Does building a shed for finishing cattle pay?

A farmer recently invited me on farm to get my thoughts on a new shed. He is a mixed drystock farmer in the West of Ireland, running a beef suckler herd alongside a commercial and pedigree ewe flock. In recent years, due to other commitments, he has scaled back on the suckler enterprise and added a dairy calf to beef branch to the farm.

In 2023, 40 dairy beef calves were purchased, with this rising to 70 this year with plans to increase to 100 calves/year going forward.

The farm is currently utilising some rented shed space to house stock, but with plans to increase the overall stocking rate and become less reliant on this rented accommodation, they have been considering the avenue of creating additional accommodation at the home yard.

What to consider

An on-farm site visit soon established a problem. The farmer wished to extend his current four bay cattle shed with an additional four to five bays. However, an external agitation point at the end of this shed means that the farmer either has to a) keep back 6m (20ft) from this agitation point with the gable of his new shed, or b) cut through this tank and connect it with the new tank to create a eight-nine bay long tank. The issue with this is that the older tank likely falls below that of the minimum standards set by the Department, and would have to pass an engineer’s report if the farmer wished to receive TAMS aid for the new tank.

The rear wall of a handling facility would become blocked off with the new shed location; we were lucky that this is not used for animal housing meaning the restriction in air flow will not be a major problem.

Sizing and purpose

The farmer was keen to create a lie back area for the animals behind a slatted area, with the shed being primarily used for finishing. The issue with this is that while we will have ample lying space, feeding space will be restricted to 4.8m per pen, as we will not be feeding from the bedded lie back area. Even at a relatively shallow pen, using a 10ft 6in (3.15m) slat with a 3m lie back, we have lying space for up to 15 finishing animals, but only feeding space for restricted feeding (non-ad lib) for eight animals (600m per finishing animal).

The farmer does not intend to feed meal ad-lib, nor do they envisage feedinga TMR of concentrates and silage together through a diet feeder, so feed space must be increased. Cutting out the lie back area and using a wider slat with toe space with a feeding passage both sides of the pen was explored. Using a 16ft 6in slat (4.95m) and leaving 2ft (600mm) of toe space either side of this will give us the equivalent pen size of the lie back/slatted area above (29.5m²). However, we have now also doubled feeding barriers each side of the slats, meaning we can feed 16 finishing animals at any one time with concentrates.

Tank size

Using the above stocking of 16 animals/bay, a five-bay long shed will have a capacity for 80 animals. Using our 16ft 6in slat, we will have a internal tank width of 4.75m, an internal length of 27m (five bays plus two external agitation points 1.5m each) and a standard depth of 2.4m. This gives a usable capacity (freeboard of 200mm excluded) of 282.15m³. At a minimum of 0.26m³ per animal per week, we would only have 13 weeks storage, with a minimum 16 weeks required for this many animals. Deepening the tank to 2.7m (9ft) will give close to two weeks additional storage, though it is likely an unnecessary option as the farmer is hopeful of having many of the animals finished in the first two months after housing.

Cost

Our slatted area can include up to 1m of additional concrete past the edges of the slats, so with our 4.95m slat and 1m of allowed toe space, our total roofed slatted area comes to 142.8m², giving a reference cost of €36,052+ VAT. Our feed passage either side of the slatted area will consist of two 4m wide passages, plus our 200mm of toe space we were not allowed to calculate in our slatted area, giving a total roofed feed passage area of 196m² and a reference cost of €34,573.82+ VAT.

Our tank at 2.4m deep will cost €28,432.97, or at 2.7m deep it rises to €32,177.50; with very little difference in the reference cost per m³ of storage.

All in, the reference cost of the shed will come to €102,803 + VAT. I would be surprised if the farmer could get a shed of this size built for that, and feel the cost is close to €118,000, approximately 15% higher than the reference cost.

Grants

If the farmer goes it alone, they are entitled to a 40% grant on the first €90,000, equating to €36,000 subtracted from the reference cost of €102, 803, giving a net cost (when we factor in the cost likely being 15% higher) of €82,000 + VAT.

An option that we explored was that the farmer’s wife, who is farming in her own right, would join the operation in a farm partnership.

This would mean that the slatted shed could be completed under the Women Farmer Capital Investment Scheme (WFCIS) and a higher grant rate of 60% could be attained on the first €90,000, with a 40% grant received for the remaining €12,803 from the reference cost.

This would give a total grant aid of €64,121.20, leaving a net cost of approximately €53.878.

Though the Department recently stated that they view their current reference costs to be largely inline with actual costs, I would still struggle to see the farmer building what is a very decent sized shed for the above reference cost.

Saying that, would the farmer be able to build the shed to non-grant spec for the €82,000 it would likely cost him if he goes down the route of a 40% grant? It would be near impossible. The option of a farm partnership and availing of a higher grant rate needs to be explored further regarding tax etc with an accountant, with a farm partnership never being something that should be rushed in to.

The cost of the shed for what will be a low margin animal also requires further thought.

The farmer plans to kill cattle as they become fit through the winter, meaning that the 80 animals that go in to it in October will likely be half that by January, leaving a half empty shed. The shed could be used for other stock on farm, or additional forward stores could be brought in as well, and the new build will allow stocking rate to increase while increasing the farm’s value.

However, the reality is that building a shed for finishing beef cattle might not see monies invested returned.

Would the farmer be better off to finish their cattle at grass, albeit at a likely lower price per kg and a lighter carcase? The calculations done on the Thrive demonstration farm in Cashel, Co Tipperary, could never justify finishing the dairy beef cattle indoors, let alone to pay back the cost of a new shed. Either building costs will have to come down or reference and/or beef price will have to rise.