Breakeven beef price of €5.54/kg in Ballyvadin

A huge crowd attended last week’s first open day on the Teagasc Dairy Calf-to-Beef Demonstration Farm, with a mix of dairy and beef farmers attending. There were lessons for everyone, with both breeding and feeding highlighted as being important cogs in the wheel to make dairy-beef work. The 112ha (277 acres) are currently stocked with 655 head of cattle, 320 yearlings that were purchased as calves in 2023, and 335 calves purchased in 2024.

All calves will be finished as bullocks and heifers, with the target to maximise production from grazed grass and good-quality silage.

The target carcase weight is 275k,g with a projected 3.5 animals/ha finished, producing an output figure of 965kg/carcase/ha. The farm is operated as a standalone company, Ballyvadin Beef Farm Ltd, which produces an annual set of audited accounts and is managed and operated by farm manager Jack Spillane, with Stephen Baskin also working part-time on the farm. They work closely with Chloe Millar, who is the Teagasc technician on the project.

Table 1 outlines the financials for year one of the project, with Teagasc estimating that it will require a beef price of €4.42/kg to breakeven in 2024.

If the land rental charge was included for the Ballyvadin land, this breakeven price would increase by €1.02/kg to €5.54/kg. This price includes a value on the labour required to produce the beef. For 2024 the project is targeting a 275kg carcase at €4.70/kg, or €1,293/head.

Calf purchasing specifications

All dairy-beef calves purchased on the farm were required to be in the top 40% for the CBV index. Most calves purchased on the farm were of AI origin, where the beef bull had been chosen by the dairy farmer from a pre-chosen list of AI bulls to use.

All calves had to be 14 days of age on arrival to the Tipperary farm. Calves needed to be 35kg on departure from the dairy farm and in good health on arrival to the beef farm. Dairy farmers were required to vaccinate calves at a minimum of five days before transport, with PI3 intranasal pneumonia vaccine.

A base price was calculated using the average price of calves sold in Cork marts in 2023, with adjustments made to reflect CBV and weight differences from the base animal.

The base price for beef cross dairy male and female calves weighing 55kg, with an average CBV of €71, was €148/head and €138/head in 2024 respectively.

Table 2 outlines the calf-purchasing specifications and bonuses for CBV and weight.

Comment

Looking in from the outside, the Teagasc financial and technical targets set the bar high. Achieving a €1,000/ha net margin figure is no small feat and the project will be watched with interest by many, to see if the targets can be achieved. It makes complete sense for the parties involved, Shinagh Estates (Bandon, Barryroe, Drinagh and Lisavaird Co-ops) and Dawn Meats to come together.

The dairy and beef industry has a big sustainability problem if the progeny from dairy cows can’t be finished in a sustainable way. Other countries have learned some hard lessons on this and while the Irish dairy industry is 10 years late coming to the table in terms of talking about calf quality, it’s better late than never and this project will place the new Commercial Beef Value (CBV) index in full view, for all to see.

Dawn Meats, one of Europe’s largest beef processors, also sees an opportunity to maintain its raw material supplies for beef processing. Suckler cow numbers are dropping and they can’t make money without cattle, so it makes sense for them to turn to dairy beef.

Everybody is betting big on CBV, but the jury is still out on whether a high-CBV bull will be enough to compensate the low beef merits of a 450-550kg dairy cow. You can’t pull an elephant out of a mouse. You can’t, but ask the question is this the right model for dairy calf-to-beef production? I’d safely say there were very few farmers that attended the open day last Wednesday that would look to replicate the system of stocking a farm at over 200kg of organic nitrogen per hectare. I feel not many would take the risk of the high stocking rate by rearing 350 calves per year through to finish with derogation uncertainty looming.

It’s an excellent project and I have no doubt that it will be run at a top level with the parties involved, but Teagasc needs to make the technology and financial measures applicable to those farmers with 30-40 animals per year.

Doing it in a smaller scale with a lot less investment might bring more beef farmers on the journey. Doing it on a more difficult land type with a shorter grazing season would be of interest to a lot more farmers, especially in the west.

The investment put into the farm is huge. Close to €560,000 has been spent on reseeding, the farm yard, fencing, etc, to get the farm up to spec to run the business efficiently. Another €130,000 stocking loan has been taken out, along with a €150,000 overdraft. All of this excludes the Teagasc contribution of €88,000/year towards the land rent and a technician to the project. Teagasc will invest over €2m in this project over the next 15 years.

In brief