Kite Consultant, Chris Flint, reviews heifer rearing options.

Businesses that need every available resource dedicated to the milking cows either have to bite the bullet and buy in or take another look at the option of contract heifer rearing.

Contract rearing gives the dairy farmer the option of getting their own heifers reared for a known price whist also insulating them from unpredictable market prices, increased disease risk and variable genetics. This type of arrangement also helps with NVZ rules, unless FYM and slurry can be exported.

Over the years there have been many informal agreements for heifer rearing. The issue with this is that often the results have been informal too, with heifers reared on whatever feed is available and with no set rules or targets on very much in reality.  A formalised contract is an absolute must as without one then how can either party be sure of what to expect from the other?

Even though the concept of one farmer agreeing to rear heifers for another for a set price sounds straight forward, a written contract should be drawn up which states exactly what is required from each party. This should not only include target growth rates, age and weight at bulling, but also cover who is responsible for what e.g. vet work, vaccinations, AI and semen. Liability in the event that something unforeseen happens (e.g. a lightning strike killing animals) should also be agreed. Kite has helped to set up and manage many successful agreements.  They all have one thing in common and that is that both parties have discussed and an agreed a formal contract.

Ultimately though, the choice of whether to rear at home, contract rear or purchase in will be very much down to personal and business objectives. If the home farm has resources that are unsuitable for dairy cows (type of building, poorer ground or land away), then home rearing may be more suitable. Equally, if the farm has resources being used by heifers that could be used by cows to generate higher returns then that should be considered, particularly if there is a desire to increase production that can only be achieved by moving heifers off the farm. Below I have outlined the major pros and cons of the various systems available:

Flying Herd

Positives
• Can buy to maintain / alter desired calving pattern
• No capital tied up in buildings/ facilities for young stock
• No overheads for heifer rearing
• Simplified dairy system provides focus
• Can use beef sires to produce higher value offspring

Negatives
• Disease risk
• Market volatility
• Time and effort required to source heifers
• Less genetic selection
• Loss of independence

Home Reared

Positives
• Reduced disease risk – totally closed herd
• Can complement dairy cows by utilising off-lying grazing
• Full choice of genetic selection
• Potentially, more control of costs

Negatives
• Significant capital tied up in young stock and buildings
• Overhead and staff costs for rearing
• Costs often ‘hidden’ in the business

Contract Reared

Herd owner – Positives
• Can fix the price of heifers
• Know genetic merit
• Better planned breeding
• Can cost accurately

Negatives
• Someone else is managing your stock
• Costs can be more than home rearing
• Disease risk and can be caught by movement restrictions

Contract rearer – Positives
• Cash flow
• Farm always stocked
• Know objectives and what is expected
• Minimal risk as not own stock

Negatives
• Volatility of input prices can eat into margins
• Do not get equity of rising stock prices
• Loss of independence on rearing policy
• Disease risk and can be caught by movement restrictions

With herd numbers declining then there will continue to be ex-dairy farms looking for an alternative income. These farms have resources which are attractive to the expanding dairy business such as land and depreciated buildings, but the key resource is farmers and staff with long experience and expertise in stock rearing. Heifer rearing is critical to the overall profitability of the herd so contract rearing should not be embarked upon without a good deal of thought and a proper contract in place.