Bobby calves have been a hot topic in the dairy industry for a long time with many suggestions being floated. Among these is raising them naturally on pasture for prime beef. It’s this topic that farmer Trudy Bensted’s recent Kellogg report focused on. Specifically, the concept of beef forward marketing.

Beef forward marketing would involve marrying together the dairy and beef industries to form a partnership that benefits everyone in the production chain.

Dairy farmers sell their bobby calves at a margin to a calf rearer at 10 days old. The calf rearer then sells on to a beef finisher at an agreed marginal price, at an agreed weight. At finishing every shareholder would receive a percentage of the profits. Everyone shares the risk and gains to continuously improve, creating a quality product through collaborative planning.

With global demand increasing and farmers struggling to source good quality calves, that will finish with a profitable value, Bensted says the concept could be the answer.

“It’s not a silver bullet fix and it’s about trying to find a system that’s going to be compatible for each farm.”

From her research, Bensted says that beef farmers say they are suffering the consequences of dairy farmers dictating the genetics for the beef industry due to their focus on cost-effective systems and the need for easy calving animals. While dairy farmers say on-selling beef dairy crosses is hard work with low profit due to their focus on milk production decreasing the yielding in beef carcasses.

“Forward marketing agreements are about developing long-term security for dairy farmers, calf rears, and beef finishers to be complementing each other’s business and smooth out that volatility and risk.”

Some common issues facing farmers when it came to their business were: sourcing of low birthweight calves, easy calving bulls that aren’t too pricey, sexed semen being expensive with unconvincing conception rates and reproduction issues in general meaning the requirement for replacement heifers is still very much there.

“That’s where my forward marketing beef agreement comes in, it’s implementing that two heads are better than one.”

By having experienced dairy and beef farmers working together to create a higher genetic merit calf, quality will be driven and bobby numbers decreased. Dual-purpose breeds could also be an option for farmers to introduce genetics that benefit both dairy and beef.

On paper, beef forward marketing contracts between dairy farmers, calf rearer, and beef finishers have substantial merit and while forging relationships between the various parties and hashing out individual agreements would require some work, the question remains – where will these animals go?

Since 1990 dairy farming has taken up almost one million hectares of sheep and beef finishing country and many have been encouraged over to dairying swayed by more competitive returns. In recent years sheep and beef farmers are being elbowed out of the high country by increased forestry further limiting profitable finishing land.

In an article written by farm consultant Bob Thomson for Country-Wide Beef 2018, he highlights the issue of space needed to grow bobbies for prime beef, the need for a premium that translates to a significant change in profit per hectare and a reward for quality assurance.

“Dairy farmers on marginal land are likely to consider returning to beef finishing with a schedule payment of $7/kg. A change in land use will reduce their environmental footprint with fewer dairy cows, which will also mean fewer bobby calves. If the NZ dairy herd fell by 700,000 there would be enough land available to raise all the surplus bobby calves as prime beef,” Thomson wrote.

‘New generation beef’ could be part of the answer to the issue, Bensted says. The concept developed and researched by Massey University provides a new avenue to utilise lightweight, yearling steers of dairy origin. Cattle are culled between 10 and 12 months of age producing small, more tender cuts of beef.

“Beef farmers seem to be quite excited about new generation beef, they don’t have to carry animals over an extra winter. In saying this, I think a lot of work would need to be done to promote the end product to drive demand and increase the value of that product.”

Along with renewed and focused marketing efforts, NZ’s grading system and processing plants would need an upgrade to make something like new generation beef an option, Bensted says.

“Upgrades within NZ’s processing with more automation will extract more value and offer more feedback and confidence for the producers and information that can further drive their productivity.”

Although bobby calves might be a dairy industry issue, its beef farmers who have the potential solution. A large percentage of finished beef already comes from dairy origins. Going down the route of beef forward marketing would need some solid leadership and relationship building between industries and individuals as well as a means by which to connect farmers to forge suitable partnerships.

“I think relationships are one of the biggest issues. There is little trust between dairy and beef farmers but I see an opportunity for dairy to start taking on leadership and to bring the beef industry into a partnership that drives profits and exports higher while creating more quality in the end product.”

There could be potential for beef forward marketing to provide security during uncertain times such as we are experiencing now with Covid-19, however, this would rely on solid relationships right through the production chain and well thought out contracts with suitable contingency plans in place. Bensted says she’s hopeful that beef forward marketing can be a way of the future for some farm businesses and has the potential to link in others in the production line like restaurants.

Bensted along with Massey University Rebecca Hickson has created a Facebook group ‘Dairy Beef Collective NZ’. It has been created as a support platform for NZ farmers wanting more advice and support around genetics to connect dairy farmers, calf rearers, and finishers.