Cash flow is king
Cash flow budgeting is going to be critical for dairy farmers in the coming season.
With this in mind a farm consultant is urging dairy farmers to focus on value, not cost, when it comes to choosing beef bulls.
AgFirst Consultant and beef specialist Bob Thomson says most dairy farmers mate early calving cows to high BW AI dairy bulls, breeding the remainder of the herd to service bulls or beef AI.
“When it comes to mating the balance of the herd it’s possible to claw back much of the cost of mating by selecting proven beef bulls which are easy calving and short gestation.
“We need to challenge traditional cost thinking – selecting proven beef bulls (easy calving and short gestation) could mean up to four-five extra days in milk and generate a dairy-beef calf which is worth more. It’s a win-win-win – safe calving, more days in milk and a calf in demand by the beef industry.
“Whether you choose AI or service bulls is up to you, but breeding values should be part of the decision. I encourage farmers to explore the differences between the estimated breeding values (EBV’s) of the bulls on the hoof and AI. There can be big differences. And buying bulls with no records is a pig in a poke so can be very risky.
“As dairy farmers you can choose to take some of the risk out of your business by selecting beef bulls which will generate income in three streams – easier calving, more days in milk and a high-value dairy-beef calf.
“Genetics companies and beef breeders have those bulls but you have to do your homework.”
Thomson says the beef industry relies heavily on the dairy industry for beef finishing cattle and there needs to be more collaboration across the industries.
“The dairy industry has grown at the expense of beef. In the last 10 years the number of dairy cattle has grown by 31% (from 5.15m in 2004 to 6.7m in 2014). Over the same period there was an 18% drop in the number of beef cattle. There are now five million dairy cows but only 1 million beef cows.
“There are currently 660,000 finishing cattle of beef origin on farms, 420,000 of dairy-beef finishing type and 420,000 which are dairy-beef bulls – that’s 840,000 of dairy origin.
“Beef + Lamb New Zealand Genetics is very aware of the need for greater clarity on the breeding values of beef sires for both dairy farmers and beef farmers and is investing in a dairy-beef programme which is testing and comparing established and young beef sires to promote greater awareness of the attributes needed by the dairy and beef industries.
“Insights and learnings from this programme will gradually filter to the dairy and beef industries, but in the meantime the national beef herd statistics are unlikely to change and the dairy industry will continue to be a significant source for this country’s beef finishing animals.
“Calf rearers, beef finishers, meat processors and exporters are looking to the dairy industry for animals with genetic merit for growth and carcase attributes. Discovering beef bulls that meet the needs of the dairy farmer and the beef farmer is an opportunity for the industry as a whole. But it all starts with the dairy farmer’s choice of beef semen, whether delivered on the hoof or in a straw.
“And while it’s fully appreciated that things are tough on the dairy farm right now, the value of dairy-friendly beef genetics still outweighs the cost.”
Defer-a-bull scheme
A scheme which enables dairy farmers to buy and use proven beef service bulls, deferring payment until the bulls are sold, is finding favour with dairy farmers as bull sales begin around the country.
PGG Wrightson national genetics manager Bruce Orr reinforced the clear advantage and potential extra profit the BLNZ dairy integration programme has highlighted for dairy farmers using proven beef genetics over the balance of the herd (after replacements).
“But I am concerned that a majority of service bulls arrive on farm with no records, ie no indication of the traits needed by dairy farmers – calving ease, short gestation and days to calve. It’s a risk dairy farmers can avoid by ensuring any bulls on the farm have economic breeding values (EBVs) and come from a registered breeder.
“Locating those good bulls is easy: dairy service bull sales begin around NZ at the end of August and the majority of those beef bulls have EBVs.”
Orr says there are advantages in dairy farmers buying rather than leasing their service bulls.
“If you lease a bull you are not in control of what is sent to you; nine out of ten are not registered and you will be paying $450-$800 to use and then return the bull after mating.
“However, if you buy a proven bull from one of our sales, through our defer-a-bull agreement, for say $2000, you will only pay interest on that bull at 1% per month for the time you use it. At the end of mating the bull is usually sold. In comparison to the cost of leasing it will probably cost a few hundred dollars for a proven beef bull.
“It’s a win-win whatever way you look at it. The bull has the traits you need so it will sire calves worth more than straight dairy calves, and overall it will cost you less than a leased animal.”
Orr says a full list of dairy service bull sales is available on the PGG Wrightson Genetics website.
