contract rearing heifers

Dawggone · 16-09-2014 12:07AM

Deepsouthwest wrote: »

. I was nearly 'ran' from the meeting! They said isn't more than they're making at the moment

There's the rub......

Greengrass1 · 16-09-2014 12:07AM

Dawggone wrote: »

Why not? I think that it's a very good point.
If there is a prolonged low milk price farmers will put expansion on hold. Why get bigger to lose more money?
This whole contract rearing thing is built on expansion. If dairy doesn't get bigger there is no need for the service.
As for the replacement argument - I wouldn't agree.

Take a large xbred herd what would the replacement percentage be - 10%?
10% of 500 cow herd isn't going to make any beef farmer.
Or a 1000 cows either.

stirring.....

Even leasing land to rear heifers will be hard payed for if mikk takes a hit for a while and its not like ye can just drop that if your in an agreement

ellewood · 16-09-2014 12:15AM

frazzledhome wrote: »

Who'll they sell heifers to?
Will they not need % for replacements?
I have never considered selling stock as a method of shoring price

Don't think part 2 holds water

Frazzledhome maybe it different up near you but around here theres fr heifer calves and incalf heifers in abundance, I'll freely admit im not well up on dairy but I know Glanbia have had a few cuts to prices now and lads that may have been thinking about expanding are now trying to get rid of as much 'excess' stock before the winter-it didnt take much to make them jittery is what I taught.

Contract rearing will work well if numbers are there - a lad expanding wanting 60 heifers a year reared is a lot more attractive than 6 lads with 10 each to keep happy ( if going on 10% replacement on 100 cows)

darragh_haven · 16-09-2014 05:34AM

Deepsouthwest wrote: »

Contact rearing came up at my last discussion group meeting. Two lads were arguing 80/90cents/day was def enough to pay. They were giving out about Teagasc for coming up with this €1.20/1.30/day figure. I was trying to argue did they really think beef lads would be interested in doing this for as little 80cents, it has to be made attractive to them or it will never take off. I was nearly 'ran' from the meeting! They said it isn't more than they're making at the moment

I've had 3 farmers in the past 14 months sound me or my dad out about contract rearing. Not one broke the €1/day mark when a ball park figure was asked. One of those enquiring was a good friend and said "shur it's more than your making now."
Told himI'd make about the same at the bullocks working for myself than rearing heifers for that price and working for a bollix.

Would I make any money if I put a land charge of €200/acre profit & loss at 80 to 90 cent a day. I would in my hole.

DSW, your right, it has to be made attractive to the guy taking on the contract. He knows I'd be facilitating him to have more high income beasts (milking cows) on his home block, rather than it being stocked heifers that are a drain on resources.

Rant over...... for now, more to follow

frazzledhome · 16-09-2014 06:30AM

ellewood wrote: »

Frazzledhome maybe it different up near you but around here theres fr heifer calves and incalf heifers in abundance, I'll freely admit im not well up on dairy but I know Glanbia have had a few cuts to prices now and lads that may have been thinking about expanding are now trying to get rid of as much 'excess' stock before the winter-it didnt take much to make them jittery is what I taught.

Contract rearing will work well if numbers are there - a lad expanding wanting 60 heifers a year reared is a lot more attractive than 6 lads with 10 each to keep happy ( if going on 10% replacement on 100 cows)

Guys cutting and running at the first sign of trouble aren't the people you'd want to be doing business with.

If they're that keen to offload heifers cause if a price drop, they don't have any plan. Oh yea if they're that stuck there's opportunity there for others, cheap heifers:)

Dawggone · 16-09-2014 07:49AM

frazzledhome wrote: »

Guys cutting and running at the first sign of trouble aren't the people you'd want to be doing business with.

If they're that keen to offload heifers cause if a price drop, they don't have any plan. Oh yea if they're that stuck there's opportunity there for others, cheap heifers:)

Keynes the economist said when the facts change, he changes strategy.

Why would a business plough on with the same plan? Plan B has to kick in when the economic climate changes. Irish developers comes to mind....:)

I bought some cows in Holland and Germany early on this year and they were hard found. Price has dropped €400/head and they are hounding me to buy as the market is now very bearish.

