If you were to factor in land rent, fertiliser, silage costs and all the other various costs that come with rearing a heifer, you soon realise that contract rearing is near enough to the cost of rearing your own heifer.
Why should I consider contract rearing as a system of farming?
We are all well aware of the difficulties many drystock farmers are having in making a decent profit.
Profit monitor figures show that the average drystock farmer is doing just slightly better than breakeven. However, it should be noted that there are massive differences between the top and bottom, which the averages mask.
If you are a drystock farmer or recently retired dairy farmer, then contract rearing provides you with numerous benefits including:- No more money tied up in stock, no more trips to the mart, no calving cows, no need to complain about factory prices again, no Bord Bia audits, no BVD tags, and so on, but the single most important reason, a regular steady monthly income.
Systems of contract rearing
There appears to be a misconception out there that contract rearing is a process which involves the rearer taking in calves at two or three weeks of age and keeping them until they are 22 months of age before they return to the owners farm to calve down at 24 months of age.
This is one system operated by some, but the reality is that the system needs to be custom built between the two farmers to reflect the needs, the facilities and the labour availability of both parties.
If the rearer has adequate calf rearing facilities and time to rear calves, then it might make sense to take in young calves. On the other hand, the owner of the heifers may have adequate calf and weanling housing and may decide they only want to get their heifers reared for the second grazing season.
The reality is that both parties need to discuss openly what suits each of them.
Who pays for what?
In general, the rearer pays for feed costs (fertiliser, silage contractor, meal) and the owner pays all other costs.
What are the risks?
To put it very bluntly, all the heifer owner is worried about is getting his heifers back at the right weight and in calf. For the rearer the primary worry is getting paid. There are many factors which can end up with things going wrong, but the key for both parties to avoid these is finding the right person.
Finding the right person
For the heifer owner, you want someone with a good history of stockmanship, someone that will hit the weight targets and get them in calf. They are out there.
Think of the really good suckler farmers in your area, the guy that has recently retired from dairying or the really good cattle finishers.
Would they be capable of rearing your heifers? Probably yes.
But would they be willing to switch enterprises and take a step into the unknown? Unless you ask them, you'll never find out.
For the rearer, the key is to find someone trustworthy, that is going to trust you to rear their heifers but more importantly for you, someone that is fair and that you can trust.
This is the whole key for contract rearing to work. Trust. If you can find the right person with the right attitude that you can trust then all other obstacles are surmountable.
Joe Kelleher is a Teagasc advisor based in Newcastle West, Co Limerick