In Romania there are large areas of unused pasture, which are well suited for the meat breeds and the geoclimatic conditions are favorable for beef. The beef breeds are more profitable than the milk ones. They have a yield of 65-70% cut, the meat quality is very good and the animals are not at all pretentious for food, they consume all plant debris. One advantage is that the growth rate of animals is faster, a calf, for example, can reach in 15-20 months at a weight of 550-650 kg

Chetroiu, Rodica

Iurchevici, Lidia

Munich Personal RePEc Archive

MPRA
Munich Personal RePEc Archive
The economic efficiency of beef cattle in
extensive system
Lidia Iurchevici and Rodica Chetroiu
Research Institute for Agriculture Economy and Rural Development,
Research Institute for Agriculture Economy and Rural Development
20. November 2014
Online at http://mpra.ub.uni-muenchen.de/61775/
MPRA Paper No. 61775, posted 3. February 2015 09:12 UTC
THE ECONOMIC EFFICIENCY OF BEEF CATTLE IN EXTENSIVE 
SYSTEM 
 
IURCHEVICI LIDIA
1
 CHETROIU RODICA 
2
 
  
Abstract: In Romania there are large areas of unused pasture, which are well suited for the meat breeds and the geo-
climatic conditions are favorable for beef. The beef breeds are more profitable than the milk ones. They have a yield of 
65-70% cut, the meat quality is very good and the animals are not at all pretentious for food, they consume all plant 
debris. One advantage is that the growth rate of animals is faster, a calf, for example, can reach in 15-20 months at a 
weight of 550-650 kg. 
 
Keywords: cattle, meat, meadow, efficiency 
 
                                                                   INTRODUCTION 
 
The livestock sector in Romania has passed and still passing through a difficult situation, 
due to rising of production costs, to competition generated by imports, increasing prices for forages 
necessary to feed animals, rising prices for energy, fuel and other utilities. Currently, the beef breed 
is not very common in Romania, livestock being around 29,000 heads, meaning no more than 2.3% 
of the total number. Romania has a total area of 5 million hectares of pastures and meadows, and 
the implementation of the systems of raising beef breeds is possible in all areas of the country, 
including the mountain. 
On the other hand, the demand for beef cattle increased and is still growing, while the 
deficit is increasing from year to year. The solution to reduce the deficit of the beef on European 
market is transforming grass from Romanian pastures in beef of very good quality. 
With the disappearance of milk quotas starting the next year, Romanian farmers are 
turning to beef breeds, especially because the demand on market increased and consumers have 
begun to conscious more about the quality of this product, although the beef remains the more 
expensive. So, in Romania is a real need of raising beef cattle. If until now, most of those who have 
established beef cattle farms were oriented toward mixed breeds, particularly effective is Aberdeen 
Angus cattle breed that arouses the interest for many farmers in Romania. Beef, especially from 
specialized categories, is considered a meat considered as medicine, containing special amino acids 
and is correspondent in Omega 3 with salmon meat. One advantage is that the growth rate of 
animals is faster, a calf, for example, can reach in 15-20 months at a weight of 550-650 kg. 
The purpose of this paper is to promote the cattle breed Aberdeen Angus that are well 
suited to pasture, thus naturally achieving a beef production of top quality, with a minimum of 
concentrates feed. 
 
                                                  MATERIAL AND METHOD 
 
The paper is based on estimating the economic efficiency and profitability of raising 
Aberdeen Angus beef cattle breed, extensive operating system. This breed is more profitable than 
domestic mixed breeds, the beef quality is very good, has an efficiency of 65-70% cut, the ratio 
meat / bone is 5: 1 and the animals are not at all pretentious for food, they eat all the vegetal debris. 
The ideal place for raising beef cattle is hilly mountain area and where the owners of agricultural 
land do not cultivate these areas. 
 
