Is Dairy Beef Robbing the profit from your Dairy farm?

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I have spent quite a lot of time drafting and redrafting this article so as not to make it sound like a rant or too much like I’m standing on a soap box. I will try to balance the point so as to generate thought and not resentment.

In this article I want to specifically look at dairy business that keep their beef calves both Holstein bulls and beef crossed cattle which maybe voluntary or enforced (due to TB restrictions).

I believe that in many cases, on farms that run both dairy and beef enterprises, that one (usually the dairy) ends up subsidising the other both financially and physically.

There are many resources that cross over in these situations. Labour, feed, bedding, shed space, grazing and forages to name a few. So we are not just looking at a case of keeping the beef and making sure that financially it stacks up but looking at all the secondary ramifications of keeping them. What alternatives could be done with the shed the beef cattle are in? Is land being given up to graze dairy beef that could make silage or other forage for the dairy? Does your workforce spend excessive time on the beef that could be better spent on the dairy? Do you find yourself buying in feed (forage or concentrate) to feed as you have so many mouths to feed? All these are questions that should be thought on when evaluating your dairy beef enterprise.

I have had the counter argument thrown at me that beef will grow into money, and yes this is true but is there anymore or even any profit at all in it? Does it do so at the expense of your dairy cows?

Tb is a big factor when it comes to dairy beef. Red markets are sometimes seen as negative thing with the perception that cattle get ‘stolen’ too cheap, but on studying market reports over time I have seen cattle at certain ages go for ‘clean’ money (this is usually calves, or big store) so don’t discount this option. Also think about working with an approved finishing unit (AFU) to set up a mutually beneficial working relationship as an outlet for your dairy beef.

Please don’t think I’m trying to say don’t do it at all costs. I would love for some questioning to go on within your units and say, is this working for me or should I change it to work better? or could relieve some pressure or even make improvements to my dairy business if I didn’t keep them?

It may be that dairy beef does suit you and you have the ability to make it work for you.

Dairy beef can be included in your budget to make up short falls in cash flows and profits at certain times of year if planned correctly.

It can be a good way to use up second rate or left over forages and control grazing covers after a dairy herd grazing.

It can be profitable and run in sync with the dairy enterprise to add to the overall farm income.

It can be used as a piggy bank that can be raided to free up cash for investment.

Then there is the animal welfare point that a lot of retailers and processors are driving, of not euthanizing bull calves and the public image.

So, it’s not just a bad news, but I urge farmers to think about it. Cost out the financial and physical aspects and have a plan. Sometimes it not just the cheapest financial system that makes a profit. For example, extensive reared Angus crosses, grading at best R= 4-, kept on farm for 28 mnths can take up grazing area, forage and labour and add extra work load during winter housing.  Whereas intensive fed Holstein bulls killed at 12 – 13 mnths old, fed on straw and grain (with a small amount of protein) grown quickly can take up less space and have no direct drawings on the dairy herd.

To sum up each situation is specific to each farm. Consider both financial and physical costs of keeping dairy beef cattle. Don’t be afraid to change your system and sell calves or store cattle if time and situation suits. Get advice on red markets if selling while under TB restrictions or look for an AFU unit to sell to direct as the right cattle can still make good money.

Finally, its not just the obvious costs that can affect your business, it’s the hidden or secondary effects that can erode your margins and put more strain on the whole farm business.

CMC Team

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