Beefing up dairy margins

At the Cattle Breeders Conference a year or two back I heard someone say that around 60% of UK beef originated from the dairy herd. This year I heard another speaker say that this figure is set to rise to 80%. Yet how many milk producers consider the role they play in producing beef and what potential is there to improve income from calf sales?

With milk yields rising to dizzy new heights on some farms and a focus on breeding small cows for grazing systems on others, the calf is in danger of being regarded as little more than a means to induce the next lactation. As a consequence of this I often hear misinformed media calling male dairy calves “a waste product of the dairy industry”. This is very damaging to the image of UK dairy farming and I believe the message should be about a wasted opportunity rather than a waste product.

The value of male calves from the dairy herd will depend not only on what sex they are but, also, their breed. Cows mated to a beef breed such as Angus or Charolais are likely produce calves that fetch a higher price in market than pure-bred dairy bulls, because of their superior beefing characteristics. The number of cows available to be bred to a beef bull is usually determined by the number of replacement heifers required in the herd each year. Poor fertility and high culling rates will mean a greater proportion of the herd must be bred to a dairy bull. But, we can also increase the value of male dairy calves by breeding more robust milking cows.

Below are two different examples to show how the average calf income per cow in the herd might vary, depending on cow fertility (Calving Interval), calf mortality, herd replacement rates and cow breeding. Example 1 shows the effect of cow fertility, calf mortality and herd replacement rates.

Example 1             Herd A Herd B
Herd size 100 100
Calving interval 430 380
Calves born / year 85 96
Mortality rate 5% 2%
Live calves born 81 94
Live heifer calves 40 47
Live bull calves 41 47
Replacement rate 28% 20%
Heifers retained 28 20
Calves to sell 53 74
Male dairy calves 29 (£50) 20 (£50)
Beef X bulls 12 (£200) 27 (£200)
Beef X heifers 12 (£160) 27 (£160)
53 sold 74 sold
Calf sales revenue £5,770 £10,720
Average calf value £109 £114
Annual income / cow £58 £107

 

Example 2 below shows the added effect of improved beefing characteristics (value) of calves earned from Herd B through breeding more robust cows.

Example 2             Herd A Herd B
Herd size 100 100
Calving interval 430 380
Calves born / year 85 96
Mortality rate 5% 2%
Live calves born 81 94
Live heifer calves 40 47
Live bull calves 41 47
Replacement rate 28% 20%
Heifers retained 28 20
Calves to sell 53 74
Male dairy calves 29 (£50) 20 (£100)
Beef X bulls 12 (£200) 27 (£270)
Beef X heifers 12 (£160) 27 (£200)
53 sold 74 sold
Calf sales revenue £5,770 £14,690
Average calf value £109 £199
Annual income / cow £58 £147

 

In the first table Herd B achieved almost £5,000 higher calf income per year than Herd A through having a lower calving interval, lower calf mortality and lower replacement rate. This equates to £49 per cow per annum extra income (equivalent to 175 litres of milk per cow at 28 pence per litre).

When the calf values were increased for Herd B, in Example 2, the differential in calf income between the two herds rose to nearly £9,000 a year, with Herd B achieving an annual calf income per cow £89 per cow higher than Herd A (equivalent to 318 litres of milk per cow at 28 pence per litre).

The figures I have given here are for illustration purposes only and I have provided them purely to highlight the potential contribution calf income can make on dairy farms and show how and why this might vary from farm to farm. There will be those that say higher yields or smaller cows are more important drivers of profitability on their farms and this may be true. But, I believe that opportunity to generate income from beef calf sales will become an important consideration for milk producers as meat buyers look to source more and more of their requirements from our dairy herds.

Finally, the Free Range Dairy message in here is that by adopting simpler systems and breeding more robust cows we can enhance the value of output on our farms and enjoy the savings associated with better fertility and reduced replacement rates.

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