contract rearing heifers

funny man wrote: »

everyone is entitled to a profit but not everyone makes profit. only a small number of beef farmers make profit without touching their single farm payment. read through the guidelines at €1/head/day stocked at 3l.u./ha as a low cost producer can expect to earn €687/ ha that is a good return that can't be matched by any beef enterprise.

3LU/HA is not exactly a low stocking rate it is way above what most farmers stock in this country. You will be well into nitrates territory. Teagasc figures have a habit of being wrong. I like the way the costing for the different periods is covered by a yellow box with overall figure. There figures are 775 euro to carry a heifer for 665 days. That works out at 1.2/day. Looking at costs it would be costing a lot of that while he is a calf, Wintering for first winter would be about that/day and they have included part of a second winter which will be higher costs up on 2/day. I imagine that they have included feeding costs only and little margin for rearer.

As well ideally one herd/farm and they are allowing 33 euro of a margin/heifer for rearers. (5 million divided by 150,000(5000farms by 30 heifers) leaves that figure). TBH it a load of horse manure

ellewood wrote: »

Is that in the teagasc/moorepark guide for contract rearing heifers cause if it is is for a "low cost producer" what ever that is?

Teagasc's own figures are - Stocked at 3/Ha and getting E1.00/day are,



Margin for land and labour

Average cost producer E288/ha

Low cost producer E687/ha

High cost producer E-120/ha (yes thats a minus)

So take it that were average you get less than E120.00 per acre for youre land and youre labour I agree 100% theres not much work with them but Id rather get paid properly for the small amount of labour thats with them.

Im not saying anybodys wrong to do it for E1.00/day Im just saying that I cant see the point in using a resource ya have and youre own labour just to get paid less than yo would by using that same resource and no labour ie renting it.

why do you compare it with renting? not the same in my opinion. what cost are you putting on nutrients (P,K&Ca) out the gate.
I would prefer to compare like with like and contract rearing of dairy heifers and any other system of farming land is where you decide which enterprise is the most profitable.

Whycontract rear?

No purchase of cattle – no stock loans/cash available

Unlikely to lose money

Qualify for subsidies v rent out land no sfp (sell entitlements)

Make use of existing housing

Guaranteed income – contract

Improved cash flow

Have stock vs renting land

No risk at buying / selling. not exposed to market fluctuations

allowed expectable losses (owner excepts an agreed no. of deaths)

Farmer Pudsey wrote: »

3LU/HA is not exactly a low stocking rate it is way above what most farmers stock in this country. You will be well into nitrates territory. Teagasc figures have a habit of being wrong. I like the way the costing for the different periods is covered by a yellow box with overall figure. There figures are 775 euro to carry a heifer for 665 days. That works out at 1.2/day. Looking at costs it would be costing a lot of that while he is a calf, Wintering for first winter would be about that/day and they have included part of a second winter which will be higher costs up on 2/day. I imagine that they have included feeding costs only and little margin for rearer.

As well ideally one herd/farm and they are allowing 33 euro of a margin/heifer for rearers. (5 million divided by 150,000(5000farms by 30 heifers) leaves that figure). TBH it a load of horse manure

the 3lu/ha is a high stocking rate figure for a whole farm but don't forget if these are spring born calves they will not have a big demand for grass until may and in nearly all cases that I'm aware of the calves don't leave the owners farm until they are weaned and off milk (typically 1st may) and they come back before the second winter because it is unlikely that accommodation would be available. so going by that the 60 1-2 and the 60 calves make up 60 L.u. at mid-summer so the demand on grass is about 20ha less 5ha for silage (60 1-2 first winter) 4L.u./ha or a demand of about 60 kgs/ha until after grass comes back in and this drops back to 3l.u./ha or 45kgs/ha on a good farm I can foresee surplus silage.
I think ye are being over critical of the teagasc figures read down through them they allow for hired labour, depreciation and interest so nothing left out, I'd like to see evidence that beef prices are better or that the beef processors are offering better contracts.
real money to be made here but the key is to be stocked fully and by one farmer.

ellewood wrote: »

Teagasc's LU figure for a Hec is a calf and a yearling/bullin heifer
So on 20 Hec stocked at 3/Lu you would have 60 calves 0-1 and 60 yearlings 1-2.

