Changes to the subsidy system made Andrew Robinson seriously consider the future of his 50 cow suckler herd. By analysing his costings he saw suckler cows would not make a profit margin without a headage payment and that costs needed to be reduced. One area where Mr Robinson saw an opportunity was in reducing his replacement costs.

New House Farm is situated in the upper Tees valley, County Durham. With no employed full-time labour except part-time help at busy times, Mr Robinson farms 1,200ha (2,960 acres) with 1,200 Swaledale ewes and 50 mainly Limousin cross cows. The enterprise had been built from scratch about 19 years ago, when he succeeded in getting the tenancy of the farm. Since then he has taken over another tenancy and the farm now consists of mostly moor and rough grazing rising from 335m to over 600m.

The various costs of the business tend to be below average except for machinery and contract costs, due partly to some duplication of machines on the two holdings and partly due to the low labour input. Because Mr Robinson works the farm on his own, labour for key times of the year is needed to be bought in.

In the past, replacements were partly bought in and partly home-bred. Heifer replacements would be bought with calves at foot costing up to £1,000 for each unit. Mr Robinson decided on a change in policy and started buying bulling heifers at 18-months-old at £450-£500 a heifer. They would be purchased towards the end of May and then be put to the bull in July.

Due to the lack of resources on the farm, heifers would be away wintered from the middle of November to the beginning of May, costing £160 a heifer. The heifer would then calve down in May.

Of the 12 original bulling heifers bought in, four would be sold with calves at foot for about £1,000 each. The margin in those heifers then helps to pay for the cost of rearing the replacements.

A change in culling policy is also seen as key to reducing replacement costs. In previous years, cows would be kept on as long as possible before entering the over-30-month scheme (OTMS).

With the return of cows back into the food chain, Mr Robinson is keen to take advantage of the opportunity by culling cows earlier by finishing them for the food chain. About £600 a cow was received for cull cows this season compared to £200-£250 achieved under the OTMS. With the current number of suckler cows, Mr Robinson culls eight cows of which two of these this year were eligible for the food chain.

Some cows are still being culled under the Older Cattle Disposal Scheme, but more cull cows in future will have been born post August 1996 and so will be eligible for the food chain. The difference in value of OCDS cows sold compared to food chain cows goes some way to helping reduce future replacement costs.

Compared to 2004 the replacement cost for 2005 across the whole herd was almost half, at £38 a cow. As more cows become eligible to enter the food chain this cost would further reduce.

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