Wairarapa dairy farmer Hamish Hammond has a piece on the side with beef.
I have heard that the majority of beef cattle reared and killed in New Zealand today have a dairy origin. We are contributors to this statistic by running a small, leased beef farm alongside our role as contract milkers on the family farm. Is this a profitable addition to our dairy business?
This is yet to be determined so I thought I’d review how we run the operation and go over a snapshot of the 2020 financials.
The beef farm is 61 hectares with medium-heavy soils that hangs on to moisture well into Wairarapa summers. The heavy soils can be challenging during winter and early spring so we limit the stocking rate over this period. This property is separated from the dairy by a country road and water is supplied from the dairy, this is a major bonus as we don’t like wasting time either driving too far afield or fixing a dodgy water supply.
My advice for any dairy-come-beef farmers, is to do your budget and due diligence before
starting. Farm conservatively and build from there and if you get into trouble, you can
always sell store.
We predominantly finish beef cross cattle that are bought from the dairy operation as 4/7-day-old feeder calves.
We have dabbled with selling store one-year-old cattle in October-November and do like the potential returns this trade can provide.
Balage is harvested in spring and fed this out in late summer-autumn and winter. We renew about 10%of the farm’s pasture each year. This is done by planting a summer brassica and then returning it to new pasture in the autumn. In terms of workload, we figure this side of our overall business takes up about an hour a day, each day of the year.
Some days we do nothing, on other days we may be drenching or feeding out for a few hours. We can spare the extra hour being a once-a-day milking farm but most likely wouldn’t have spare time if we were twice-a-day, with just three full-time staff.
Now the 2020 numbers:
- Revenue: $126k
- Farm working (including rent but not labour): $104k •
- Profit: $22k
- Minus a deduction for our time: $9k (365 days *1hour*$25/ hour)
- Operating surplus: $13k
We knew from the beginning that this enterprise would not be making us millions. We had budgeted on earning an additional profit of $20K. It didn’t quite make that amount in 2020, but the beef schedule wasn’t flash and we were still working out how to operate the farm.
We are however happy with our weaner rearing costs of $220/head (including the calf) and how the property worked alongside the dairy farm.
The biggest lesson learnt is that beef farmers need to focus on the market more than their dairy counterparts, and one week can make a huge difference in the schedule price.
My advice for any dairy-come-beef farmers, is to do your budget and due diligence before starting. Farm conservatively and build from there and if you get into trouble, you can always sell store.
Talk to stock agents, meat buyers and read the farming news to keep a pulse on the markets.
Lastly, make sure you factor in, and cater for, the additional time and money beef farming requires to rear quality animals, don’t under budget on these. In this regard, as dairy farmers first and foremost the last thing we need is extra stress during calving, so don’t get too distracted by the beef! Cheers.
