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For dairy farmers looking to expand, reduce labour requirements or simplify the day-to-day management of their milking herd, contract rearing of heifers is potentially an attractive option.
But if it is to work, both parties must benefit, and for the rearing farm, it potentially means a sustainable and regular income, without the tie of milking cows, or the major investment of a move into pigs or poultry. With the pressure on incomes in beef production in particular, it is something more farmers should consider.
In most arrangements, the dairy farmer sends calves to the rearing farm at or before weaning, and only takes back control of the animals just prior to calving.
With heifers off the farm, this gives the farmer more time to focus on managing cows and getting them back in-calf again.
There is also less demand for grazing and silage. That could free up land to allow cow numbers to expand, create a more manageable workload, or make it easier for the farm to keep within manure nitrogen limits.
Benefits
For the contract-rearing farm, the obvious benefit is a regular cash income for the business. Most agreements will include a payment at regular intervals (every month or every second month) to cover rearing costs.
There is also no capital tied up in stock for the contract-rearing farm. This eases the pressure on working capital that can be common with the likes of a store calf to beef system.
Trust
In order for any contract agreement to work, there must be a lot of trust between both the farmer who owns the cattle and the farmer who will be responsible for rearing them.
For the farmer who owns the cattle, it is a big step to move your animals into the care of someone else.
For the farmer who rears the heifers, they must be able to meet target weights for breeding and calving.
Heifers that are under-developed will be less productive once they calve.
Regular communication between both farmers is important.
Drawing up an agreement
Before entering any arrangement for heifer rearing, a contract should be drawn up on paper and agreed by all parties involved.
A formal, written agreement means there is clarity on what is expected, and how payments are to be made.
The contract should also include any terms of compensation should either party wish to end the arrangement before the agreed time period has elapsed.
Contracts should also be reviewed annually to ensure any issues arising during the year can be rectified, and that necessary changes are made to a protocol for the following year.
Payment
Payment arrangements will differ with individual contract arrangements. The more responsibilities placed on the farm rearing the heifers, the higher the rate of payment.
Most contract agreements which are currently operating in NI broadly follow similar arrangements.
Payment rates are typically 80p to 130p per heifer per day, or £5.60 to £9.10 per heifer per week. For a suckler farmer looking to increase stocking rates, rearing 20 dairy heifers as an alternative to cows, or store cattle, would generate a weekly income of £112 to £182 before costs are deducted.
For the higher rates of payment, the contract farm will normally cover all grazing costs, veterinary expenses and winter feeding. Other management tasks to factor into the agreement are any cost of milk replacer, semen for AI, and scanning. The contract should make it clear who is responsible for each task and who covers payment.
Based on CAFRE benchmarking data, the average cost to rear a dairy heifer from birth until calving is approximately £1,768.
Under a contract agreement, where a calf moves to the rearing farm at one month old and returns two months prior to calving, the animal will have been off farm for 630 days.
At 130p/day, this is a total cost of £819. So while some dairy farmers might question the daily cost figure, the CAFRE analysis would suggest that this actually represents good value for money.
Bonus
To ensure optimum performance, some farmers will also include bonus payments in the contract to be paid when heifers hit target weights for breeding and calving at a certain age.
Regular weighing of heifers is a good way to build trust and improve communication between both farmers involved in the agreement.
Risks
However, there is always an underlying concern around disease and, in particular, bovine TB.
In an ideal world it is probably best to avoid a partnership with herds that have a record of TB restrictions, or farms in an area considered to be at high risk of a TB outbreak.
The lowest risk will probably be if an arrangement is with an arable or sheep farm, or with a suckler farm that operates a closed herd policy. Before any animals are moved, advice should be sought from the local DAERA veterinary office.
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