For years, I have been aware that one part of this farm business was far too hit and miss. My beef-finishing enterprise is something of an Achilles heel, with strong profits one year immediately resulting in a huge increase in store cattle prices, and a subsequent obliteration of any kind of margin the following season.

My beef-finishing enterprise is something of an Achilles heel

Beef special premium, extensification payments, then Single Farm Payment money and the current Basic Payment Scheme have all acted as a financial lifeline for this Cinderella branch of agriculture.

I’ve said it before in the Irish Farmers Journal, and I’m inclined to repeat my firm belief, that far too many producers who are involved in buying store cattle for finishing, do not rely on it as a primary (or indeed secondary) source of income. I’m perfectly happy to include myself in those numbers. More recently, general rumour and political hints would lead many of us to assume that agricultural support will be reduced or even phased out in the years ahead.

Declined

A few years ago, I was offered the chance to rear dairy heifers from weaning up to point of calving. For one reason or another, I declined, and reckoned I had plenty on my plate at that moment in time.

More recently, the chance came up again, and this time I agreed without having to give it too much thought. The overwhelming factor in this decision was the chance to replace (gradually) the weakest link in my chain with something that should guarantee sustainable profit, even without any sort of ‘‘brown envelope’’ money.

Plan

The plan is for two people (myself and another local farmer) to each take between 30 and 40 calves per year. We get them when they’re weaned off milk, and look after them through the first grazing season and into the winter. They will be put in-calf the following spring, with a view to calving in February and March.

At this stage, it is hoped they will leave our farms between Christmas and the new year, to give them time to settle into their future home farm.

We are paid a set amount per head per day as a rearing fee, and it’s up to us to achieve target weights without breaking the bank.

Obviously, I’m not in a position to reveal the exact figure, except to say that I agreed to the proposed amount with indecent haste.

Contract

We are operating under an unofficial contract, where clearly defined targets are laid out, as well as exact details about who, exactly, pays for what.

The three main parties are well-known to one another and are probably more friends than business acquaintances.

I don’t know if this is an ideal business model or not, but by far the most important criteria of all has been passed before anything was agreed: complete trust on all sides. I have spoken to others who had unsuccessful ventures similar to this, and it would appear that a breakdown in trust (and financial disagreements) usually featured heavily.

The outfit we are rearing is operated under a New Zealand style of dairying, and their idea is to farm out the calves in order to let them milk more cows, while not having to get side-tracked by having to rear calves. It should also tie in nicely with my sheep flock, since the calves don’t arrive until late May or early June, facilitating an early run over cattle fields for the ewes with lambs at foot.

It is far too early to comment on any aspect of the job, either positive or negative. But one thing is certain: the change from looking at U grading bullocks that weigh in excess of 700kg, to young heifer calves (with a fair spattering of Jersey breeding) is stark. I guess I’ll get used to it over time.

Read more

Farmer Writes: farming is a game of percentages

Farmer Writes: 'to misquote Otto von Bismarck...'

Farmer Writes: life after MCPA