Sunday, August 14, 2022

Calf rearers dropping their numbers

High beef schedules and store cattle prices are not feeding through into four-day calf values and calf rearing margins, which march to the beat of different drums. Major calf rearers say their businesses are dependent on calf supply numbers in sale yards, input and labour costs, seasonal weather and demand down the track from beef farmers for 100kg weaners.

The numbers of calves being reared are going down, which is counter-productive for the industry, despite good markets for beef and the availability of better beef genetics over dairy cows.

The biggest operators are hanging in, but not expanding, while low margins and uncertain outcomes have decimated the ranks of smaller businesses.

Calf rearer Ian Farrelly, at Pokuru, near Te Awamutu, says this year dairy farmers may cut back on the numbers of calves retained and reared, thereby releasing more into the sale yards and keeping prices down.

Although rearing costs had risen, he was hopeful that margins would turn out like last year.

“Costs of rearing have gone up by $20 a head for milk powder, meal, labour and animal health,” Farrelly said.

“In contrast to last year, demand for autumn-born weaners has been very strong – I could have sold my 2000 of those calves twice over.

“Export beef markets are booming, supply and demand are balanced, China is buying aggressively and those things drive weaner prices a little.”

Farrelly is hoping that healthy demand for weaner bulls in the spring will hold them in the current range of $525-$600 and $475-$500 for heifers, depending on live weights.

His business will do 10,000 calves over the whole year, ideally about half of them contracted, alongside a family dairy farm.

Joanne Leigh of Top Notch Calves in Cambridge says four-day spring calf purchasing had only just begun and calf values had not settled down.

“The season is shaping up to be similar to last year, but I think there is more demand for Friesian bull calves, which is what we mostly rear,” Leigh said.

“That reflects the strong bull beef price schedules for slaughter and the recovery from drought.

“We need to keep the calf purchase prices reasonable and not get carried away with the high schedules.

“These bull calves are two years away from realisation, so the dairy-beef farmers are cautious over what they will pay at the 100kg stage.”

Leigh says costs increase every year and most recently, Top Notch had to factor in another week’s sick leave for staff members.

Calf meal costs have risen and calf milk replacer (CMR) has gone up about $10 a bag because of increased whole milk powder prices.

Top Notch was not going to increase the numbers of calves reared, staying at 7500 annually, 4500 of them being spring-born Friesian bull calves.

Some heifer calves for local dairy farmers were being reared under contract because of staff shortages on farms and a preference to put milk in the vat at the present high prices.

Top Notch has sold about half of its autumn-born weaned calves, including white-faces, at prices similar to last year.

Leigh says she had noticed more demand, making them easier to move in contrast to last year’s drought situation.

Te Awamutu-based rearer of large calf numbers Mark Bocock has contracts with both calf suppliers and weaner buyers.

Costs are rising every year and, for example, this year CMR is up 11%.

Rural suppliers’ websites show 20kg bags of standard Ancalf, Milligans or Ngāhiwi CMRs between $100 and $105, plus GST, compared with $90-$95 last year.

“That alone has put the costs of rearing a calf up $10, although I don’t begrudge the dairy farmers getting more for their milk,” Bocock said.

He says calf rearers who might have done 500 or 600 in the past have shut up shop because there is no money in it.

Bocock pointed to a lack of a common objective along the supply chain.

Beef finishers watching schedule prices rise don’t want to pass the benefit on to R1 cattle farmers, who in turn won’t pay more for weaners.

Hawke’s Bay calf rearer, supplier and livestock agent Carol Milligan says the numbers of four-day calves purchased  off dairy farms for independent rearers had fallen considerably over the past decade.

Rearers she knew were doing one-third or one-quarter of their previous numbers and many had stopped the practice.

The reasons include land-use changes to forestry, Wagyu-cross contracts or lamb finishing and the lack of reliable returns for all the expense and effort of rearing.

She did not think the high price of beef currently was an incentive to rear calves.

“Calf rearers need the security of good margins and contracted prices for 100kg weaners,” Milligan said.

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