Farmers question Teagasc dairy-beef profitability targets – Agriland.ie

Large crowds of farmers, as well as beef and dairy industry personnel attended the Tipperary dairy-beef demonstration farm open day which took place in Fethard, Co. Tipperary this week.

The farm itself consists of 112ha of some of the best agricultural land in Ireland. 95ha are used for the dairy-beef enterprise, 10ha are used to grow cereals and the remaining 7ha consists of farmyard and roadways.

The demonstration farm is managed and operated by Jack Spillane with the help of Stephen Baskin, who works part-time on the farm.

The yard cleanliness, grass quality and contentment of the livestock on display during the open day (Wednesday, July 10) was a testament to the impressive farm management abilities of the farm staff.

The farm is buying between 325 to 335 dairy-beef calves every spring and these are reared through and finished as steer and heifer beef when they reach adequate fat cover, with a target of slaughtering all cattle before their second winter.

Dawn Meats and Shinagh Estates have together provided the capital of €980,000 required to set up Ballyvadin Beef Farm Ltd and Teagasc are covering the 15-year lease land costs which are not included in the farm budget.

At the opening stand, Paul Nolan from Dawn Meats welcomed farmers to the event and encouraged farmers to “feed in” their opinions, saying “we’re not precious, we will take any criticism if we can learn from it and drive this on together”.

The Teagasc dairy enterprise leader Padraic French told beef farmers at the event that a €1,000/ha net margin is the target for the dairy calf to beef system and a €50/hour net profit/hour worked is achievable from the system.

Many farmers in attendance at the event called these target profitability figures into question on the day.

While the Teagasc dairy enterprise leader was outlining a €1,000/ha target net margin, Teagasc’s own DairyBeef500 campaign is targeting a more realistic net margin of €500/ha for dairy calf to beef farmers.

The DairyBeef500 team at Teagasc have emphasised numerous times that exceeding a net profit of €500/ha net profit “is difficult” for farms stocked under 170kg organic nitrogen (N)/ha – where all farms could possibly have to be stocked in the future.

Full labour costs are included, with no Basic Income Support for Sustainability (BISS) payment included.

This year, the farm is forecast to make a net margin of €423/ha – a long way off the €1,000/ha net margin target which the farm hopes to achieve within five years.

The breakeven beef price for the farm is approximately €4.42/kg.

The Teagasc dairy enterprise leader believes the net margin of the beef farm can more than double in the next four years by “increasing carcass weight through genetic selection of sires, reducing concentrate supplementation through higher-quality grass and grass silage use and increasing grass production and utilisation to match the stocking rate”.

Calves are fed no concentrate feed from one month post turnout until September when concentrates are introduced again.

Heifer carcass weights are varying from 232-269kg and steer carcass weight are varying from 276-309kg.

It is important to highlight that the system in place on the farm involves a stocking rate of approximately 220kg N/ha (3.5 heads/ha) or touching the peak of the nitrates derogation.

A stocking rate this high is not typical of a usual beef farm in Ireland.

Based on the farm size, with cattle being slaughtered at under-20-months, the farm stocking rate would be approximately 220kg/N/ha.

Where cattle are slaughtered at over 20-months-of-age, the stocking rate could well be closer to 240-250kg/N/ha.

Could a system with a lower stocking rate ultimately buying less calves and more ground allocated to growing home-produced grain for the cattle on the farm while producing straw for bedding and feed be a more relatable system that would be less exposed to the potential loss of the Nitrates Derogation?

Teagasc’s Nicky Byrne outlined on the day that net profits of almost €1,350/ha are achievable from dairy calf to beef through buying high Commercial Beef Value (CBV) calves.

This figure was also called into question by many farmers on the day, with some farmers saying the profitability figure is closer to that of a dairy farm than a beef farm.

While this level of profitability may or may not be possible for some beef farmers, often high profitability figures in one year can be misleading as additional cattle may have been carried over for slaughter from the previous year, which can distort the profitability figure for that year.

One farmer suggested that a rolling five year average profitability figure would provide a more accurate insight of a farms’ profitability from year-to-year.