If any dairy business can't duck and dive with circumstance, they will feel the consequences. Quota is gone now.

Methinks what you wrote above is the spin that the dairy men are giving prospective "victims"!!!!

still stirring.......

frazzledhome · 16-09-2014 08:14AM

Dawggone wrote: »

Keynes the economist said when the facts change, he changes strategy.

Why would a business plough on with the same plan? Plan B has to kick in when the economic climate changes. Irish developers comes to mind....:)

I bought some cows in Holland and Germany early on this year and they were hard found. Price has dropped €400/head and they are hounding me to buy as the market is now very bearish.

If any dairy business can't duck and dive with circumstance, they will feel the consequences. Quota is gone now.

Methinks what you wrote above is the spin that the dairy men are giving prospective "victims"!!!!

still stirring.......

Have you nothing better to do. Cover that maize pit would more use than stirring shyte:)

ellewood · 16-09-2014 08:34AM

Greengrass1 wrote: »

Even leasing land to rear heifers will be hard payed for if mikk takes a hit for a while and its not like ye can just drop that if your in an agreement

frazzledhome wrote: »

Guys cutting and running at the first sign of trouble aren't the people you'd want to be doing business with.

If they're that keen to offload heifers cause if a price drop, they don't have any plan. Oh yea if they're that stuck there's opportunity there for others, cheap heifers:)

I'd like to hear from anyone who has experiance of rearing over a number of years

Is it only a rolling yearly contract or are they contracts done up for a set no of heifers for a set no of years ie say 50 calves on 1st May for 4 years with review's built in?

It would gives both lads sureity for a few years ie the dairy lad would know that his rearing is sorted for a few years and can concentrate on milking and even when beef goes to E5/kg he knows his rearer isnt going to jump ship
Also if rearer sells his own stock to concentrate on rearing heifers he knows dairy lad wont drop him if price drops or whatever.

The most obvious question is how does a dairy farmer know how many heifers he will have next year, let alone know how many he will have in 2 or 3 years time.

Anyone with experiance of rearing over a number of years, how does it work out?

Farmer Pudsey · 16-09-2014 11:35AM

Deepsouthwest wrote: »

Contact rearing came up at my last discussion group meeting. Two lads were arguing 80/90cents/day was def enough to pay. They were giving out about Teagasc for coming up with this €1.20/1.30/day figure. I was trying to argue did they really think beef lads would be interested in doing this for as little 80cents, it has to be made attractive to them or it will never take off. I was nearly 'ran' from the meeting! They said isn't it more than they're making at the moment

These lads are away with the fairy's they are too used to the lad down the road that takes them and they look after them and he can draw SFP. It came up at our discussion group. A few lads were interested but not at Teagasc pricing.

We got the Teagasc costing's and weight gain figures. On weight gain taking the middle of the road animal ( and more than likly the efficent converter) a New Zealand/British Fresian cross you be getting a 70kg calf in May and expected to give back a 525kg heifer in Novembember 12 months. That is a LW gain of 455kgs or over 0.8kgs/day on average. If you were stocked at 3 units/HA ( 3 weanlings and 3 in-calf heifers) 0r 2 ton LW/HA every autumn so the concensus was that the in-calf heifers or some of them would need to be housed for about a month so as to graze weanlings until late November.

No lad was interested at figures quoted. Destocking present system was considered a big issue and tax implications that it might cause. It was more viable for a lad starting up or expanding. Farm fit was an issue where dairy farmers want only there own cattle on the farm and AI of heifers was another issue even to fulltime farmers who were mostly older than me and I am no spring chicken.

2 units/HA or a stocking rate of 1.6 ish LU/HA was considered more viable in most cases. It was considered that this was at or around most beef farms present stocking rate. When this was factored it was considered that marging was nowhere near most lads present system. Another anomoly was DA payment and Teagasc advisor said that with present rules dairy heifers contracted in could not be factored in for this stocking rate. On a 60 acre farm this equates to a loss of 1800 euro. It was also pointed out that even if you did fullfill the stocking rate on an outside farm the Department could change the rules retrospectively as they did with stocking rates a few years ago and this could effect your DA. It was considered that the Teagasc Document was put in place from a dairying viewpoint.