                                                 
1
 Eng. Iurchevici Lidia – Scientific researcher III, Research Institute for Agriculture Economy and Rural Development, 
e-mail: lidia.iurchevici@iceadr.ro 
2
 Eng. Chetroiu Rodica – Scientific researcher, Research Institute for Agriculture Economy and Rural Development, e-
mail: rodica.chetroiu@iceadr.ro 
 
 
                                                RESULTS AND DISCUSSIONS 
 
The establishment of farms for raising and fattening cattle from mother cows specialized 
for beef is a profitable activity, which contributes to increased income from this activity, when 
seeking to obtain the greatest possible quantity of meat in a short time, with high quality and at a 
lower production cost. 
Calculations have studied a module of 50 head of steers, obtained from mother cows of 
Aberdeen Angus breed, whose fattening take place on pasture reseeded and plotted, with addition of 
concentrate fodder with PVM, ensuring the achievement of weight gain of about 1200 g / day / head 
and a delivery weight of 550 kg / head. The start of fattening is at a weight of about 200 kg / head, 
until this weight the calves growing near mothers (approx. 5-6 months), all production of milk 
being used only for breastfeeding. Along with feeding with mother’s milk, the daily ration of calves 
are gradually introduced different kinds of feed (concentrate, fiber, green forage), in accordance 
with age. During this period is given food ad libitum, consisting of 20% chopped hay, 50% juicy 
feed and 30% combined feed. The completing of the food is made with a protein - vitamin - mineral 
supplement introduced into mixture. In the success of fattening an important role is of proper 
feeding of calves with mixed feed administrated ad libitum, providing fresh water, salt and 
microelements bricks for licking. 
Fattening in extensive system can take place in several variants: only on pasture, on 
pasture with addition of green forage from conveyor, on pasture with addition of concentrated 
supplements, on green forage cut with addition of concentrates etc. Whichever chosen variant, will 
meet daily some methodological indications: 
 daily ensuring the mineral supplement required in food, consisting of calcium and salt; 
 providing water sources on pasture, bowers and troughs needed to ensure the supplement of 
concentrate food; 
 grouping animals on pasture on sex and lots, parceling pastures (grazing a plot not being 
indicated more than 7 days, and during the day of 12-14 hours). Raising is profitable only if the 
farm has enough land for grazing, but it should be noted that the pasture is not sufficient without 
over-seeding with clover, trefoil and grasses like fescue, Lolium etc. 
 On a cultivated pasture, the daily gain may be between 1 and 2 kg. In these conditions, 
feeding costs have the largest share of the cost of meat, about 64% of total expenditure, while the 
remaining costs are represented by the value of biological material (22.8%) and other expenses with 
inputs (medicine, energy and fuels). It is worth noting that, of the total, about 3.9% is the labor 
costs, since this operating system does not require special care of animals (Table 1). 
Table 1 – The estimate of costs of Angus beef breed 
        
Average production 1200 
g/day 
SPECIFICATION QUANTITY   COSTS 
    M.U. 
M.U./hea
d   Lei/head/year 
     Quantity Price  lei/M.U. 
1. Fodder costs     3636 
Hay   kg 1665,00 0,40 666 
Green forages kg 6300,00 0,1 630 
Juicy forages   kg 4500 0,2 900 
Concentrates + PVM kg 1200 1,2 1440 
2. Biologic material kg 200 6,5 1300 
3.Energy and fuel, of which    94,2 
Energy   
kW/yea
r 60 0,57 34,2 
Fuel  l/year 10 6 60 
4. Medicines and sanitary materials, of 
which: lei   16,00 
Mandatory actions lei   10,00 
Necessity actions lei   6,00 
5. Other material costs lei   20,00 
6. Supply rate lei   123,8 
7. Insurances lei   45,5 
TOTAL VARIABLE COSTS lei   5235,5 
8. Labour costs lei   200 
9. General costs lei   101,3 
10. Interests for credits lei   80 
11. Depreciation lei   70 
TOTAL  FIXE COSTS lei   451,3 
TOTAL COSTS lei   5686,8 
 
