How 19 drystock farmers are contract rearing over 2,000 dairy heifers and making up to €1,400/ha
In November 2015, some 19 drystock farmers in Sligo and Leitrim came together to investigate the potential of contract rearing dairy heifers as a means of increasing stocking rate and increasing the profitability of their farms.
Gross margins ranged from €743/ha to €1,394/ha, heavily influenced between stocking rate and the length of time heifers spent on the rearer's farm.
The contract rearing has proved so successful for the group that they plan on increasing the number of heifers to 2,900 by 2019.
The group has devised a list of pros and cons for farmers looking to enter this strain of work, which were outlined by Teagasc, Business and Technology Advisor Tom Coll, at the recent National Beef Conference.
Tom is the acting mediator in the Slio/Leitrim contract rearing group, who helps resolve any issues that may arise between between the rearers and the dairy farmers.
Key to the success of the group, according to Tom was that all the farmers involved were relatively good at their grassland management before entering the group and all farmers wanted to increase profitability on the farm.
Risks of Contract Rearing
- It takes time to build trust and form a working relationship with the dairy farmer. The first bump on the road and how it is dealt with is vital, according to Tom.
- Heifers arriving on the rearers farm in poor health or underweight was one of the main issues. A member of the group is a vet and has set up a protocol for both the dairy farmers and contracts rearers in the group since.
- According to Tom, the initial contract is difficult to get up and running with some dairy farmers pulling out at the last minute and leaving the rearer without stock.
- The contract rearer needs to be technically efficient, an excellent grassland manager and aware if the benefits of reaching target weights.
- There is a cost associated with changing the annual herd test date to earlier in the year to allow enough time for retesting stock in the case of a TB outbreak. The rearer should liaise with his local DVO prior to entering into an agreement.
- There is a disease risk associated with bringing animals onto the farm.
Benefits of Contract Rearing
- A means of increasing stocking rate, making better use of the available land and buildings without the requirement to invest stock.
- Good for cash flow as the rearer gets paid monthly by direct debit.
- Clear guidelines are outlined regarding target weights and pregnancy rates which keeps the rearer focused on the job at hand.
- Contract rearing has substantially increased the profitability of farms involved either as a sole enterprise or in combination with an existing enterprise.
- An immediate source of income which enables the development of the existing farm infrastructure and on which future plans can be pivoted.
Key factors and targets that should be implemented and agreed upon between dairy farmers and rearers in advance of the first animals on farm, according to the group;
- A detailed contact agreement specific to the farms involved be put in place and agreed by both parties, including terms and conditions, a herd health plan, target weights at arrival and return and a breeding plan.
- Regular weighing of stock should be undertaken to identify underperforming animals for timely corrective action.
Using an independent intermediary person appointed by both parties to dissolve disputes and find solutions when things don't go to plan.