Investigating New Marketing Options to Increase Beef Production in Ontario

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1 DAIRY-BEEF PRODUCTION FACT SHEET Investigating New Marketing Options to Increase Beef Production in Ontario The Beef Farmers of Ontario (BFO) has investigated potential feeding strategies with Holstein calves as a way to increase cattle numbers in the province and provide another marketing opportunity for beef farmers. On two separate occasions, BFO has sent representatives abroad to gather information on a successful value chain in the United Kingdom, and has since spent time investigating the cost and profitability prospects in the Ontario context.

2 There are approximately 300,000 dairy cows in Ontario. Enhancing the industry with dairy-beef animals could increase production for beef feedlots by up to 200,000 animals. Opportunity There is a great opportunity to increase beef production in the province by collaborating with the dairy industry. Today, new technologies allow dairy producers to select specific matings for female selection. Only the top third of the dairy cow herd is required to supply replacement females, but typically all cows are bred dairy to ensure that there are enough females to select from to begin milk production. Using an alternative marketing option, dairy farmers could breed the bottom two thirds of their herd to beef bulls and produce bull calves by using sexed semen. Marketing The major processing plants in Ontario recognize an opportunity to expand the beef industry by looking at alternative marketing options. Dairy-beef is a major niche market in the United States. With increased production in Ontario, this product could fit into a regular beef stream, and in time, it has the potential to develop into a branded beef program. Calf Supply Currently, there are many purebred dairy animals that supply beef to the marketplace, either as veal or dairy-beef. With better use of beef genetics, we can improve both the quality and quantity of beef produced. Under this model, calves are sold privately through drovers or at live auction, typically at the first week of age. The general production system flows from a pre-weaning calf program to backgrounding to finishing stages. A calf that is fed right through to finish is preferred over the yearling sourced option, as yield and grade are adversely affected when the nutritional curve is interrupted. Health Protocol Getting calves off to a good start is critical to long-term success. Research shows that meat quality is affected greatly by health challenges of the neonatal calf. Respiratory challenges are very real, and well-ventilated barns for rearing calves, accompanied by strong vaccination strategies and effective colostrum intake will help the calves remain healthy. Vaccinating the cow herd prior to calving for respiratory complications, as well as the calves at birth, and at other appropriate times throughout the calf s life is highly encouraged. Throughout the growth stages, it is also strongly recommended to consult with a veterinarian to establish strong health protocols. Nutrition Nursing Stage: Ensure the calf receives adequate colostrum within the first two hours of birth, and at least six litres in the first day. Feed high quality milk replacer for the first six weeks of life and provide fresh water and calf starter at all times. Gradually wean the calf and increase the intake of calf starter. Growing Stage: Dairy animals require about 8-12% more energy in their ration compared to beef animals. Therefore, a high energy diet with adequate protein is required. High quality forages or silages can be used. Finishing Stage: In order to provide adequate fat and growth, offer a high energy ration at this stage. Optimize use of betaantagonists as per nutritionist recommendations. Target a live weight in the 1,400-1,500 lbs range at under 18 months for an economical carcass. Housing Pre-weaning: While calves can be raised in individual pens, research shows that group housing is best for animal welfare and growth after the first week of life. Again, proper ventilation is critical. Dairy cattle have thinner hides than beef cattle, and therefore need more shelter from mud and wind. A minimum three-sided dry housing unit is critical for optimum animal performance. Risk Management There are several ways to manage risk: Utilizing Ontario s Risk Management Program (RMP) Contracting with processors to provide guaranteed returns Participating in a value chain to maximize returns

