Contract Rearing

Seadin

Hi all,

Has anyone here done this before and is there criteria to be met with it?

I'm coming from beef background and farm part time and I have two farms. I wanted to let one of the farms out as it's about 10km away from the other. I was suggested by my advisor to consider contract rearing and get.in a dairy farmer.

I wash under the allusion that the farmer would use my land to rear his heifers,cut silage etc and that I was the owner of the land only and he was paying me allow him to use my land for grazing and silage or use of the farm slatted unit.

However, from reading up on it there is alot more involved. The reason I was letting the land is, I work full time and can not manage having another farm of land that was inherited from my parents. I would not have time to be in charge of other farmers heifers and looking after them. Can the arrangement be done where the farmer uses my land for feeding or housing his heifers only?

TIA

lmk123

Could you just rent the land and buildings to a farmer, or you could take the cattle into your herd number and just make it part of the deal that he has to look after them. This would be a big advantage to a lot of lads as it would help with their nitrates levels. I don’t think there are any absolute rules you have to follow, just come up with a deal that suits both.

Bass Reeves

https://www.boards.ie/discussion/2058332932/contract-rearing

If you can lease it tax free that is the best option. If not are you married or in a solid relationship, get a second herd number in your wife, husband or partner name( you have to cover all bets nowadays). Put the heifer rearing into that herd No and let the dairy farmer manage them. You draw farm payments and schemes in the other half names.

Seadin

What happens if you take their cattle into your herd number and you get locked up? Are all animals in both farms effected then eventhough the two farms be completely separate and the heifers would be under the ownership of the other farmer?

I be of the arrangement that the farmer would use my let land for grazing ,silage, slurry and housing if required and the farmer would just pay the going rate for all of that. I would be keeping the SFPs as my own farming setup doesn't make much money without the payments itself.

Bass Reeves

https://www.boards.ie/discussion/comment/121663950#Comment_121663950

If the cattle are in the one herd number then it's both land holdings locked up

Seadin

https://www.boards.ie/discussion/comment/121663961#Comment_121663961

That's why taking on an other farmers cattle under your herd number would be an issue in that case.

Mooooo

In your case just let the land out, contract rearing involves you doing the management of the heifers. Letting the land the more straightforward solution

Seadin

https://www.boards.ie/discussion/comment/121664440#Comment_121664440

I lose the maps for that farm by letting it out. I know it's straight forward but one of the reasons I'm part time farming is because of the payments. Without the payments there is very little in it for me.

Mooooo

https://www.boards.ie/discussion/comment/121664993#Comment_121664993

Compare what you'll make leasing it to farming it, include your time and see how it compares, leasing has tax advantages also

If you're not going to do the rearing part of the contract rearing, it won't make sense for someone to take you up on it imo

893bet

https://www.boards.ie/discussion/comment/121664993#Comment_121664993

You are looking at it wrong. For the section you are renting pretend there are no payment. Decide what “you want for it (include what you would have made as payment for it plus the land fee”. This is yours then tax free.

Its the final figure into your hand that is important regardless of if it’s

A) payments seperate and rent separate

B ) just rent (but the other farmer claims the oayemnts).

as long as B is at least equal to A you are laughing. Even if it was a little less you are still laughing as the entirety of B is tax free where in A you have to pay tax on the payments.

Seadin

https://www.boards.ie/discussion/comment/121664440#Comment_121664440

Is this set in stone or is just an agreement that two farmers have together about how the land is managed?

lmk123

By the sounds of it what you want is: the farmer to transfer his cattle into your herd number, look after them and pay you for the use of the land & buildings and you get the grant money as well. You can do that, obviously the rent money would have to reflective of this, it’s just not really contract rearing because you’re not rearing them. If you do this there is a risk of his cattle getting locked up if you’re go down as someone else above pointed out. I’d guess that there are lads that would do this as it would help them with nitrates, depends where you are I suppose.

Mooooo

https://www.boards.ie/discussion/comment/121666189#Comment_121666189

Contract rearing is you rearing stock for another farmer. What you're talking of is just trying to make it look that way could be done I spose but personally I wouldn't, all the risks associated with contract rearing and none of the benefits. Even from a nitrates pov it would be better to lease the ground than just move replacements off the herd no if silage is involved as well. There would want to be a fair discount in the amount paid over renting it anyway.

Water John

Bass offered you a clever option. Def do not bring another farmers stock into your own home herd no. As others said the next best option for you, is long term lease. Pick the right option, not the highest bidder. A lot of grief, getting the wrong client.

Seadin

If you lease the land, are you tied down to 5-6 year lease with the farmer then? What happens if it doesn't work out after year 1? You are tied down to that contract for several years?

Or Can leases be done for shorter periods?

Water John

You can, but you won't get any tax relief. You are in fact better tied in with a good client for a period of time. You can't have it everyway, must make choices.

Mooooo

You can let it for whatvever length you want, but tax free amounts only come into it for leases over 5 or 7 years. Put into contract what you want and review period and both sides agree to go ahead or not. Short leases mean people are unlikely to maintain soil fertility etc anyway so doesn't mean they are any better.

lmk123

https://www.boards.ie/discussion/comment/121667498#Comment_121667498

Well said

Seadin

Another one for you guys.

A) If I leased the land for 5/6 year period with the maps what would be the approx. price be for renting per acre in Kerry?

B) If I leased the land without the maps, what would a farmer expect to pay to rent per acre in Kerry? Obviously it would be alot less but what one could expect in such an arrangement.