An issue regarding longterm viability of system was aired regarding effect of milk price on system. This was especially important to lads that would destock to enter system. Most could see the system coming under pressure in two senario's. Milk price was one, the other that was raised was regarding in 4-6 years time as expansion in dairy system naturally stops that these farms that are expanding may drop from replacement rates of 30%+ to 10%. This will allow dairy farmers to force down price of contracts and some may revert back inhouse again or rent land nearby.

Dawggone · 16-09-2014 11:57AM

frazzledhome wrote: »

Have you nothing better to do. Cover that maize pit would more use than stirring shyte:)

Pits done. I'll stop stirring now.

josimar16 · 18-09-2014 11:23PM

New to boards - but felt I had to comment - currently have 40 sucklers and making a loss for past 3 years including SFP. Sucklers going over next 5 months. I have 2 guys lined up for next year to contract rear their heifers - both milking about 150 cows and both will be giving me 50 bulling heifers approx. I will have them for 200 days approx. April to Oct @ €1/hd/day which is €20,000 to me. I have 100 acres split by a road - I will have to put up separate handling/crush facility on one side so I can keep both batches separate. My only cost will be fertiliser - no silage - no vet - no contractor - no slurry - no meal - no transport - no tags - etc etc. I have winter accommodation for 80/90 cattle but going to leave sheds empty for winter. I would need €2/hd/day to house heifers for winter. Most important thing with contract rearing is to find the right guys who have enough heifers - anyone fighting over 10-20 cents is not worth dealing with. If you are a decent grassland manager with good facilities then €1 is more than reasonable (for both parties). To get money coming in the gate you need a decent amount of heifers - so if you get a guy with 20 heifers for 20 days at €1 then you are going to bring €4000 in the gate.

Farmer Pudsey · 18-09-2014 11:43PM

josimar16 wrote: »

New to boards - but felt I had to comment - currently have 40 sucklers and making a loss for past 3 years including SFP. Sucklers going over next 5 months. I have 2 guys lined up for next year to contract rear their heifers - both milking about 150 cows and both will be giving me 50 bulling heifers approx. I will have them for 200 days approx. April to Oct @ €1/hd/day which is €20,000 to me. I have 100 acres split by a road - I will have to put up separate handling/crush facility on one side so I can keep both batches separate. My only cost will be fertiliser - no silage - no vet - no contractor - no slurry - no meal - no transport - no tags - etc etc. I have winter accommodation for 80/90 cattle but going to leave sheds empty for winter. I would need €2/hd/day to house heifers for winter. Most important thing with contract rearing is to find the right guys who have enough heifers - anyone fighting over 10-20 cents is not worth dealing with. If you are a decent grassland manager with good facilities then €1 is more than reasonable (for both parties). To get money coming in the gate you need a decent amount of heifers - so if you get a guy with 20 heifers for 20 days at €1 then you are going to bring €4000 in the gate.

Are you receiving DA at present if so unless you fullfill minimum stocking rate you will lose that. That is about 3K or 15c/day. Are the dairy afrmers picking up cost of herd test, dosing, vet/sick cattle etc.

ellewood · 18-09-2014 11:45PM

If u sell 40 cows 40 weaning and 40 1.5 year cattle without having to buy back in stock will u not have a huge tax bill next year??

not knocking the other part at all 20k is 20k:-)

ellewood · 18-09-2014 11:52PM

Also if u get 20K income and you only have fert as expense to go against it will u not have another big tax bill next year as well

If you rent it on a long term lease can you get the 20K tax free and no work!!

Must be that time of the year again when I have Tax going round in me head:D now wheres that missing statement - I cant keep telling the taxman the dog ate it again...

josimar16 · 19-09-2014 12:14AM

Pudsey - I'm not in DAS (but hopefully after article in IFJ today I might be in with a shout in 2018!) and all vet costs being picked by owner - my job will be to administer all vaccines etc but not pay for them.