In order to farm become economically viable, it is necessary to raise at least 50 head, the 
income obtained from beef cattle being more encouraging when receive subsidy. Thus, since 2012, 
the farmers from deprived areas have benefited of a financial support of 300 euros per animal, for 
the breeds with a certificate of origin. At the same time, the steers for fattening may be delivered 
out generally in countries such as Spain or Greece, at a price of over 3.5 euros per kilogram live that 
is the price of beef in Romania stores. The local producers could benefit from the deficit of beef on 
the European market (300,000 tones per year). In addition, it might find a place on the local market, 
where about 80% of consumption is ensured by imports. The estimates in this study show that the 
activity of breeding beef cattle from Angus breed is profitable (Table 2). 
 
Table 2 – The budget of beef with subsidies for deprived areas 
 
INDICATORS Average production  Lei/farm 
  1200 g/day   
  Lei/head Lei/kg 50 heads 
A. VALUE OF PRODUCTION 7270 13,2 363500 
A1. Of which, main production 7150 13,0 357500 
B. SUBSIDIES 1320 2,4 66000 
C. GROSS PRODUCT 8590 15,6 429500 
D. TOTAL COSTS 5686,8 10,3 284341,2 
D1Of which for main production* 5566,8 10,1 278341,2 
I. VARIABLE COSTS 5235,5 9,5 261775,0 
1.Fodder costs 3636 6,6 181800 
2.Biologic material 1300 2,4 65000 
3.Energy + fuel 94,2 0,2 4710 
4.Medicines and sanitary material 16,00 0,0 800 
5.Other materials + water 20,00 0,0 1000 
6.Supply rate 123,8 0,2 6190,0 
7.Insurance 45,5 0,1 2275 
II. FIXED COSTS 451,3 0,8 22566,2 
-Labour costs 200 0,4 10000 
-General costs 101,3 0,2 5066,2 
-Interest on credits 80 0,1 4000 
-Depreciation 70,0 0,1 3500 
E.TAXABLE INCOME 1583,2 2,9 79158,8 
 Taxes and duties 253,3 0,5 12665,4 
F. NET INCOME + subsidies 2649,9 4,8 132493,4 
G.TAXABLE INCOME RATE (%) 28,4 28,4 28,4 
H. NET INCOME RATE + subsidies ( %) 47,6 47,6 47,6 
COST OF PRODUCTION 5566,8 10,1 278341,2 
PREDICTIBLE PRICE ON INTERNAL MARKET 7150 13,0 357500 
    
 
The economic efficiency calculations reveal the beef cost and the profit that farmer can get 
for developing this activity, during a production cycle. Analyzing the data in Table 2, it can be seen 
that for a steer of 550 kg is spent 5566.8 lei / year and receive 7150 lei and taxable income obtained 
is 1583.2, which means a rate of taxable profit of 28.4%. By giving subsidies of 300 euro / fattening 
cattle (equivalent to 1320 lei), the net profit rate increases to 47.6%. Thus, for a 50 head farm, the 
net income plus subsidy is 132,493.4 lei / year. If the subsidy is only 450 lei / capita, net income 
plus subsidy is just, 88993.4 lei / head (Table 3). 
 