This is all new territory for me so apologies for asking different questions on the topic.

White Clover

@Seadin Are you talking about land around Ardfert or that general area of North Kerry or land around Lyreacrompane? There'd be some difference in prices there. Best thing to do is talk to an Agricultural advisor familiar with your area. You could also talk to a local Auctioneer and see if their respective valuations are any way close.

farisfat

Would anyone have the going rates for contract rearing from 12 weeks to calving.

Good grass infrastructure and good management targets always hit here .

Finding calving tuff going here at the moment with arthritis.

Is their much demand for contract rearers at the moment.

grass10

https://www.boards.ie/discussion/comment/121852109#Comment_121852109

First of all I have never contract reared or never would consider it and would advise anybody to run a mile from it it's very simple if dairy farmers want to have big numbers of cows and replacement stock they should rear them themselves this contract rearing thing is any idea being pushed by teagasc and other vested interests to allow dairy herds get bigger and get someone else to do the work

The facts are the owner of the land is providing his land, fencing, pay for water winter and summer, have housing for calves yearlings and 2 year old up to calving, have slurry storage, agitate and spread slurry, buy and spread fertiliser, buy ration for the calves from the day they arrive until they go out to grass the following spring, dose the animals several times every year and buy the dose, pay for a herd test every year and depending on your area may have to do 3 tests per year, buy fertiliser and spread for silage pay to make all your silage that's needed for the winter have equipment to feed silage in the winter, have all machinery needed for all farming tasks for the year ie tractor, loader, fertiliser spreader, bale handlers, agitator,slurry tanker,sprayer etc or else pay contractors to do this work. You have to feed the animals every day indoors in the winter, provide good grass all summer and attend to the animals every day on grass, the heifers will be put in calf in late spring early summer either by a bull or you will have to put them into your yard to be inseminated, the animals will be usually weighted a number of times while you have them and if they have not reached target weight you'll possibly be penalised you'll have fun reaching target weight with all the jex and frx that all the poster boys insist on breeding, the owner will call on a regular basis to view his animals and depending on what he is like you'll quickly realise that you are basically an unpaid employee of the dairy farmer

I've only touched the few main points but take a bit of advice and buy/ keep your own animals and don't be another employee for the dairy farmers

Kevhog1988

https://www.boards.ie/discussion/comment/121852863#Comment_121852863

if the numbers stack up why wouldnt you do it? No point continuing at sucklers and not having a pot to pi55 in out of pride. if being a support service to the dairy industry leaves a profit more should look at doing it

grass10

https://www.boards.ie/discussion/comment/121852908#Comment_121852908

Contract rearing should be costed at full market rent for the land, a charge for the use of buildings yard etc,charge for use of machinery, full costs incurred for the total running cost of the farm for the year including feed,fertiliser etc, charge per hour for every hour incurred on the farm for the entire year

The owner could just let his land out and do whatever with his time but it makes no sense to me why anyone wouls agree to rear a dairy farmers animals for anything less than what I've outlined above as their is too much responsibility involved and you're answerable to the owner of the animals for the health, performance etc of his animals

Kevhog1988

https://www.boards.ie/discussion/comment/121856752#Comment_121856752

Who said they are doing it for less than cost?. What have you got against dairy farmers?

grass10

https://www.boards.ie/discussion/comment/121856819#Comment_121856819

If lads charged out like I have outlined the dairy industry would very quickly stop pushing this contract rearing idea I'm sure their is plenty dairy lads that can do their figures and know the real cost of rearing replacement stock on rented land

It's very popular by teagasc and farming media with a number of years to keep pushing ideas out their like contract rearing, slurry exporting, calf crisis, jex breeding etc and it all seems to be about let the dairy man have a large number of cows and get other farmers to take the calves rear their replacement stock and take their slurry and destroy the beef industry in the process with cull jex cows and jex drystock and yet many dairy men that I speak to tell me that they are now more or less reliant on 6 to 8 milk cheques in the year to keep the whole show going and they don't seem to be any better off at the end of each year

1848

Contract rearing allows dairy farmer to maximise cows on milking platform & can concentrate on cows only. Suits farmer with 100-200 cows who doesn’t have full time labour employed. For dry stock farmer margin is similar to well done calf to beef systems and has stock delivered to the farm. Has to be win-win for both parties.

GrasstoMilk

https://www.boards.ie/discussion/comment/121857159#Comment_121857159

You’re some expert for someone who’s never contract reared

we’re heading into our 6th year at it here. Very happy. Saves me a lot of labour throughout the year and has simplified the system. Contract rearer seems happy too. Making more money than he did at beef any way. He’s after buying a loader, a tractor, a mower, and round baler, reseeded half the farm and this year is going to put in a new slatted tank

he wouldn’t be doing all that if he wasn’t getting a return out of it

Kevhog1988

https://www.boards.ie/discussion/comment/121858585#Comment_121858585

Do they solely take your stock out of interest or rear for multiple farmers?

GrasstoMilk

https://www.boards.ie/discussion/comment/121859688#Comment_121859688

Just ours. His farm size suits the amount we rear. He grows about 15 acres of barley aswell

Aravo

https://www.boards.ie/discussion/comment/121858585#Comment_121858585

It saves a lot ot labour for you and the contract rearer is spending plenty. It sounds like your in the wrong game. Has he/she an off farm income. I notice a lot of new cars at the schools and it's very likely to be borrowed money that pays for a lot of them.