In calf to beef, every animal on the farm is adding weight gain that will be sold as beef. Suckler systems have the overhead of carrying the cow. A suckler cow is magic for converting rough grassland into a premium food. She is less attractive on good soil which has the option of alternative uses.
Where did this potential gross margin of €2,000/ha suddenly spring from?
It has come about from combining top grass management, the efficiency of bulls, along with today's improved beef price and cheaper calves.
All of these ingredients par excellence were seen on last week's outing to father and son Andy and Tom English of Adamstown, Co Wexford. This farm is part of the Dawn Meats/Teagasc dairy-calf-to-beef project.
In the short time I was there I thought "wow this place impresses". The margins being quoted were credible and there was a general feeling that these guys were onto something.
This farm has evolved from a unit putting 120-130 Friesian bulls calves through to 24-month steer beef to a mix of 18-month bulls and 24-month steer beef from 220 purchased dairy calves.
The propitious timing in making this switch, plus the harnessing of new grass technology, along with the farmers' own ingenuity, has driven the farm gross margin from €376/ha in 2010 to an estimated €2,000/ha in 2013.
In Table 1, below, the figures for 2010, 2011 and 2012 are taken from actual profit monitors on this unit. The 2013 figure is estimated, but if anything Michael Fitzgerald used modest assumptions in coming to the €2,000/ha gross margin.
He pointed out that other equally good dairy calf to young bull beef units in Wexford are heading to similar or even higher gross margins.
In outline, Tom and Andy English purchase about 120 Friesian bull calves in the spring, 80 (two thirds) of which are sold as bull beef at 18 months (320kg carcase) and 40 (one third) as 24-month steers (also 320kg carcase).
The bulls get one and a half seasons at grass before being housed in June/July for ad lib meal finishing. In addition, about 100 autumn born Friesian bulls are beefed at 18 months after one full season at grass.
Weight gain at grass is the key to making profit from this enterprise.
This means paddocks, paddocks and more paddocks.
Another crucial component of the English package is that they grow seven hectares of fodder beet in a tillage rotation with barley.
Having the tillage removes the need for a Nitrates Directive derogation. Having the fodder beet saves hugely on purchased concentrates.
The table 1 figures include the land under fodder beet but not the barley.
All told 68ha are credited with beefing the 220 calves per year. Land quality is very good.
All around the Englishes are tillage and dairy farms.
At the farm walk Tom English was asked what recent management changes have done for them.
I thought that I heard him say under his breath "a lot more work".
But then he added: "We can get the same 1.3kg/hd/day gain on grass costing 30c/hd/day as on cattle in the shed costing €2.50/hd/day".
Michael Fitzgerald calculated that a kilo of gain at grass was costing 27c versus €2.10 for indoor gain.
Since mid-February the bulls from spring and autumn 2012 are at grass. They were re-housed for a couple of wet days in early March to save the land. Steers from spring 2012 have been on the fodder beet tops.
After trial and weight recording, the Englishes have moved towards one day paddocks for the bulls.
Bulls are more content and thrive is better.
Nitrogen is spread after every rotation. Surplus paddocks are made into big bale silage that is fed back to the 16 month bulls that are housed for finishing in June/July.
A feature of the mix of autumn and spring bulls plus spring steers on this farm is that there are sales in February and March (40 steers), in April/ May (autumn born bulls) and August to October (spring born bulls). The mix also makes efficient use of housing.
At the farm walk Paul Nolan of Dawn Meats welcomed the fact that the Englishes' bulls were being slaughtered at about 18 months rather than the 22 months on a lot of dairy bull farms.
He said British supermarkets still want an upper age limit of 16-month bulls.
Both Michael Fitzgerald and Tom English say that beefing dairy bulls at 16 months is too expensive.
Ideally, the supermarkets should give a little ground on this if they want to promote low-cost beef farming.