Contract rearing heifers has benefits, but not without risk
Published 08/07/2015 | 02:30
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.
Tom Kelleher felt he was overstocked on a heavy farm, so it has allowed him to improve the efficiency of the remaining stock. Another issue for Tom was a shortage of winter housing and slurry storage. Jim now keeps the heifers until just before calving when they return to the home farm. Freeing up time and labour to focus on dairying on the home farm is also a real advantage where labour is an issue.
The cost involved will vary depending on how long the heifers are with the rearer.
For example there will be a much lower cost for grazing calves in the first summer versus taking weanlings through the winter or grazing in the second summer.
To help estimate the costs involved there is a heifer rearing cost calculator on the Teagasc website which can be downloaded. Start with the number of stock involved and the periods of time they will be with the rearer.
The payment to a rearer is very visible as it is leaving the account monthly. But don't forget that a lot of costs are being incurred when rearing replacements on the home farm. Land rent, fertiliser, ration and contractor bills won't stand out as heifer-rearing bills.
Ensuring that heifers achieve the target weights for breeding and calving is hugely important and is one of the biggest worries for a dairy farmer sending out his stock. Weighing heifers at defined times during the process is very useful to ensure targets are achieved. This also allows corrective action to be put in place if required.
The other big worry is the risk of a disease outbreak. With animals from two farms the risk of either group contracting diseases such as TB or Leptospirosis is doubled. If the rearer is taking animals from more farms the risk is further multiplied.
Vets Donal Murphy and Eilish O'Brien at the farm walk outlined the main disease risks and strategies to reduce the threat. Establish the disease status of the rearer's herd and the amount of TB in the area.
Ensure that there are stockproof boundaries between the rearer's farm and neighbouring farms.
Testing for TB should be done at the same time on the farms involved and sufficiently early to allow for retests if required.
Implement a strategic vaccination programme based on the disease status of the farm of origin and any other farmers involved. A parasite control strategy to include roundworm, fluke and lungworm will also be required.
While there is no doubt that there can be huge benefits for both the dairy farmer and the rearer, there are also risks involved in these types of arrangements.
Having a written contract of agreement in place will minimise the risks by teasing out the issues involved and how they will be dealt with. Template contracts are available on the Teagasc website.
Visiting and weighing the heifers on a regular basis is crucial.
The farmers involved in the Kerry farm also stressed the importance of regular communication.
Success depends on the dairy farmer and rearer having a relationship where they trust one another.
Nora O'Donovan is a Teagasc advisor based in Co Kerry