Economics of dairy beef systems

While dairy calf-to-beef production systems have the potential to be profitable, these profits are entirely dependent on achieving high animal output, operated at a high stocking rate with a high proportion of the output coming from grazed grass.

With dairy cow numbers increasing and suckler cow numbers decreasing, dairy beef could play an important role in the future of the Irish beef industry.

Speaking on the profitability of dairy calf-to-beef systems Padraig French of Teagasc outlined the difficulties facing farmers.

"Profitability will be dictated by stuff very much outside of your control; beef price, calf price and meal price will all have a major effect. We have made assumptions when calculating these figures."

With dairy cow numbers increasing and suckler cow numbers decreasing, dairy beef could play an important role in the future of the Irish beef industry

The issues with more calves coming on stream over the month of February will very much dictate the type of system that dairy beef farmers can choose from.

"Over the last 10 years, the dairy herd has become more fertile and more compact calving with 91% to 92% of calves from the dairy herd born between February and April. The beef-bred calves will mainly be born in March.

"However, there can be a massive difference between calves from the one breed and that is why a major focus of today will be on genetics."

Systems

While a range of different systems are highlighted in the photo of the table below, Padraig had a word of caution for those thinking of going down the Friesian bull beef route.

"Friesian bulls at 16 months can be extremely risky. They have the potential to leave a high margin but are very volatile."

Any systems where you carry a high stocking rate are more exposed to changes in beef price.

One system that more farmers are looking at it is killing Angus and Hereford heifers off grass at 18 to 19 months.

"This can be a very profitable system especially where grass can be maximised in the diet," Padraig explained.

"What we have seen over the past few years in the early maturing breeds is a drop in conformation. Over 20% are not making the minimum specification, which means they are losing the breed bonus too.

"If you are dropping from an O+ to an O- you could potentially be losing 40c/kg.

"But if you can finish off grass, the systems tend to be more profitable."

Teagasc key points

  • Dairy calf to beef has profit potential but is dependent on very high levels of management.
  • There is a large range of systems varying in breed type and slaughter age that utilise spring-born calves.
  • Bull finishing systems can potentially leave very high margins but are very high risk.
  • Systems that have high proportions of grazed grass in the diet and finish animals at a younger age will increase profitability and reduce the carbon footprint.