Growth in the national dairy herd has seen a huge increase in the number of calves becoming available for finishing. A large proportion of these calves will be Angus- and Hereford-cross, with these breeds accounting for 75% of calves sired to beef sires in the dairy herd in 2016.

In 2015, there were just short of 500,000 beef-sired calves from the dairy herd. This figure is likely to hit 650,000 by 2021 and could go closer to 1,000,000 if sexed semen technologies improve and dairy farmers embrace the new technology.

So what will happen these extra calves? While calf exports have been strong, so too has farmer purchasing around the mart rings and yards of the country.

Many suckler farmers have branched out into calf rearing as an alternative enterprise over the past two years. They have seen it as an opportunity to increase output without going up in suckler cow numbers.

Is this the right route to go? Time will tell, but we have seen from farms already in this system that it can be very profitable. It’s the same with any farming enterprise - if it’s done well , it’s profitable; if you are technically inefficient, margins are extremely tight.

Decisions

There are numerous beef production systems that can be embarked upon with calves from the dairy herd. It is best to decide on what production system is being pursued before calves are purchased.

The choices are Holstein Friesian, Angus, Hereford, continental, bulls or heifers. These systems all have different finance, labour, housing and grazing, concentrate and silage requirements. Ultimately, animal performance will dictate finishing stage, including carcase weight and profitability.

Recent research at Teagasc, Johnstown Castle, has looked at different systems of finishing both Holstein Friesian male calves from the dairy herd and male and female beef-sired calves from the dairy herd.

Table 1 outlines the performance targets and gross margins of male Holstein Friesian-sired calves. The stocking rate in the systems outlined is 200kg organic N/ha.

Under-16-month bull system

This system is a high-cost, high-risk system. Access to cheap concentrates is a must in this system, as total concentrates fed amounts to 1.8t/head.

Animals need to be gaining very high levels of liveweight gain from day one and there is no room for store periods.

Bulls are slaughtered in May/June with a target carcase weight of 275kg at O=/O- and a minimum fat score of 2=. It’s ideally suited to an operation that is tight on grazing area and has ample sheds to house the bulls for finishing. On a per-head basis, it’s the worst-performing system.

19-month bull system

This system is another high-risk system, with high concentrates and route to market issues. While some processors may have small requirements, producers would be depending on a supply/demand tilt or a very good processor relationship to guarantee getting these animals to market.

Table 1 outlines two senarios for these animals, a standard price and in brackets a 30 cent discount for out-of-spec bulls. These bulls were grazed at pasture for 100 days in the second grazing season, housed in June and fed ad-lib for 100 days. Concentrate input is 1.2t/head.

21-month/24-month steers

Steers in the 24-month system were grazed for the full second grazing season, housed and finished at the end of the second winter. Carcase weight was 320kg and carcase grade was 0- and fat class was 3=.

This system is a safer bet. However, it still has a high requirement for housing, as animals are housed for the duration of the second winter. The 21-month steers were slaughtered in November following a period of supplementation with concentrates at pasture.

The steer systems have lower costs than the bull systems due to higher utilisation of grass and lower concentrate usage.

The 21-month system comes out on top due to a lower requirement for housing in the second winter. The steer systems would be a safer bet to go with first and then, when the skillset has been mastered, maybe some bulls could be trialled.

With more and more Angus and Hereford calves coming on stream, it is likely that it is this type of system that many farmers will try. Table 2 takes a look at both early maturing (EM) and late maturing (LM) dairy beef systems and looks at what’s most profitable and why.

19-month early maturing heifer

This is where an Angus/Hereford heifer is slaughtered off grass at 19 months. Target liveweight at slaughter is 460kg, with a target carcase weight of 230kg. This is at the lower end of the scale in terms of carcase weight and, ideally, would be closer to 250kg to avoid any carcase cut issues. Shed requirements are low for this system, as animals are not housed for the second winter.

21-month early maturing steer

Similar to the early maturing heifer system, the higher growth rate of the male animals means a higher carcase weight is achieved at 280kg.

These animals are slaughtered in November after a period of concentrate feeding at grass. Carcase conformation for both EM systems are O=/O+, with carcase fat classes of 3-/=. Breed bonuses (in brackets) add significantly to these systems and it’s important to meet specs to hit these bonuses.

21-month late maturing heifer

While later-maturing breeds are used in small amounts in dairy herds, there is still a supply of these calves coming on stream at the moment. This heifer is managed in a similar way to the 19-month EM heifer, except kept for two months longer and slaughtered in November after a period of concentrate feeding. Target carcase weight is 270kg.

24-month late maturing steer

This system is very similar to the dairy steer system outlined above. Animals are finished at the end of the second winter, with steers getting good-quality silage and 5kg to 6kg of concentrates prior to slaughter. Target carcase weight is 350kg. Sheds are required for the second winter in this system.

Comment

The standout performer of all the systems is the early maturing Hereford/Angus 21-month steer.

With breed bonuses, this system has the potential to deliver €327/head net profit or €981/ha net profit stocked at 200kg organic N/ha, to the equivalent of 2.2 LU/ha. The success of this system is dependent on achieving high levels of live weight gain at all stages of the animal’s life.

It is also dependent on a high proportion of the live weight gain coming from grazed grass.

Calf purchase price has a huge effect on profitability of all systems and it’s important to set a budget on calf price. It’s also important to plan out a cashflow budget. These systems can take in the region of €800 to €900/head to get to slaughter.

If you embark on a system, bear in mind it will be 20 to 24 months before any sales take place, so that means you need to buy two years of calf batches before you have any cash coming in.

NEXT WEEK

We take a look at buying calves, what to look for, keeping calves healthy and rearing up to weaning