Contract rearing: ‘It puts certainty around your bills each month’

Having ventured into the world of contract rearing dairy heifers in recent years, Kieran Henry from Co. Sligo has yet to come across any negatives.

Appearing on the latest episode of FarmLand, Kieran detailed his pathway into contract rearing.

Farming just outside Tubercurry, Kieran – who works as an AI technician with Progressive Genetics – has a daughter and a son with his wife Caroline.

He took over his father-in-law’s farm in 2011 and has spent the intervening years developing a pedigree Limousin herd – Castleoye Limousin.

That has gone from “strength-to-strength” and the autumn-calving herd – which is part of the Beef Data and Genomics Programme (BDGP) – currently comprises of 30 pedigree Limousins.

In terms of the pedigree bulls, he explained that maternal traits are focused. They are then sold on to commercial suckler farmers when they are between 14 and 16 months old.

Heifers are kept on and anything unsuitable for breeding is sold as a commercial animal, he added.

‘A viable source of income’

As Kieran came from a construction background, the farm became more and more important as a viable source of income when the recession hit.

“It’s very slow to grow the suckler numbers, because there’s a huge capital investment involved in trying to buy in stock.

In the meantime, a neighbouring block of land came up for lease – 25ac here beside us. We took that on a long-term lease, so straightaway that created the problem of stocking it.

The pedigree Limousin breeder then joined his local contract rearing discussion group. Having weighed up all the pros and cons, Kieran began to think that contract rearing might suit his farm.

Continuing, he said: “At that stage, I met Joseph Dunphy. He was looking at the possibility of contract rearing out some heifers. We got together; I looked at his facilities, he looked at my facilities and we thought this might be a runner.

“We sat down and looked at how it would work. We used the contract that Teagasc prepares and we adapted it to suit our needs; and after two or three meetings, we had a contract.”

First arrivals

The first batch of heifers – 56 in total – arrived in spring 2017. In May of that year, Kieran started breeding those heifers and they were all sent back in-calf in January 2018 having met all of their targets.

At the end of last March, Kieran took in another batch of 60 heifers. When the lorry comes to take away the current heifers, which will be at the end of this month, they will be replaced with the young heifers, the pedigree breeder explained.

Despite his foray into contract rearing, he doesn’t see himself disposing of his Limousin cattle.

“The sucklers are great and coming from a suckler background; I suppose it’s in the blood. It would be very hard to let go of it and we’ve invested such an amount in the suckler herd.

Most of our animals are five-star animals; we’ve bred with that in mind, so we wouldn’t let that go lightly. The two work very well together. The way we see the contract rearing is it’s just another enterprise.

“It could just as well have been sheep or calf-to-beef; it could have been any other system.

“But it was an ideal system for us in that it allowed us to maximise our stocking rate, maximise potential profits and it allowed us to maximise those without significant capital investment,” he added.

Relationship

Kieran takes great pride and care in meeting the targets set out under the arrangement; the same as he would in his own pedigree enterprise.

The first year you take someone else’s cattle, you’re conscious that they belong to someone else and you’re almost more answerable to them – but you become very focused on getting results.

“At the end of the day, it has to work for both the dairy farmer and the beef farmer. It works for Joseph as he frees up labour; we’re just a contractor. It’s no different than him farming out his slurry or his fertiliser or any other aspect of his enterprise.

“He frees up labour and potentially has the room there to milk more cows with this other group gone off his farm. For us, it’s a cheque each month; it increases stocking rate and it increases profitability.

“We haven’t seen any pitfalls so far,” he explained.

Financial benefits

Commenting on the financial aspect of the relationship, Kieran noted it has given him more security.

The sucklers are great, but you’re down to your two or three paydays a year.

“The contract rearing is a direct debit in the bank each month, so it’s just like getting a wage into the bank. It puts certainty around your bills at the end of each month and it stabilises the farm going forward as a viable enterprise.

“At the end of the day, it doesn’t matter what background you come from – whether it’s sheep, beef, etc – it still has to be viable,” he said.

The income from contract rearing has also allowed Kieran to invest more in his farm, which has led to him reseeding more paddocks. Last year, he also qualified for a grant for a shed on the home farm.

He sees the contract rearing and the suckler enterprise as a way of generating enough income to earn a decent living and keep his farm enterprise moving forward in the future.

‘Not for everyone’

However, he did warn that contract rearing isn’t for everyone. The arrangement centres around having a good relationship with the other farmer and both farmers beings able to work as part of a team.

“You need have a bit of open-mindedness. It takes you away from the old way of thinking that, I suppose, you have to own the stock.

They’re someone else’s stock, but they’re just as important as any other animal that would be on the farm to me.

For anyone looking into contract rearing, Kieran advises to get involved in a local discussion group and to consult Teagasc.

In order to be successful at contract rearing, a farmer must be a good grassland manager and they must be willing to work to meet targets, Kieran concluded.