Contract rearing heifers has benefits, but not without risk
A recent Teagasc farm walk in Kerry highlighted the benefits of contract heifer rearing for both dairy and drystock farmers. Contract heifer rearing is a form of collaborative farming where the dairy farmer out-sources the rearing of replacement heifers to a drystock farmer.
These arrangements have become increasingly popular with the removal of milk quotas.
Jim Moynihan, who hosted the walk, is a retired dairy farmer. This is his third year rearing heifers for two local dairy farmers, Tom Kelleher and William Dennehy. Having a set monthly income and avoiding the gambling element of buying in and selling stock was the main attraction for Jim. The other main benefit for the rearers is that there is no capital required to stock the farm.
Contract heifer rearing can deliver the same or better profit than cattle farming. But it will depend on your stocking rate and your costs, along with the rate paid.
Jim's excellent grassland management really stood out on the day. Together with his superb stockmanship, this has meant that the heifers return to the dairy farms in excellent condition.
For the two dairy farmers involved, finding someone they can trust to look after the heifers properly is crucial.
There are differing reasons for dairy farmers getting involved in these arrangements.
William has been able to increase the number of cows on his milking platform which has increased his farm profit. In the 2014 profit monitors the net margin per hectare for cows was €1,800 versus little or no net margin from replacement heifers.