Rearing calves can be seen as a low-cost production system to enter and many farmers have dabbled in calves over the past few years. While it may be low-cost to get into, it can be a high-cost system to get out of, if every aspect and expenditure is not carefully planned and considered along the way.
While calf arrival on the farm may still be weeks away, it is worth sitting down and doing out a budget for the coming year.
Input prices at farm level continue to rise and while beef price is relatively positive at the moment, there needs to be a sharp focus on managing costs – many of which can be incurred in the initial few weeks of the process.
Table 1 outlines the associated variable costs for calf rearing on the Irish Farmers Journal Thrive dairy calf-to-beef demonstration farm outside Cashel, Co Tipperary, last spring.
When we compare last year’s actual costings to this year’s projected figures, all indications point to increased rearing costs this year.
Calf purchase price
While this is still an unknown, there should be a figure in your head that calves need to be in order to leave a positive margin.
The market will dictate the price, but the farmer dictates whether or not the price is worth paying.
Even on dairy farms where calves are retained to be reared through to beef, there should be a calf price put against the system.
By not selling the calf you are forgoing the potential income from calf sales and therefore an opportunity cost needs to be included to truly reflect all costs.
Mortality needs to be factored into every production system. The target for dairy beef systems should be to keep mortality below 5%.
On the Thrive demonstration farm, mortality was less than 2% last year. Indeed, across all the Thrive farms, mortality has been under 3% for the last two years.
This can be attributed to attention to detail on farm in terms of health, nutrition and housing as well as only buying calves from known sources.
Also, these calves are sired by high dairy beef index (DBI) bulls within which calf mortality is included in the index.
Milk replacer is going to be the biggest feed cost during the rearing phase.
As can be seen from the list of milk replacers on pages 40 and 41, the average price of a 20kg bag is just shy of €54, an increase of around €8/bag on last year.
On the demonstration farm in 2021, there were 1.6 bags of milk replacer fed per calf on average.
Although the target may be to feed less than this, once you factor in calves that were weaker or slower growing that needed additional time on milk, this figure represents the total number of bags of milk replacer purchased, divided by the number of calves reared on the farm.
Assuming feeding rates do not change this year, there is an additional €12.50/calf going to be spent on milk replacer.
While concentrate input is not huge in the rearing phase of the system, it can still add up across a batch of calves. Concentrate prices are running €100/t more than spring of last year. This translates to a 32% or €4.50/calf increase compared to 2021 levels.
At the moment veterinary costs have been left the same as last year. However, this could change by the time calves have received all vaccinations and treatments.
Bedding costs have also been kept the same as last year.
Again, this could change depending on weather conditions and calf turnout dates.
A total increase in rearing costs (excluding calf price) of €17/head may not seem excessive but if we average it out over a 290kg carcase, it is the equivalent of almost 6c/kg of beef price paid.