In spring 2011, the early maturing dairy calf-to-beef study was established at Johnstown Castle for research and demonstration purposes. This is the first of its type, a joint programme between Teagasc, the ABP Food Group, Certified Irish Angus Beef, Irish Hereford Prime, Irish Angus Cattle Society Ltd and the Irish Hereford Breed Society.

The aim of the work was to demonstrate low input profitable production systems for Angus and Hereford-sired heifers and steers. It is also focused on delivering a high-valued product that is available to the market on a year-round basis.

The programme is led by Teagasc researcher Rob Prendiville and, with two production cycles fully complete, we discuss performance on the unit and financials to date. We also look at the opportunities and challenges to successfully running a traditional dairy calf-to-beef enterprise.

Early maturing systems

With the seasonal spring-calving nature of the Irish dairy herd, providing a year-round supply of beef is reliant on slaughtering animals at different ages.

In this context, the Johnstown study looked at the performance and financial returns achievable from February and April-born early maturing crossbred heifers and steers. The heifers were slaughtered at 19 and 21 months, while the steers were killed at 21, 23 and 26 months.

The target with all of the finishing systems is to make maximum use of grazed grass.

Reducing the age of slaughter by finishing off grass, thereby eliminating the need to winter finish, is also an interesting comparison being investigated.

Heifer systems

  • February-born heifers are slaughtered directly off grass alone at 19 months, or they will remain at grass until November and receive 2.5kg of concentrate supplementation at pasture for the final 60 days before slaughter at 21 months.
  • Heifers in the 19-month production system were 454kg at slaughter, yielding a carcase of 228kg. Liveweight and carcase weight for heifers in the 21-month production system were 471kg and 238kg, respectively.

    • The carcase conformation for heifers in both production systems was predominately O=/+, with carcase fat classes of 3=.

    Steer systems

  • A percentage of February-born steers are slaughtered in November at 21 months of age. These animals will be finished off grass and supplemented with 2.5kg concentrates for the final 60 days pre-slaughter, thereby removing the need to house for the second winter. The remaining February-born animals will be finished indoors on ad-lib silage and 4kg concentrates per head and slaughtered at 23 months of age.
  • Liveweight and carcase weights of 533kg and 277kg, respectively, were achieved for steers in the 21-month production system. Liveweight at slaughter of 581kg and a carcase weight of 293kg was achieved in the 23-month production system.

    • The April-born steers are slaughtered at 26 months of age. This group will be stored over the winter on ad-lib silage and 2kg concentrates.

    They will be turned out to grass in early spring and slaughtered off grass in June at an average age of 26 months and a target carcase weight of 320kg. The carcase conformation for steers in both production systems was predominately O=/O+, with carcase fat classes of 3=/+.

    With two production cycles complete, the physical performance of the animals on the demonstration unit is impressive.

    The performance targets have been readily met, in all cases, and exceeded in some systems. There was a typical growth rate of 0.75kg to 0.90kg per day in the first season and 0.95kg to 1.10kg per day in the second season at grass. Given the low level of meal input and the animal type, this growth performance is impressive.

    Rob explained that to maintain these targets, farmers have to be “adaptable, flexible and respond to changes in weather conditions and grass supplies”.

    Current performance

    Performance of 2013-born Angus and Hereford steers and heifers is shown in Table 1. According to Rob, animals have exceeded key performance targets, aided by favourable conditions this year, and are on course to meet and, in many cases, exceed target carcase weights.

    Performance during the first winter was also excellent for dairy beef systems, with animals receiving no check in performance. According to Rob, keeping animals thriving at all stages is vital to achieve targets in the system. Grass management and harvesting high-quality silage is central to this. From now on, animals will be transferred onto their finishing diet. It is also important to note that grass supplies are being monitored weekly and this will form the basis of decisions this autumn. Grass supplies are very favourable but, if grass supplies tighten significantly in the coming weeks, a decision may be made to house 2014-born animals earlier than planned to ensure sufficient grass is available to finish 2013 steers and heifers off grass.

    Financial returns

    Financial analysis to date indicates that the more extensive forage-based systems (grass-based finishing) offer the best returns. The 21-month heifer system and the 26-month steer systems have come out on top and are returning the highest margins.

    As reported at last year’s Teagasc national beef conference, a well-run early maturing production system has the potential to yield gross margins of between €1,350/ha and €1,650/ha. This compares favourably to suckler systems, where comparable gross margins of €1,089/ha and €809/ha were achieved for the top 10% and top one-third of producers.

    The greatest factor affecting the profitability of these systems is beef price.

    Over the past year, with beef price falling by 50c/kg to 60c/kg, a reduced margin can be expected from this year’s cycle. Projections would indicate that, for every 10c/kg fall in beef price, the margin per head reduces by €23 to €30. Taking this into account, the system is looking at a fall in margin of €120 to €150/head or a €360 to €450/ha reduction in gross margin.

  • When operated at high stocking rates and achieving high output per hectare, traditional dairy beef systems can be one of the most profitable beef systems for farmers. Even at current beef prices, such systems will yield a gross margin of at least €1,000/ha.
  • These systems can be operated to complement existing farm enterprises and have the potential to significantly increase farm output without requiring significant capital investment.
  • Compared with dairy bull beef, performance targets appear to be more consistently achievable. Within the system, there is also more flexibility to sell stock early and target various markets.
  • Having more than one sale date in the year improves cashflow and doesn’t expose the producer as much as bull systems, for example.
  • Given that nearly 75% of lifetime gain (in some systems) is achieved from grass and lifetime concentrate input is as low as 250kg, these systems are generally immune from shifts in concentrate prices.
  • Strong retail market where Hereford and Aberdeen Angus breed specific demand is growing, especially in Britain. Carcase also fits the desired retail specification.
  • Compared with suckler beef production, dairy beef can be produced at a lower cost, both economically and environmentally. The main advantage is that the overhead cost of the cow is borne by the dairy industry and not the dairy beef system.
  • Good utilisation of pasture and focusing on high output per hectare is fundamental to the profitability of these production systems and will determine whether impressive gross margins of the early maturing systems can be realised.
  • Taking a high stocking scenario of 200kg organic N/hectare and assuming excellent levels of grass utilisation, the farm would need to grow 10.1t DM/ha and 11.6t DM/ha. At 225kg organic N/ha, this rises to 11.3t and 13t DM/ha, respectively.
  • If demand for traditional animals increase, will there be some control on calf price? Teagasc data clearly shows that a €50/head increase in calf price would decrease gross margin by €150/ha to €190/ha.
  • The main factor affecting the profitability of these systems is beef price. Variations in beef price have the potential to significantly alter the profitability of these systems.
  • The bonus payments from the producer groups make a significant contribution to the overall margin. Will a rise in the number of the traditional breeds in the future erode some of the current bonuses that are in place today? For the early maturing heifers or steers, the bonus payment is worth approximately €60 to €95/head, the equivalent of around €200/ha to €300/ha. This level of bonus will need to be preserved if traditional dairy beef systems are to remain profitable.
  • Using the programme as an example, could an integrated supply chain be created between retailers, processors and producers? This not only would maintain product quality but it could also manage problems, such as the seasonality of supply.