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Saturday 21 July 2018

Fine margins: How this Kilkenny calf to beef farmer tripled his margins

Hitting a series of health, weight gain and grass management targets hold the key to successful results

Gordon Peppard (right), Teagasc Calf to Beef Programme Advisor, and Pat Bowden lead the way at the farm walk on Pat's holding in Lisdowney, Co Kilkenny PHOTO: Damien Eagers
Gordon Peppard (right), Teagasc Calf to Beef Programme Advisor, and Pat Bowden lead the way at the farm walk on Pat's holding in Lisdowney, Co Kilkenny PHOTO: Damien Eagers
Louise Hogan

Louise Hogan

There is still a margin to be made in calf to beef systems, but planning and efficient operations remain key as Pat Bowden can testify. It has been a hectic three years for the Kilkenny farmer, who has switched over from sucklers to rearing Friesian steers from the dairy herds under the guidance of the Teagasc Green Acres Calf to Beef Programme.

Key measures put in place on the holding included improving grazing infrastructure on the 105ha split farm with a water and paddock system, grass measuring and improving soil fertility. Alongside this, there was also a designated calf-rearing house erected on the farm in the spring of 2017.

It was the figures that caught the eye of many of the farmers on the farm at Lisdowney as Pat had a gross margin of €304/ha at the start of the programme in 2014. This trebled to €1,073 last year and the projected figure for 2019 is €1,145.

"In these calf to beef systems, make no mistake about it, there is a margin to be made if you can get the calf at a reasonable price," said Teagasc's head of drystock Pearse Kelly.

4 week old Friesian Bull Calfs at the Calf to Beef Farm Walk on Pat Bowden farm in Lisdowney, Ballyraggett, Co. Kilkenny. Picture credit; Damien Eagers
4 week old Friesian Bull Calfs at the Calf to Beef Farm Walk on Pat Bowden farm in Lisdowney, Ballyraggett, Co. Kilkenny. Picture credit; Damien Eagers

"The costs to get it finished are high per head so you have to bear in mind that you have to have the cashflow to get that calf from purchase through to finish at those high costs. We don't want people walking into this system saying 'Teagasc said there is loads of money to be made in calf to beef'."

The step-by-step approach that Pat has taken to grow his enterprise efficiently were emphasised.

Those considering entering calf to beef were urged to focus on calf rearing, quality silage and getting all the basics right.

"If you are not hitting all the key points at key stages in the lifetime of the animal and you are not hitting good grassland management and making good quality silage, then your costs are going to go up and your efficiencies will go down. Then it doesn't matter how many animals you buy as you are not going to make a margin," said Pearse.

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He urged farmers to follow the old adage of "better before bigger" as they move to raise the numbers of stock on farms.

Plenty of suckler farmers are making gross margins per hectare of €1,100 and €1,200.

"We are not saying this is not possible on a suckling farm," he said.

"Even people who are suckling and have other beef systems are looking at buying calves now.

Farmer Pat Bowden with his 4 week old Friesian Bull Calfs at the Calf to Beef Farm Walk on his farm in Lisdowney, Ballyraggett, Co. Kilkenny. Picture credit; Damien Eagers
Farmer Pat Bowden with his 4 week old Friesian Bull Calfs at the Calf to Beef Farm Walk on his farm in Lisdowney, Ballyraggett, Co. Kilkenny. Picture credit; Damien Eagers

"We see that it is an option if calf prices are at the right level to increase output on your farm without a huge investment at that stage," he said. "It is a way of getting into extra stock to improve your output." The number of calves reared on the farm has increased to around 180 over the past year. Pat now rears 80-100 calves in the autumn and 100 calves in the spring to ensure maximum usage of his new housing.

Pat is buying in Friesian bull calves from a dairy farmer in the area, plus purchasing from marts at a couple of weeks of age, with the aim of finishing them as steers at 27 months.

The aim was to move from a stocking rate of 1.4LU/ha to 2.1LU/ha with improvements in efficiency on the farm, with Pat currently on 1.85LU/ha.

Volume

The volume of kilos of beef produced on the farm, which is the main driver, was shy of 500kg/ha but now stands at over 1,100kg/ha. The variable costs moved from €400/ha in 2014 to close to €900/ha.

The vast majority of the spring-born calves will go back out to grass for a third summer to be killed at an average carcass weight of 345kg, with an average of ¤3.90/kg estimated.

The autumn-born animals will kill out at a lighter weight of 325kg with an estimated price of around €3.70/kg to deliver total sales of around €244,608 or a gross output of €2,082/ha.

It is costing around €26,000 to buy in the stock.

Around 45pc of total sales will go on variable costs, with an estimated €573 a head to cover the calf price, fixed costs and the margin. The fixed costs work out at around €200 a head.

Pearse pointed out this means that the price being paid for calves is key, with Pat spending between €80 to €150 a head on purchasing.

Is your rotation plan ready for a 'grass tsunami'?

There is no room for average quality silage on an efficient beef producing farm, warned Teagasc cattle specialist Karen Dukelow.

Spring rotation plans on many farms are behind target due to the extended winter weather and these plans will need adaptation if the "grass tsunami" finally arrives.

"You could criticise us and say that plans don't work out, but it is your ability to adapt and change," she added. "We need to get grass into these animals to do the liveweight gain and do it cheaply."

The plan set out 160ac to graze over 40 days, starting March 11, with around four acres a day planned. However, no stock has gone out so far.

She said a bit of "creative accounting" was going to be carried out by lengthening out the first rotation due to a lack of growth rates.

The acreage is being dropped down to around 115ac, excluding the silage fields, with the rotation to run over a month. "If we get our grass tsunami we'll adapt again and flip to a three week rotation," she said, urging people to do a simple plan and not make it overly complicated.

She pointed out there would be "tight recoveries" for the second rotation.

Pat explained that no fertiliser has been put out as the land is too wet to travel with hopes of getting out with slurry over the coming days. "We would be hoping to go out with a bag of urea to the acre, probably follow up in two weeks' time with 18-6-12," he said.

Currently, he plans to skip grazing the silage field with low covers as they continue to aim to produce 72pc+ DMD silage. Karen said the aim was to cut by the third week of May, with the ground rested before that for seven weeks. "There will be temptations to roll this year if there was damage done in the back end, damage done this spring, don't do it if you have a stem. Rolling is tricky business," she said.

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