Replacement Planning

Replacement planning

The cost of rearing dairy heifers in British dairy herds is generally accepted to be an area of herd management that is largely ignored and poorly understood. There may be significant room for improvement in many herds to introduce tighter control of rearing costs for improved efficiency.

DairyCo studies have indicated that the average cost of herd replacement on UK dairy farms is currently around 2.6ppl. It should be possible for most farm businesses to introduce strategies to reduce this cost by a significant amount, while still finding the means to produce well-grown heifers that are able to calve at 2 years of age and 90% of mature body weight for a maximum return on their investment.

Further information on the costs of home-reared heifers, and also on the important links between heifer replacement rates and culling rates can be found in the DairyCo Managing herd replacement - rates and costs

Alternatives to home-reared replacements

As an alternative to producing and/or rearing his own heifers, a farmer may:

  • Buy-in heifers as part of a 'flying-herd' policy.
  • Contract-out the rearing of his heifers.
  • Lease-in cows via a 'cow hire' agreement.

The flying herd

A 'flying herd' policy involves the farmer producing none of his own replacements, often where a beef breed bull only is used on his cows, and having to purchase heifers (or cows) as replacements for the cows culled from his herd. While this method frees the farmer from any dairy heifer rearing costs, principally those involved with housing, feeding and getting heifers in-calf, it means that he is exposed to the market value of purchasing-in replacements, and also to any biosecurity risks from buying in from other dairy units or via auction markets.

Contract rearing

This option may be attractive to farmers who lack the necessary resources on their own units, such as labour, time or buildings, to rear the productive, well-grown heifers they require. Heifer rearing contracts usually apply to heifers delivered to a contract rearer between 2 to 6 months of age, and being returned to the farmer at between 4 and 6 weeks prior to calving. Like the flying herd, this method of rearing replacements can expose the herd to biosecurity risks, albeit to a lesser extent.

Several different types on contract are used:

  • A per animal per day contract, where a flat rate fee per animal per day based on the actual rearing costs is paid by the farmer.
  • A per kilogram of weight gain contract, based on a simple delivery weight to the rearer and return weight to the farmer so growth rate per day is calculated. The potential flaw in this system is that care is required not to produce over-fat heifers.
  • A sell and buy-back contract, the farmer selling the calves to the rearer with the principal right to purchase back the same heifers at 4 to 6 weeks before calving. This gives the contract rearer full control of the rearing system, but he suffers all losses associated with the rearing period.
  • A full contract, with the farmer setting the rearing policy, covering the cost of any deaths and providing feed, semen and medicines while the rearer provides the labour and facilities.

It is imperative that contracts define each party's responsibilities, and that the rearer is insured for any third-party claims involving the contract-reared heifers.

 

Cow hire

A 'cow hire' agreement allows the owner of dairy cattle to hire those cattle out to another dairy farmer. Ownership of the progeny from the hired cows remains with the farmer hiring them in (the lessee), but the contract may stipulate that the owner has the right to purchase any of the progeny.

Other terms in the contract are likely to define who is permitted to care for the livestock, the requirements of the lessee to insure them, the need to keep them in good condition and to allow the owner to inspect them at any time, and will also define situations where the contract may be terminated.

The contract may also stipulate that no other livestock be permitted to be kept on the farm, except the lessee's own livestock, and that the lessee is responsible for maintaining movement and other legally-required records of the hired-in cattle.

The contract will stipulate that, should any of the cows die or become unproductive, the owner will replace them, unless there are lost through negligence of the lessee, or through any other stipulation within the contract whereby the lessee becomes responsible for replacement.