Tbh I dont see the cost per day charge as the biggest problem, the biggest problem I see is getting 60 calves off the 1 farmer each year, as I see this a a min to make it viable and if other posters are right and theres 600/ha to be made from it that would be E12k ( not forgetting that you would get E9k just to rent it)

So you look after another mams 120 cattle each year for E3k??

Most lads will have 15 or 20 or 25 calves to rear each year so to get to the 60 ya might have to have 3 or 4 different mans calves and all may have different preferences to weight breeding etc


Just another taught a Je calf would prob be ok at E1.00/day....

I would charge as much if not more I have as bullocks and bulls and they have huge intakes.

funny man wrote: »

why do you compare it with renting? not the same in my opinion. what cost are you putting on nutrients (P,K&Ca) out the gate.
I would prefer to compare like with like and contract rearing of dairy heifers and any other system of farming land is where you decide which enterprise is the most profitable.

Whycontract rear?

No purchase of cattle – no stock loans/cash available

Unlikely to lose money

Qualify for subsidies v rent out land no sfp (sell entitlements)

Make use of existing housing

Guaranteed income – contract

Improved cash flow

Have stock vs renting land

No risk at buying / selling. not exposed to market fluctuations

allowed expectable losses (owner excepts an agreed no. of deaths)

You still have to make a profit, most lads at present that do it at one/day are lads not interested in farming. In general in most cases they deal only with maiden heifers. They are only interested in drawing the SFP and DA. The farmers that supplies the heifers keep a close eye on things.

This is totally different and if dairy farmers those beef farmers that make a profit and are good stockmen and actually farm to change over to contract rearing they need to relise it will be ,more expensive than rearing these heifers themselves with there own labour.

The other issue the 33/head margin by teagasc is supposed to cover fixed costs such as housing telephone, ESB etc so a farmer doing same will be at a loss. Like ellwood alluded teagasc state that one herd/farm, if that is the case farmer needs to be rewarded.

You speak about no risk, farming is always a risk. If I have 30 heifers and calves belong to Joe Blog this exposes me to a higher risk with my own stoc as I in the case of a wet spring I may not be able to get my own cattle out early or may have to offload cattle at a loss in the autumn that I might otherwise be able to hold.

Having to destock you own farm may cause a tax liability if present stock are under valued. Now if dairy farmers want to hand there vaulable heifers over to the lads that will have them at 250kgs at 12 months and that fail to bring 10-15% of there caves to mature stock, then by all means 1 euro/day is viable otherwise I want a profit from the enterprise.

Im all for contract rearing
But there's no point changing system be it from suckling to dairy or beef to sheep or from beef to goats, if yer not better off after changing


The teagasc figures are there showing ya need to pay 1.30 to get it done properly

Id love the lads advocating 1.00/day to put up figures on what costs are in it same as teagasc have done and where/how much marine is in it

And if stocked at 1 cow/acre for every calf + yearlong he can milk an extra cow for every calf/yearlong gone to reader ant the cost he's paying the reader is no where near the net profit he gets for the extra cow on that acre

Farmer Pudsey wrote: »

Just to put it in perceptive if according to teagasc a LU is a calf and a heifer then in old money the rearer will be stocked at around 2.5 LU/HA this is a high stocking level to put it in perceptive a suckler farmers in general are stocked at 1.4/HA and lots of drystock farmers are stocked at less than that.

The Derrypatrick herd is stocked at about that level and we can see the grassland managment they had in a wet year when stocked at this level

put it like this if a farm isn't able to carry 3/l.u./ha when silage requirements are only for the yearling heifers and they are the only stock on the farm until the calves arrive in May then I would say that this type of farm would be unsuitable for rearing heifers.