Ellewood - when you sell stock you only pay tax on difference between what you sell animal for and book value ie if you sell suckler for €1200 and she is valued at €800 on books then you pay tax on €400.

Looked at renting out land - but have father who likes knocking about the farm and have 3 kids who I want to be reared on a farm (and I also enjoy it myself) so yes would have made more by renting out land.

I'm hoping I will have tax bill going forward - better than making a loss any day!!

josimar16 · 19-09-2014 12:15AM

By the way if I was in DAS I would probably buy a few Angus heifer calves from one of farmers to cover minimum stocking rate.

darragh_haven · 19-09-2014 10:12AM

josimar16 wrote: »

Pudsey - I'm not in DAS (but hopefully after article in IFJ today I might be in with a shout in 2018!) and all vet costs being picked by owner - my job will be to administer all vaccines etc but not pay for them.

Ellewood - when you sell stock you only pay tax on difference between what you sell animal for and book value ie if you sell suckler for €1200 and she is valued at €800 on books then you pay tax on €400.

Looked at renting out land - but have father who likes knocking about the farm and have 3 kids who I want to be reared on a farm (and I also enjoy it myself) so yes would have made more by renting out land.

I'm hoping I will have tax bill going forward - better than making a loss any day!!

Whats the story in your situation with getting the heifer in calf. Do you have dates to hit, minimun % in calf by a certain date, All heifers AI'd or just running with a stock bull. what happens if you dont hit targets set out?

or do you get them after being put in calf???

As always, the devil is in the details. After talking to 2 guys that were in heifer rearing, both said that the the penalties for not hitting targets (dates) were what drove them out and (more importantly) both were doing it for 90 cent/head/day or under.

Targets have to be achievable - farmer supplying herifers shouldn't expect more that he would achieve himself

frazzledhome · 19-09-2014 11:34AM

darragh_haven wrote: »

Whats the story in your situation with getting the heifer in calf. Do you have dates to hit, minimun % in calf by a certain date, All heifers AI'd or just running with a stock bull. what happens if you dont hit targets set out?

or do you get them after being put in calf???

As always, the devil is in the details. After talking to 2 guys that were in heifer rearing, both said that the the penalties for not hitting targets (dates) were what drove them out and (more importantly) both were doing it for 90 cent/head/day or under.

Targets have to be achievable - farmer supplying herifers shouldn't expect more that he would achieve himself

Targets and contract is a load of bollix. If you need to insert this detail to do business with someone I think you need to make other arrangements. We only did it for a year and it was a great success no targets and no contract

darragh_haven · 19-09-2014 01:58PM

frazzledhome wrote: »

Targets and contract is a load of bollix. If you need to insert this detail to do business with someone I think you need to make other arrangements. We only did it for a year and it was a great success no targets and no contract

That's grand if your dealing with some that has experience that is giving you the heifers, but some are too interested in the weighing scales and the tape than the end result, which should be heifers returned in calf and in good condition.

I suppose my problem is that the guy that was most serious about me contract rearing heifers for him had read too much out of a book and not enough of real life

trixi2011 · 19-09-2014 02:22PM

frazzledhome wrote: »

Targets and contract is a load of bollix. If you need to insert this detail to do business with someone I think you need to make other arrangements. We only did it for a year and it was a great success no targets and no contract

I don't know about no targets no contract!! now its grand if some one you know and trust is rearing your heifer but its a different ball game if your relying on someone at the other end of the country and have limited input/contact. At the end of the day your heifers are the future of the herd and any limit on their potential can affect the future of your business.

frazzledhome · 19-09-2014 02:23PM

trixi2011 wrote: »

I don't know about no targets no contract!! now its grand if some one you know and trust is rearing your heifer but its a different ball game if your relying on someone at the other end of the country and have limited input/contact. At the end of the day your heifers are the future of the herd and any limit on their potential can affect the future of your business.