Table 3 - The budget of beef with subsidies for other areas 
 
INDICATORS Average production   Lei/farm 
  1200 g/day     
  Lei/head Lei/kg 50 heads 
A. VALUE OF PRODUCTION 7270 13,2 363500 
A1. Of which, main production 7150 13,0 357500 
B. SUBSIDIES 450 0,8 22500 
C. GROSS PRODUCT 7720 14,0 386000 
D. TOTAL COSTS 5686,8 10,3 284341,2 
D1Of which for main production* 5566,8 10,1 278341,2 
I. VARIABLE COSTS 5235,5 9,5 261775,0 
1.Fodder costs 3636 6,6 181800 
2.Biologic material 1300 2,4 65000 
3.Energy + fuel 94,2 0,2 4710 
4.Medicines and sanitary material 16,00 0,0 800 
5.Other materials + water 20,00 0,0 1000 
6.Supply rate 123,8 0,2 6190,0 
7.Insurance 45,5 0,1 2275 
II. FIXED COSTS 451,3 0,8 22566,2 
-Labour costs 200 0,4 10000 
-General costs 101,3 0,2 5066,2 
-Interest on credits 80 0,1 4000 
-Depreciation 70,0 0,1 3500 
E.TAXABLE INCOME 1583,2 2,9 79158,8 
 Taxes and duties 253,3 0,5 12665,4 
F. NET INCOME + subsidies 1779,9 3,2 88993,4 
G.TAXABLE INCOME RATE (%) 28,4 28,4 28,4 
H. NET INCOME RATE + subsidies ( %) 32,0 32,0 32,0 
COST OF PRODUCTION 5566,8 10,1 278341,2 
PREDICTIBLE PRICE ON INTERNAL MARKET 7150 13,0 357500 
 
Comparing the two variants, it can see a noticeable difference in terms of net income plus 
subsidy rate of nearly 32%, greater when granting 300 euro / per head, compared to areas where 
only grants 450 lei / head. 
  
 
 
CONCLUSIONS 
 
 Aberdeen Angus beef breed has the best growth potential in Romania (better than the 
country of origin -Scotland) in the context of drought and lack of forages. Cattle 
fattened on pasture are a good alternative to conventional fattening (fattening by 
feeding in the stable). 
 The extensive fattening of cattle reduces effort, the cattle management is simpler and 
lower cost compared to usually intensive growth. 
 Angus cattle have an increased degree of transformation natural forage, high average 
daily gain (up to 2 kg / day / head), high yield at slaughter (65-70%) and highly 
appreciated meat. 
 Also, the breed is well adapted to grazing, achieving a production of the highest 
quality meat naturally, with a minimum of concentrated forage. It is a long-live breed, 
living on average 19 years, which means 17 calves. Investments for maintenance and 
breeding are small, because it is a breed accustomed to adversity. 
 Raising Angus cattle can be an interesting opportunity for land owners who do not 
cultivate the land. 
 Given the need to increase meat production in our country, Angus cattle breed can be 
used with great efficiency in industrial crosses with our breeds, the disadvantage 
would be that they can not give the same subsidies (€ 300), as in the case of an animal 
with certificate of origin. 
 These grants are awarded following animal identification and registration in the 
schemes and support measures for farmers in Romania in disadvantaged areas (Annex 
4A-PNDR). 
 The specific support is provided in the form of additional annual payment under the 
following conditions: holding is entered in the National Register of Holdings (RNE),   
farmer to have a document certifying the meat breed / hybrid breed eligible and   
animals must be held in the farm of the beneficiary of financial support, at least a 
period of 8 months (individual farm register R1760 / 2000). 
 
                                                   BIBLIOGRAPHY 
 
1. Proiect ADER 211  - Faza 9 - Studiu privind conservarea eficienţei economice a producţiei vegetale şi 
animale, în condiţiile intervenţiilor pentru creşterea performanţelor de mediu, Bucureşti, 2014; 
2. Raport tehnic-operativ asupra situaţiei din zootehnie, 31 martie, 2014; 
3. Revista Ferma, Creşterea taurinelor în fermele organice şi în conversie, 09.02.2010; 
4. Revista Ferma, Aberdeen Angus sprijină fermierii pentru dezvoltarea acestei rase şi hibrizii obţinuţi, 
14.04.2014; 
5. Stanciu Gavril şi colaboratorii, Tehnologia creşterii bovinelor, Editura Eurostampa, Timişoara, 2005. 
 
 
 
 


The economic efficiency of beef cattle in extensive system

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