Im all for contract rearing
But there's no point changing system be it from suckling to dairy or beef to sheep or from beef to goats, if yer not better off after changing


The teagasc figures are there showing ya need to pay 1.30 to get it done properly

Id love the lads advocating 1.00/day to put up figures on what costs are in it same as teagasc have done and where/how much marine is in it

And if stocked at 1 cow/acre for every calf + yearlong he can milk an extra cow for every calf/yearlong gone to reader ant the cost he's paying the reader is no where near the net profit he gets for the extra cow on that acre

all the guys that do this are financially better off unless they were at dairying beforehand. if you put the same land charge on beef that you do on contract rearing there wouldn't be one profitable beef farm in the country (excl sfp).

Teagasc figures Don't show that you need to pay 1.30 to get it done properly!

all the figures on the different stocking rates and prices are there in clearly laid out tables.

if your going to start counting the profit that the extra cows that the owner can now milk, then maybe that's why you are justifying 1.30/day.

Theres 3 different farmers round me after going at it 1 beef to contract, 2 ex dairy men who were at beef for a short while. these would all be ladss with plenty of money behind them but would just be looking for an easier time. the payments range from 1.15 - 1.2. All would be on good ground and are lads that i would have considered shrewd. The boys they are doing it for however would all be very big operators and definately if theres flies on them they are paying rent. I know personally at this stage the money would have to be substanially more for me to consider it. The fluctuations in markets for me is the biggest thing, i know lads see it as a disadvantage but it would kill me to be out rearing someone elses heifers if things were going well.

do you know are these guys rearing them from calves up to the month before calving. just would like to know for my own situation.

http://http://www.independent.ie/business/farming/written-agreement-is-the-key-to-contract-rearings-whats-and-ifs-29352043.html

The in-calf heifers would leave the farm before housing and the owner has to accept that these heifers may come back sooner on a wet autumn.

in-calf heifers shouldn't weigh more than 500kgs before the second winter and with no second cut silage to be made grass can be stretched out.

the guidelines are just that, the two parties work out what suits them.

I think Pudsey you have the profile wrong, from what I seen and Miname has backed it up it is usually guys at the top of their game either beef farmers tired of making no money on top of their SFP and don't want to make the commitment to dairying or dairy farmers used to making money trying out beef for a few years then realising there is no real money in it.

I don't want to keep going on about it but there is no other enterprise that a drystock farmer can do that will be more profitable even if dairy farmers give away there beef calves. ye all quote return on land but if that figure is put across the board on all enterprises even average efficient dairy farms would struggle to consistently show profit.

Even when you are locked up the stock can be moved both ways but both herds will be locked up. the one of looking for the heifers to be done at 10c/day less is called the market and Tom Rearer is called the competition and in all sectors of business competition is healthy, but of the cases that I am familiar with all I have seen is that the price rises when the heifers come back to the dairy farmer for the first time if the rearer has done a good job. dairy farmers will pay higher rates if they want to hold on to the rearer which in turn will mean better rearers will be able to command better rates.

the one of 30 heifers agreed and only 15 turning up shows why this is called contract rearing, in the contract the dairy farmer is obliged to send in the agreed number of heifers irregardless of his requirements if he hasn't got that number on a given year the rearer can terminate the contract, accept beef calves or cull cows. which everway the rearer chooses the dairy farmer must pay for 30 heifers if its in the contract. this is why I recommend that you are matched up right from the start with a dairy farmer that can give the rearer enough stock.

EXAMPLE; its all there including labour costs

Against this background, I was interested in a Teagasc open day last week on the farm of Billy Phelan in Kilmacow in south Kilkenny.
For the past five years, Billy has contract-reared heifers for two neighbouring dairy farmers.
He currently has 52 heifer calves and 39 16-month-old heifers alongside calves to two-year-old beef cattle of his own on his 83ac farm.
The initiative for this contract-rearing operation came from the dairy farmer.
How is it going?
"I like the system," said Billy. "Having the regular monthly income is great. I find it a more profitable business than rearing bulls. If you are interested in dairy stock, you can get a buzz out of it."
Having an interest in and knowledge of dairy stock was a recurring theme. Billy was in dairy farming himself up till 2000, and his farm is well serviced with paddocks, roadways and drinking troughs. Working on his own and approaching three score and ten years, he still seemed relaxed with the challenges of the job.
The heifer calves arrive at the start of May and head back to the dairy farmer on December 1 of the following year.
Pat Moylan, of Teagasc, was called in to draw up a contract that would satisfy both owner and rearer and this was available to all at the farm walk.
Basically, Pat costed grass at 7c/kg dry matter (DM), silage at 15c/kg and meals this year at 32c/kg, and calculated the inputs for the 19 months of contract rearing. This amounted to about €326 per head in feed.
Added to this, per head, was €150 for labour, €50 for the car, ESB, phone and water, €45 for depreciation and €50 for insurance and machinery. A few other sundry items totalled the payments at €645 per animal put through the system. This amounts to about €1.11 per head per day.
Teagasc's George Ramsbottom told the open day visitors that good grassland management was the key to leaving profit for the rearer. Billy Phelan operated a leader-follower system with the calves in front.