Small country here as you know, 10 mins on phone and you'd know his granny's maiden name

trixi2011 · 19-09-2014 02:27PM

frazzledhome wrote: »

Small country here as you know, 10 mins on phone and you'd know his granny's maiden name

True I get what your saying , just seen heifers coming back under grown and not in calving condition due to contracts not being sown up.

funny man · 19-09-2014 02:53PM

josimar16 wrote: »

New to boards - but felt I had to comment - currently have 40 sucklers and making a loss for past 3 years including SFP. Sucklers going over next 5 months. I have 2 guys lined up for next year to contract rear their heifers - both milking about 150 cows and both will be giving me 50 bulling heifers approx. I will have them for 200 days approx. April to Oct @ €1/hd/day which is €20,000 to me. I have 100 acres split by a road - I will have to put up separate handling/crush facility on one side so I can keep both batches separate. My only cost will be fertiliser - no silage - no vet - no contractor - no slurry - no meal - no transport - no tags - etc etc. I have winter accommodation for 80/90 cattle but going to leave sheds empty for winter. I would need €2/hd/day to house heifers for winter. Most important thing with contract rearing is to find the right guys who have enough heifers - anyone fighting over 10-20 cents is not worth dealing with. If you are a decent grassland manager with good facilities then €1 is more than reasonable (for both parties). To get money coming in the gate you need a decent amount of heifers - so if you get a guy with 20 heifers for 20 days at €1 then you are going to bring €4000 in the gate.

on the winter accommodation this may be an opportunity down the road to take in dry cows from either farm.
your second point on finding the right guys is spot on. there is a lot of wrong information out there in relation to contract rearing, you need to contact either teagasc or http://landmobility.ie/collaborative-farming/.
on the DAS you do not need stock in your name this is more mis-information, use the B&B form and notify the department of Agri on your agreement. best of luck, smart move!

funny man · 19-09-2014 03:04PM

trixi2011 wrote: »

True I get what your saying , just seen heifers coming back under grown and not in calving condition due to contracts not being sown up.

I disagree, if a number of animals are coming back under conditioned then this is more to do with the wrong contract rearer than a contract, my contracts have no target weights or no empty rates built in, but there is a bonus of cull cows based on % of heifers returned in-calf. I organise the ai and the bulls and I don't want my rearer putting my smaller calves on 3kgs of barely to make a weight, we "discuss" an issue and we agree on usually what the rearer finds workable like just giving preferential grazing to these animals.

josimar16 · 19-09-2014 05:42PM

I have contracts drawn up - Teagasc have 2 templates - one is flat rate and other is a bonus/penalty arrangement - we have gone for flat rate. Yes weights will have to be met and 90% of heifers in calf (have agreed with both that weight gain of 22kgs per month weight gain needs to be achieved - this means if heifer comes in light, then it's not my fault). I have to AI for 3 weeks and stock bull after that (supplied by owner). Teaser bull also being provided by owner for AI.

Onus is on me to ensure heifers hit weights and go incalf - otherwise I won't be getting heifers next year (which I wouldn't blame owners for). Can't tie into long-term agreement for this reason. But if you are hitting targets and some guy is offering to rear heifers to 80 - 90c then owner is not going to take risk of moving to cheaper guy for small saving - if owner gets right guy doing job right - he is not going to move. I would like to think that after year or 2 doing job right that we could ditch contracts - but I think if I was in owners shoes, I would like contract too.

I am looking at option of taking in cows from a third guy for wintering - but not sure if he will be willing to pay €2/head/day - if not, I will sell silage instead.

trg · 15-11-2014 09:47PM

Hey there, anyone any idea what the position is with VAT on income earned from rearing heifers?
It falls outside the usual rates for sale of livestock, milk or crops.

Also I note someone mentions B&B form, would you have a link? I couldn't find.

Thanks all

Sam Kade · 15-11-2014 11:20PM

trg wrote: »

Hey there, anyone any idea what the position is with VAT on income earned from rearing heifers?
It falls outside the usual rates for sale of livestock, milk or crops.

Also I note someone mentions B&B form, would you have a link? I couldn't find.

Thanks all

http://www.agriculture.gov.ie/animalhealthwelfare/animalidentificationmovement/cattle/certificateofcmmscompliance/

contract rearing heifers

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