Target of €50 profit per hour worked at Tipperary Dairy Calf to Beef Demo Farm
Established as a joint initiative between Dawn Meat, Shinagh Estates and Teagasc, the Tipperary Dairy Calf to Beef Demonstration Farm aims to demonstrate the best technologies for profitable and sustainable production of beef calves from the dairy herd.
Dr Padraig French, Head of Livestock Systems at Teagasc, provided visitors to its inaugural open day on July 10 with an overview of the demonstration farm, the system of production and its targets for the years ahead.
Before getting into the performance and financial nuts and bolts of the Tipperary Dairy Calf to Beef Demonstration Farm’s system, Dr French reminded farmers of the intricate links between dairy and beef systems and why greater levels of integration are required.
“The first fundamental of sustainability is profitability,” Dr French explained, “Profitability for a dairy calf to beef unit ultimately means sustainability for a dairy farm. If a dairy farm doesn’t have a profitable outlet to take their calves then they have a serious sustainability problem,” he told the over 1,100 farmers who attended the event.
Dr Padraig French speaking at the Tipperary Dairy Calf to Beef Demonstration Farm Open Day
This is where the Tipperary Dairy Calf to Beef Demonstration Farm – a venture backed by dairy and beef processors – has a role. It aims to demonstrate a profitable system, built on the foundations of spring-born dairy calves, sourced directly from dairy farms integrated with the system from west Cork, with animals finished as in-spec steer and heifer beef at young ages, while having >85% of the diet coming either in the form of grazed grass or silage.
Performance targets
Production year 2024 will be the first year the farm reaches full output, with 335 calves and 320 yearling cattle on 95ha. The initial target is to produce a carcass weight of 275kg (average of steers and heifers) and to increase this over time to >280kg carcasses using appropriate genetics and nutrition.
“We are aiming for an average daily gain of >0.85kg/day and we don’t want achieve that through excess meal feeding. The target here is to maximise production from grazed grass and high quality silage and, with the strategic use of concentrates, finish all cattle to meet factory specifications.
“Approximately 3.5 cattle will be finished per hectare annually, producing 965kg of beef/ha. This level of production will require a pasture growth of 13t DM/ha, utilising 10.5t DM/ha,” Dr French said.
To achieve this level of grass production, the 95ha attributed to the dairy-beef enterprise was reseeded with perennial ryegrass and white clover swards in 2022, and is being managed as grass clover system with moderate (~100kg/ha) levels of chemical nitrogen.
Additionally, the stocking rate on the farm will be determined by the ability of the farm to grow pasture and silage for the animals carried through to finish. The animals will be slaughtered when they reach adequate fat cover and the age at slaughter will determine the feed demand and the number of animals reared will be adjusted based on forage surplus/deficit.
On this, Dr French said: “The amount of grass grown is what will drive the stocking rate here. If the farm grows more grass, we will put more cattle in. We don’t have a predetermined stocking rate and it will be driven by the amount of grass we can grow.”
Projected profitability
The forecast costs for the operation of the farm in 2024 are outlined in Table 1 below. The farm has no BISS payment and has full labour cost, but no land cost is included in the budget. The system initially being operated has a relatively high output but also high input costs, with a relatively modest net margin forecast at approximately 10% of turnover or €423/ha for 2024 at an assumed beef price of €4.70/kg.
Table 1: Tipperary Dairy Calf to Beef Demonstration Farm forecast Profit and Loss for 2024
| € total | €/head | €/kg carcass | |
|---|---|---|---|
| Cattle sales | 412,308 | 1,293 | 4.70 |
| Total sales (includes grain sales) | 424,808 | ||
| Total variable costs | 241,696 | 772 | 2.808 |
| Gross margin | 183,112 | 585 | 2,127 |
| Gross margin/ha | 1,743 | ||
| Total fixed costs | 138,370 | 442 | 1.608 |
| Total costs | 380,066 | 1,214 | 4.416 |
| Net margin | 44,742 | ||
| Net margin/ha | 423 |
Going forward, Dr French said, the focus of the management team over the first five years of the project is to grow the net margin to €1,000/ha.
“Profit per hour worked is a key driver here. Ultimately, where we want to get to is achieve a profit per hour worked of €50/hour. We are projecting a profit per hour this year excluding labour costs of €30/ha, Dr French said.
The strategies to achieve this increase in profitability will include: 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, with the ultimate aim of selling ~1t of in spec beef per hectare.