bottom groups lost £0.16 and £0.86 respectively ⁷.

These figures underline that low costs of production—not just high prices—drive profitability.

Supply-chain solutions

One of the real advantages of being in a fully-integrated supply chain is that there are ways to help improve margins, and move the focus away from price.

Warrendale offers a number of ways to really help improve productivity and reduce costs to the farmer.

• Buying groups
• Health Strategy Group
• Knowledge Transfer opportunities
• Cost of production exercises

Buying Groups:

Warrendale uses group buying to get the best price for goods and then distributes them to farmers. For example, there are buying groups for both milk and straw. Farmers can order supplies through Warrendale directly.

Health Strategy Group:

Of course, the key to productive animals and therefore a profitable livestock farm is high health. The higher the health, the better the growth rate and the fewer the emissions. It also means better fertility rates and easier lambing or calving. Warrendale focusses on high health through its dedicated health group, which brings in a range of experts, such as nutritionists and vets.

Knowledge Transfer:

Farmers get out the most of the supply chain when they engage in knowledge transfer opportunities. Warrendale offers events (both in person and online) during the year, that aren’t just an opportunity to get updates from the company, but are also a chance to share best practice.

Cost of Production:

Warrendale’s focus on fairness and transparency for the supply chain, also includes a cost of production approach to the way it works with farmers and retailers. By truly understanding the cost of production for each stage of the supply chain, Warrendale ensures farmers receive fair reward for their hard work. The exercise also identifies key areas of focus to help margins for parts of the chain.

On-Farm Strategies to Improve Margins

1. Benchmarking Costs & Using Farmbench

• AHDB’s Farmbench is useful to compare your cost of production, profit margins, and spending patterns with national averages. Outliers, like high feed, labour or machinery costs—become visible and actionable ⁶.

2. Efficient Feed & Forage Management

• Use forage from high value sources, such as multi-seed swards.
• Get your forage analysed so you know how best to utilise it and whether you need to introduce any further feedstuffs.
• Get advice from a nutritionist on the best rations depending on what stage of the supply chain you are managing. Warrendale’s nutritionist, Lizz Clarke, offer nutrition advice to Warrendale farmers through 1:1s or workshops throughout the year.

3. Rotational Grazing

• Consider rotational grazing for when cattle are out to pasture. This method reduces feed, fertiliser, and labour inputs by allowing pasture regrowth, improving nutrient cycling, reducing weeds, and decreasing the need for external fertilisers ⁹.

4. Genetics, Health & Nutrition Investment

• At Williamswood Farm, gross margin stood at £804 per cow, 63% above the English average. The “golden triangle” of high-index genetics, proactive health protocols, and tailored nutrition made all the difference ¹⁰. This is also something promoted at Warrendale farms, with carefully selected genetics, working alongside Genus, breed-specific protocols and nutritional advice: all helping farmers maximise the productivity of their Wagyu herd.
  • Effective health planning (e.g. tackling BVD, IBR, Johne’s) saved £5,000 in losses for every £1,000 spent ¹⁰.

5. Grassland & Machinery Efficiency

For the past two years, Warrendale has been looking at cost of production to understand how it can best farmers maximise its margins.

• Top farms invest more in grassland—regular reseeding, soil sampling, balanced nutrient applications—to maximise forage yield and reduce dependence on bought-in feeds ¹¹.
• Poor performers often have excessive machinery. In some cases, contracting services can be more cost-effective, especially for small farms ¹¹.

6. Optimising Stocking Rate & Output per Hectare

• Increasing pounds of beef per hectare dilutes fixed costs. Farms producing ~800 kg/ha can handle higher variable costs yet maintain stronger margins than low-output systems ¹².
• A farmer noted that moving 100 cattle yields far higher labour ROI than moving 20, because the work to manage cattle is not exponential the more cattle you have ¹³.

7. Breed Selection & Extended Grazing

• Some UK farms are embracing hardy, efficient breeds—Shorthorn, Angus, Salers—that offer fertility, forage adaptability, and lower maintenance cost. For Warrendale the focus has been on a breed that is robust, really easy to handle and with predictable and reliable fertility cycles and gestation periods.
• Extended grazing or “outwintering” keeps cattle out longer, reducing feed and housing costs ¹⁴ if your set-up and cattle allow.

Conclusion

High cattle prices present an opportunity—but they’re not enough to secure profitability if input costs have soared in tandem. The data is clear: top-performing farms are those focusing on margin, not just price. By benchmarking performance, reducing input costs via smarter feed, grazing, genetics, and grass management, and improving output per hectare, farmers can bolster resilience—and genuinely increase net returns. Take these on-farm strategies with Warrendale’s integrated supply chain approach, and you might just have a recipe for success.

Interested to know more?

Contact us to find out if Wagyu could be a perfect fit for your farm.

References

1. The Sun – Record Farmgate Beef Prices
2. https://www.thesun.co.uk/money/33405159/shoppers-grocery-staple-soars-price-record-farmers-beef/
3. The Dairy Site – Rising Input Costs
4. https://www.thedairysite.com/news/uk-farm-input-costs-rise-sharply-over-past-five-years-ahdb
5. The Beef Site – Rising Input Costs
6. https://www.thebeefsite.com/news/uk-farm-input-costs-rise-sharply-over-past-five-years-ahdb
7. Ulster Farmers Union – Beef Production Costs
8. https://www.ufuni.org/beef-production-and-rising-input-concerns/
9. AHDB – Top 25% Suckler Herd Margins 2023–24
10. https://ahdb.org.uk/news/farmbench-for-better-margins-what-set-the-top-25-of-suckler-herds-apart-in-2023-24
11. AHDB – Knowing Your Cost of Production 2021–22
12. https://ahdb.org.uk/news/farmbench-knowing-your-cost-of-production-can-help-your-business-in-the-future
13. AHDB – Finishing Beef Cost of Production Benchmarks 2022–23
14. https://ahdb.org.uk/beef-cost-of-production-benchmarks/Finishing
15. Business Wales – Graianfryn Beef Finishing Review
16. https://businesswales.gov.wales/farmingconnect/final-update-graianfryn-beef-finishing-enterprise-review
17. Wikipedia – Rotational Grazing
18. https://en.wikipedia.org/wiki/Rotational_grazing
19. Farmers Weekly – Maximising Beef Margins
20. https://www.fwi.co.uk/livestock/beef/beef-focus-farm-reducing-waste-maximising-beef-margins
21. AHDB – Key Comparisons Between Top and Bottom Performing Farms
22. https://ahdb.org.uk/key-comparisons-between-beef-and-sheep-top-and-bottom-performing-farms
23. The Cattle Site – Increasing Beef Farm Profits
24. https://www.thecattlesite.com/articles/2534/increasing-your-profits-from-beef-farming/
25. Reddit – Farmer Discussion on Efficiency
26. https://www.reddit.com/r/farming/comments/1djs8dt
27. Farmers Weekly – Understanding Cost of Production
28. https://www.fwi.co.uk/livestock/british-beef-farms-must-understand-cost-of-production