The number of calves on the move from dairy to beef farms is set to dramatically increase over the next few weeks. When carefully planned, a dairy calf-to-beef system can complement a suckler, drystock, or sheep system quite well, in terms of the use of farm facilities, labour input and helping to boost the overall farm output.
However, calf rearing should not be undertaken without serious consideration. It takes a high level of technical skill to hit performance targets and keep mortality low. There is quite a decent level of labour required, especially during the first three weeks after calf arrival.
Perhaps one of the greatest challenges for the dairy-beef industry in the coming years will be to have a sufficient number of calf-rearing farms available, with the part-time nature of beef farms making it difficult for farmers to have the required labour to commit to calf rearing.
Sitting down and doing out a budget must be step number one. If you plan to invest money into these animals and bring them through to slaughter, you will be looking at them for at least the next 18 months and most likely up to two years.
While a few calves may seem like a small investment, when you see the costings from the Thrive demonstration farm in Table 1, you quickly realise that it will take over €1,000/head in variable costs alone to take an animal through to slaughter.
That is a long time to have money tied up in a system, so you need to go into it with your eyes open and know where performance and beef price need to be at in order to get a return on your investment.
While we cannot predict what the price of beef will be when these animals come to the point of slaughter, we can get a good handle on what price we will require to make a margin by adding up all input costs given where they sit today.
Be realistic in your costings. If your winter period is typically six months, then there is no point in costing it for four in the hopes of favourable grazing conditions this autumn or spring next year. Likewise with daily liveweight gain targets – we may aim to gain 1.2kg/hd/day at grass, but in reality, even with very good grassland management, this type of stock are doing well if they average 1kg/day during the second season at grass and 0.9kg/day during the first season.
The temptation may be there to increase concentrate supplementation rates to stock in order to improve performance. However, when you look at the economics of it, you are usually breakeven at best for this extra liveweight gain. If these systems are to stand a chance of leaving a positive margin, excellent grassland management and top-quality silage are essential.
A rotational grazing system is a must for dairy-beef. Ideally, stock would be moving to fresh grass at least twice a week. The top-performing farms in the country may be moving daily.
In terms of silage quality, you need a minimum of 70% DMD, ideally 75% DMD or above is required.
What costs to include?
Include costs such as calf purchase price, silage and meal costs, grazing costs, vet and medicine, transport and killing charges and the one that many farmers forget – a mortality cost. Unfortunately, there will be some losses along the way and these should be accounted for in the budget. Well run systems will be hitting less than 2% mortality, but if it is your first time rearing calves, a 5% figure might be more realistic.
Table 1 outlines the projected financial performance for calves purchased this spring based on performance figures from the Thrive demonstration farm over the last number of years. As an example, last year’s average calf price has been left unchanged while input prices have been updated to current figures.
As can be seen in the table, when everything is taken into consideration, it costs between €1,260/head and €1,520/head to take these animals through to finish.
Based on these assumptions, a beef price of between €4.60/kg and €4.80/kg is required to cover all costs. Building in a €150/head margin lifts the required beef price to between €5.10/kg and €5.30/kg.
Two things to note is that the performance of the animals on the demonstration farm is in the top 5% of the country in terms of weight for age.
Taking them to national average figures would see carcase weight remain the same, but age at slaughter would increase to 24-months, meaning an expensive winter finishing period has been incurred.
Secondly, these calves are sired by high beef merit bulls, meaning they are some of the best in the country. Buying calves of unknown genetics increases the risk around lifetime performance and ultimately profitability.
In week two of the calf rearing series, we look at getting your farm ready for calf arrival.