The owner paid for AI and vet bills and transport but Billy had the job of heat recording and getting the heifers in for AI.
In anticipation of massive dairy expansion, Teagasc has worked on contract rearing. They have drawn up sample contracts which are readily available.
Much of the talk at the open day concerned the matching of rearer and dairy farmer. As in any good marriage, both parties have to want to make the deal work.
Austin Flavin, of Teagasc, advised that a contract be drawn up. If nothing else, this clarified any possible roadblocks.
The first question from the audience was what would happen if there was a TB outbreak among the heifers being reared?
Mark Fitzgerald, from the local DVO, was on hand to reply.
He said: "In this case, all three herds would be locked up. However, provided there was a bone-fide contract, in-calf heifers can be moved on welfare grounds and normal TB compensation would be payable."
In their booklet, Guidelines for the Contract Rearing of Replacement Heifers, Teagasc claimed that the return to land and labour for the rearer ranged from a high of €418/ac for a low-cost, tightly stocked producer (€1.20/hd/day) to a loss of €55/ac for a high-cost, lowly stocked rearer (€0.90/hd/day).
As with all farm enterprises, good operators will make the best profit. George Ramsbottom reckoned that a return of €300 to €500 per hectare for labour and land could be expected with average-to-good management. If a person gets the name of being a good rearer, dairy farmers will seek him or her out. Even within Teagasc, the farm at Oakpark Carlow is contract-rearing replacement heifers for the Moorepark herds.
Teagasc is planning to establish a database of potential contract rearers and dairy farmers wanting to use the service. Names will not be published but Teagasc will act as a kind of dating agency and introducing the parties.
At the Billy Phelan farm walk there were many 'what if' questions from the audience. What if an animal dies? What if weight targets are not met? What if the summer is too wet, or even too dry, and the grass doesn't grow?
The answer to these questions was to have these issues addressed in the initial contract.
Irish Independent

Lads it's all about quantity and quicker turnover.
All farmers need to tight with the input to gain a margin of a profit. Time and time again I saw many buying over priced meal and welfare cost where breaking even would be a achievement in its self

funny man wrote: »

I think Pudsey you have the profile wrong, from what I seen and Miname has backed it up it is usually guys at the top of their game either beef farmers tired of making no money on top of their SFP and don't want to make the commitment to dairying or dairy farmers used to making money trying out beef for a few years then realising there is no real money in it.
[COLOR="rgb(46, 139, 87)"]It will only take them 1 year to figure out that theres no money in at E1.00 day either and it will ruin it on everybody interested in it both rearer and farmer cause he wont rear them properly and everybodys unhappy with it[/COLOR]

I don't want to keep going on about it but there is no other enterprise that a drystock farmer can do that will be more profitable even if dairy farmers give away there beef calves. ye all quote return on land but if that figure is put across the board on all enterprises even average efficient dairy farms would struggle to consistently show profit.
[COLOR="rgb(46, 139, 87)"]again why change from 1 unprofitable system to another unprofitable system
contract rearing is different to a lad buying heifers to fatten himself, with rearing you are providing a service and with that you charge for anything you use in providing that service for the dairy farmer, a plumber wont charge you any less for a call out after he has all the repayments paid on his van or if he was already passing youre door or the vet charges me a full call out even when he is over in the neighbours and I call him over to look at a sick calf (100yards). Providing a service is different the dairy farmer has the choice too that if the service dosent do what he wants, is too dear etc he has the choice not to use that service or get some one else to do it or do it himself.
[/COLOR]
Even when you are locked up the stock can be moved both ways but both herds will be locked up. the one of looking for the heifers to be done at 10c/day less is called the market and Tom Rearer is called the competition and in all sectors of business competition is healthy, but of the cases that I am familiar with all I have seen is that the price rises when the heifers come back to the dairy farmer for the first time if the rearer has done a good job. dairy farmers will pay higher rates if they want to hold on to the rearer which in turn will mean better rearers will be able to command better rates.