3 Sample Budget - Birth to Finish Sample Budget - Phase One: Nursing Stage Calves bought at 100 pounds and sold at 1450 pounds 518 Days on Feed Finished Steer 1450 lb $ 2.00 $ 2, Total $ 2, Calf 1 head $ $ * Death Loss 3 % $ * Milk Replacer 20 kg $ 4.12 $ Starter Mix kg $ 0.69 $ Corn Silage 2055 kg $ 0.03 $ Corn 2919 kg $ 0.19 $ Soy Meal 607 kg $ 0.72 $ Hay 152 kg $ 0.18 $ Premix 76 kg $ 1.25 $ Total $ 1, * Health Program $ * Bedding (straw) 456 kg $ 0.22 $ * Electricity 86.3 kwh $ 0.11 $ 9.67 * Equipment and Repairs $ * Insurance and Taxes $ 1.64 * Marketing and Trucking $ * Miscellaneous $ 5.00 * Interest on Working Capital $ * Total (sum of * variable costs) $ 2, Labour 10 hr $ $ * Building (includes stall barn) $ * Equipment Charge $ * Total (sum of * fixed costs) $ * Total Costs (Total + Total ) over variable costs (Total - Total ) $ Net returns (Total - Total Costs) $ needed to cover variable costs ($/lb) $1.43 needed to cover total costs ($/lb) $1.56 Calves bought at: 100 lbs 175 Days on Feed Calves sold at: 450 lbs 2.0 ADG Backgrounder 450 lb $ 2.30 $1, Total $1, Calf 1 head $ $ Death Loss 2 % $20.70 Milk Replacer 20.5 kg $ 4.12 $84.36 Starter Mix 34.0 kg $ 0.69 $23.56 Corn Silage 0 kg $ 0.03 $0.00 Corn 700 kg $ 0.19 $ Soy Meal kg $ 0.72 $ Hay 0 kg $ 0.18 $0.00 Premix 0 kg $ 1.25 $0.00 Total $ Health Program $18.00 Bedding (straw) 150 kg $ 0.22 $32.99 Electricity 28.4 kwh $ 0.11 $3.18 Miscellaneous $2.00 Interest on Working Capital $13.20 Total $ Total $65.30 Total Costs $ over variable costs $ Net returns $40.47 needed to cover variable costs ($/lb) $2.06 needed to cover total costs ($/lb) $2.21

4 Sample Budget - Phase Two: Growing Stage Calves bought at: 450 lbs 146 Days on Feed Calves sold at: 800 lbs 2.4 ADG Grower Calf 800 lb $ 2.00 $1, Total $1, Starter Calf 1 head $ 1, $1, Death Loss 0.5 % $8.00 Milk Replacer 0 kg $ 4.12 $0.00 Starter Mix 0 kg $ 0.69 $0.00 Corn Silage 1050 kg $ 0.03 $31.50 Corn kg $ 0.19 $99.75 Soy Meal kg $ 0.72 $ Hay 72.9 kg $ 0.18 $13.13 Premix* 29.2 kg $ 1.25 $36.46 Total $ Health Program $10.00 Bedding (straw) 156 kg $ 0.22 $34.36 Electricity 29.6 kwh $ 0.11 $3.32 Miscellaneous $1.50 Interest on Working Capital $19.59 Total $1, Total $65.30 Total Costs $1, over variable costs $ Net returns $ needed to cover variable costs ($/lb) $1.78 needed to cover total costs ($/lb) $1.87 * premix for grower ration is based on 57% DM, 13% CP, 57.6 Mcal/cwt NEg Sample Budget - Phase Three: Finishing Stage Phase 3 Finisher Stage Calves bought at: 800 lbs 197 Days on Feed Calves sold at: 1450 lbs 3.3 ADG Finished Dairy Beef 1450 lb $ 2.00 $2, Total $2, Grower Calf 1 head $ 1, $1, Death Loss 0.5 % $14.50 Milk Replacer 0 kg $ 4.12 $0.00 Starter Mix 0 kg $ 0.69 $0.00 Corn Silage kg $ 0.03 $30.14 Corn kg $ 0.19 $ Soy Meal kg $ 0.72 $ Hay 78.8 kg $ 0.18 $14.18 Premix* 47.3 kg $ 1.25 $59.09 Total $ Health Program $5.85 Bedding (straw) 150 kg $ 0.22 $32.98 Electricity 28.4 kwh $ 0.11 $3.18 Miscellaneous $1.50 Interest on Working Capital $41.80 Total $2, Total $65.30 Total Costs $2, over variable costs $ Net returns $ needed to cover variable costs ($/lb) $1.59 needed to cover total costs ($/lb) $1.63 * premix for finisher ration is based on 70.6% DM, 12.8% CP, 64.2 Mcal/cwt NEg

5 The sample budgets within this document have been created as a general guide for examining the potential development of dairy-beef cattle. This tool provides both estimated values, as well as a location for operation-specific values supplied by a producer. The information contained within the budgets is derived from a collaboration between experts, existing literature, and a variety of sources. The sample budgets are intended to be a general guide, and individual situations are subject to variability. *** This fact sheet was compiled in cooperation with the Ontario Ministry of Agriculture, Food and Rural Affairs. For More Information Dan Ferguson Manager of Producer Relations Beef Farmers of Ontario dan@ontariobeef.com