Low capital outlay, a quick turnaround and guaranteed end price means 23-year-old Jim Winzer should be able to quickly build capital and potentially expand his new calf rearing business.
All too often the long delay in receiving that first pay cheque can be a limiting factor for those starting out in the industry. However, with just a seven-month turnaround on veal calves and several contracts secured, Mr Winzer is ensured a steady income stream from his new enterprise.
The decision to move into calf rearing came about two years ago in preparation for taking on 40ha in a farm business tenancy from his parents. Mr Winzer started by seeking advice from Lachlan Maclachlan from Mole Valley Farmers’ Red Meat Team, who identified a potential business opportunity through Tarrant Valley Livestock.
“Lachie gave me the idea of veal calves as I had always had an interest in rearing calves and I had some existing cattle sheds. The seven-month turnaround was also very attractive and it didn’t require any fancy buildings or big investment,” explains Mr Winzer.
Veal not only suited the set-up, but also complemented the existing sheep flock of 400 North Country Mules, which only needed the sheds for a short period. However, one of the biggest attractions was the availability of a 12-month contract with Tarrant Valley Livestock, which produces dairy-bred veal under the Brookfield Farm brand for multiple retailers and food service suppliers.
As part of the arrangement, an agreed end price for each batch of calves would be set at the start of the rearing period.
“Because I know the price I’m going to get, I’ve got the certainty there, which could help me expand. It is good for young people starting out and it gives assurance you are going to make money,” says Mr Winzer.
Mr Winzer is contracted to supply Tarrant Valley Livestock with 15 calves/month, with the flexibility to send more should they require. Two-week-old calves are sourced from two local dairy farms and a calf buyer and taken through to an average of seven-and-a-half months.
The key is to provide an even supply to Tarrant Valley, with calves hitting 300kg at before they reach eight months. Being younger than eight months is critical, as the business won’t take them over this age. At the time of writing, Mr Winzer was receiving £3.30/kg plus a 5p/kg bonus for hitting supply targets. Calves are not graded.
Mr Maclachlan says this type of contract provides the opportunity to forward plan and carefully monitor costs and profits.
“Jim gets a set price for each batch and he knows his rearing costs, which are about £115 a calf including feed, vet, medication and bedding. The main variable is the calf cost at purchase,” he says.
Mr Maclachlan says it can be easy to wipe out profits on this kind of system, so ensuring efficiencies and costs are maintained is crucial.
“Calf rearing is not for the faint-hearted. If you don’t ensure you’re doing a good job mortality starts to climb and profitability starts to disappear. Jim pays great attention to detail,” he says.
Mr Winzer sees providing the correct ration and environment and minimising health issues as crucial in ensuring targets are met.
“You need to treat calves like babies all the time and ensure consistency in quantity, quality and timing of milk feeding. I make sure I feed at 7.30am and 5pm every day,” he says.
Calves are fed 2 litres of milk twice a day at 150g milk replacer/litre until six weeks of age. They then move to once-a-day milk feeding until weaning at eight weeks old, when they are consuming 1kg of concentrate a head. Calves receive ad-lib concentrate and barley straw out of feeders throughout.
Mr Maclachlan believes providing clean, fresh straw rather than hay helps speed the development of the rumen papillae and stabilises the rumen to boost concentrate intakes.
To maximise margins and the calf’s naturally good feed conversion rates at this age, Mr Winzer also thinks providing quality feed is vital.
“It’s important to get good feed into them, as you don’t get the output on cheap feed. And because it is a short period, you need to maximise performance,” he says.
Calves receive a 17% calf nut until they are 12 weeks old, with the emphasis placed on good levels of undegradable dietary protein (UDP) such as soya and distillers’ grains to help speed calf development.
After 12 weeks they move on to a 14% maize- and barley-based finishing nut.
Mr Maclachlan explains: “Maize is much more economical to feed now and it is kinder on the rumen, reducing acidosis and so improving weight gains. There is also yeast in the ration to improve fibre digestion, which leads to better appetite and daily liveweight gains.”
At present, Mr Winzer is unable to weigh stock, but he is keen to introduce weighing in the future to further track performance and improve efficiencies. To achieve target weights before they reach eight months, calves need to achieve 1.2kg/day and hit 120kg at 12 weeks old. Working on a 55kg start weight at two weeks old and average weights when calves leave the farm, calves are actually achieving 1.4kg/day.
Such is the success of the Tarrant Valley Livestock contract that Mr Winzer has developed a similar fixed-price arrangement with a local beef finisher, with calves sourced and reared in the same way.
“Some people don’t have the time to rear calves on milk or don’t enjoy it and would rather buy an already reared calf, so I think this is another area young people could get into,” says Mr Winzer.
He also has a handful of continental-cross calves that he rears for any additional viable markets. All in all he sells about 30-35 calves a month.
By having different contracts, along with the sheep, Mr Winzer says he is spreading risk and creating flexibility. This means if Tarrant Valley doesn’t need any extra calves, he could sell them on his other contract. He also has the potential to sell them as stores by making the most of an additional five-year farm business tenancy he has on off-lying ground.
Mr Maclachlan says he hopes these set-price contracts will become commonplace throughout the red meat sector in the future.
“Hopefully this kind of integrated supply chain will become a template for the industry. Such security will help the long terms sustainability of the sector,” he says.