No what will happen is that even if the worlds best rearer at E1.50/ day next year you will be told that rearer z down the road will do it for E1.00/day and if you cant match it he will get him you see it every year with lads with silage gear cheapest not really the best will always get work

the one of 30 heifers agreed and only 15 turning up shows why this is called contract rearing, in the contract the dairy farmer is obliged to send in the agreed number of heifers irregardless of his requirements if he hasn't got that number on a given year the rearer can terminate the contract, accept beef calves or cull cows. which everway the rearer chooses the dairy farmer must pay for 30 heifers if its in the contract. this is why I recommend that you are matched up right from the start with a dairy farmer that can give the rearer enough stock.

[COLOR="rgb(46, 139, 87)"]Didnt know that so thanks
Its going to be difficult to match rearer exactly to a farmer tho, but deffo would be ideal if they could be matched properly

Another point is Mahoney was getting on to Gg that when he was off doing his own silage other aspects suffered calf and heifer rearing, the fact that a farmer who contract rears calves and heifers must have more time to give to other maybe more important jobs ie milking, breeding cows, silage, even having more time to negotiate better deals on meal, fert and even banks, instead of taking a quate over phone if he has the time he can reserch better deals thet mightne have happened if he was rearing his own stock.
[/COLOR]
EXAMPLE; its all there including labour costs No land charge tho

Against this background, I was interested in a Teagasc open day last week on the farm of Billy Phelan in Kilmacow in south Kilkenny.
For the past five years, Billy has contract-reared heifers for two neighbouring dairy farmers.
He currently has 52 heifer calves and 39 16-month-old heifers alongside calves to two-year-old beef cattle of his own on his 83ac farm.
The initiative for this contract-rearing operation came from the dairy farmer.
How is it going?
"I like the system," said Billy. "Having the regular monthly income is great. I find it a more profitable business than rearing bulls. If you are interested in dairy stock, you can get a buzz out of it."
Having an interest in and knowledge of dairy stock was a recurring theme. Billy was in dairy farming himself up till 2000, and his farm is well serviced with paddocks, roadways and drinking troughs. Working on his own and approaching three score and ten years, he still seemed relaxed with the challenges of the job.
The heifer calves arrive at the start of May and head back to the dairy farmer on December 1 of the following year.
Pat Moylan, of Teagasc, was called in to draw up a contract that would satisfy both owner and rearer and this was available to all at the farm walk.
Basically, Pat costed grass at 7c/kg dry matter (DM), silage at 15c/kg and meals this year at 32c/kg, and calculated the inputs for the 19 months of contract rearing. This amounted to about €326 per head in feed.
Added to this, per head, was €150 for labour, €50 for the car, ESB, phone and water, €45 for depreciation and €50 for insurance and machinery. A few other sundry items totalled the payments at €645 per animal put through the system. This amounts to about €1.11 per head per day.
Teagasc's George Ramsbottom told the open day visitors that good grassland management was the key to leaving profit for the rearer. Billy Phelan operated a leader-follower system with the calves in front.

[COLOR="rgb(46, 139, 87)"][COLOR="rgb(46, 139, 87)"]Yes but even this example gives E1.11 as the charge without land
[/COLOR][/COLOR]
The owner paid for AI and vet bills and transport but Billy had the job of heat recording and getting the heifers in for AI.
In anticipation of massive dairy expansion, Teagasc has worked on contract rearing. They have drawn up sample contracts which are readily available.
Much of the talk at the open day concerned the matching of rearer and dairy farmer. As in any good marriage, both parties have to want to make the deal work.
Austin Flavin, of Teagasc, advised that a contract be drawn up. If nothing else, this clarified any possible roadblocks.
The first question from the audience was what would happen if there was a TB outbreak among the heifers being reared?
Mark Fitzgerald, from the local DVO, was on hand to reply.
He said: "In this case, all three herds would be locked up. However, provided there was a bone-fide contract, in-calf heifers can be moved on welfare grounds and normal TB compensation would be payable."
In their booklet, Guidelines for the Contract Rearing of Replacement Heifers, Teagasc claimed that the return to land and labour for the rearer ranged from a high of €418/ac for a low-cost, tightly stocked producer (€1.20/hd/day) to a loss of €55/ac for a high-cost, lowly stocked rearer (€0.90/hd/day).

[COLOR="rgb(46, 139, 87)"]The 418/acre is the high output/low cost example how many are going to achive that? but if the do its a nice earner
If ya take an average of both above it works out at E181/acre the same as renting, I have yet to see anyone explain to me why I should rear heifers for some one else for the same as what I would get if I rented out[/COLOR]
As with all farm enterprises, good operators will make the best profit. George Ramsbottom reckoned that a return of €300 to €500 per hectare for labour and land could be expected with average-to-good management. If a person gets the name of being a good rearer, dairy farmers will seek him or her out. Even within Teagasc, the farm at Oakpark Carlow is contract-rearing replacement heifers for the Moorepark herds.
Teagasc is planning to establish a database of potential contract rearers and dairy farmers wanting to use the service. Names will not be published but Teagasc will act as a kind of dating agency and introducing the parties.
At the Billy Phelan farm walk there were many 'what if' questions from the audience. What if an animal dies? What if weight targets are not met? What if the summer is too wet, or even too dry, and the grass doesn't grow?
The answer to these questions was to have these issues addressed in the initial contract.
Irish Independent

[COLOR="rgb(46, 139, 87)"]Funny man thanks very informative post.[/COLOR]

I wonder would lads who are expanding or thinking of getting heifers reared would put up what figure they would be happy to pay to get a heifer reared for 19 months or about 570 days

Any contracts ive seen go from May 1st year 1 to Dec 1st year 2 so somewhere between 570 - 580 days depending on dates.

So in year 2 you would have

Jan 1st-Apr 1 yearling per acre 122 days

May 1st- Dec 1 yearling/maiden per acre and 213 days
1 calf per acre 213 days
Dec 1 calf per acre 31 days
Total 579 days

The maiden is gone on 1st dec before the expensive winter part, with good grass after July you should be able to build up a wedge for Aug and Sept and half of Oct, So you may have to supplment with bales outside for 40-50 days say half grass half wraps
There should be plenty of wraps made as in May stocking rate wont be too high and you should be able to make enough to supplment the maidens and winter the calves.

Farmer Pudsey wrote: »

I do not think so, it shows 415 summer(grazing) and 210 Winter(housing) days this is 625 day a bit less than 19 months, It shows costs of 775 euro attached to this time. If a heifer was returned 30 days before calving we are left with 75 days a 10 week old calf.

This in my opinion equates to contract rearing cost and the document shows it costs 775 euro and you need to add a margin to that. It is pretty clear cut except the yellow highlight blanks out the costs.

On the document above I just scrolled down a few pages and the first thing that struck me was stocking rates. Teagasc are quoting a stocking rate of 3 units/HA equivlent to 2.5LU/ha on the beef e-flow monitor the stocking rate is 1.7LU/ha and the margin levels in theory are less for an untried system.

Live weight produced is about 600kgs/ha in the beef e-flow by teagasc if a calf comes in at 100kgs and a heifer leaves the farm at 500kgs this rearer will have to be producing 1200 kgs/HA. And this is with animals that have poor conversion rates.

The more I look at the more I have to question the sums attached to the Teagasc Doc. I am also questioning my own sums and am definatly of the opinion 1.5/day and above is money required for this. Lads doing it at less are only fooling them selves. The more you look at the figure the more see the errors oin the teagasc rearing doc.

1.5/day?? I hope milk price is north of 40c/l if you think dairy farmers can justify paying this to a contract rearer.
Not in your wildest dreams is this a realistic figure.