Dermot Costello was struggling to make a living on his 42-acre farm in Tipperary, raising more than 100 Friesians from calf to weaning.
Stunned by rising input costs, he decided to change the color and type of cattle he raises, and he’s optimistic he’s found a formula to deliver a reasonable return.
Dermot now buys Limousin heifers to resell them to replace suckler herds.
“I was putting a lot of money into it as calves with milk, meals and vet fees etc and I had to wait 12 months to get my money back,” he told farmers during the recent Teagasc open day at the farm.
“I wanted to move to a system where I didn’t have to wait so long for my money and if possible have money coming in throughout the year. — I needed money to continue.
“I went to fatten Limousin and Charolais heifers. Then I was paying a meal bill for the whole year and wanted to move to a system where I could completely eliminate meals and reduce expenses.
“I really wanted a low cost system and reduced fertilizer usage.”
However, Dermot says the margin is tightening again as the cost of virgin heifers skyrockets.
“I had in mind for a while to buy them at a low maintenance weight, pretty close to 500kg, calve them and bring them up to 600kg or 650kg to calve or sell in calfskin”, he mentioned.
“My plan was to do it all year round, so every month I have a few to sell and I buy as replacements. The exception may be the period May-June, because I have fewer customers to this time of year.
“What I buy has become very expensive. When the beef rose it did not suit me at all. I went from buying at around €1200/hd and I’m lucky to be able to get them at €1400/hd.
“So I lowered the weights and reduced my purchases to 450-460 kg.
“Before, I received between €2,100 and €2,200 for them on sale. I don’t get anything more now, but the purchase cost has gone up a lot and the margin has gotten tighter.
“Hopefully the suckler farmer will be in a better position when they buy them, because they get a better price for their weaned calves.
“Generally they stay on the farm for up to 10 months and up to a month longer if I calve them before I sell them.”
Dermot’s farm in Lisquillabeen, Coolbawn, outside Borrisokane, hosted one of the Teagasc series of Spring Beef Grass Walks taking place this month to highlight the benefits of good soil fertility for the production of grass, in order to reduce agricultural costs.
His Teagasc adviser, Michael Daly, explained that Dermot is now concentrating on producing mainly Limousin heifers, full or calved for which he has built up a good clientele.
“There are 60 cross-continental heifers to try out a system that lowers their meal bill and maximizes grass usage on the farm,” Michael said.
“It works for Dermot. This may not work for everyone — it is a moveable feast.
“It is an exceptionally dry farm and the plan is to maximize the use of the grass and make the most of the slurry, which is very good value for money today, given the decline fertilizer prices.
“Artificial fertilizer costs on this farm were around €3,000 last year and this year it would cost around €8,000, so we will rely a lot more on using slurry as needed.”
The balance between park-fed silage and grazing is tightly managed, with every opportunity taken to graze available grass as soon as possible.
Right now there is enough grass on the farm that about a third of the stock is depleted..
Soil temperature on the farm last week was 6.5-7⁰C, and a slight pick-up in grazed pasture was evident as you walked through the fields.
“There was some stock out of stock on January 15, but they had to be put away in early February after the weather change, but some of them have been out again since February 26,” Michael said.
“The two weeks off saved 10-15 bales of silage.”
The Limousin crossbred heifers in foal last week were happy and in good condition.
Dermot has no predefined area of the farm for silage. It would normally come out with a good level of nitrogen in the spring — 40 units in the good old days — and try to grow as much grass as possible during the peak growing season early in the year and remove excess grass in baled silage.
Last year he reached 76 DMD and 14pc pr with very dry silage at 44pc DM.
Fears of winter fodder shortages
Farmers could face a severe shortage of winter fodder this year, warned Alan Dillon, beef specialist at Teagasc.
Thousands of landowners who package silage to sell are at risk of giving up in 2022 due to the prohibitive cost of inputs, exacerbated by the invasion of Ukraine.
“The silage supply may not be there to buy this year,” Mr Dillon said, predicting the price will climb to over €50 per bale.
“Last year it cost €100-120/acre to fertilize the silage using all the chemicals. Now the cost has more or less doubled.
As a result, he said, many farmers who usually silage and sell their surplus would not be doing so this year.
Mr Dillon said slurry is fast becoming the “saving grace” and indicated that there is a possible saving of around €315/ha to be made on P and K requirements.
Despite the cost of its production, he stressed that silage quality “will be more important than ever” because compensating for the loss in quality with concentrates will be a very expensive option.
“A lot of farmers consider using two bags of cut sod and letting it grow for another three weeks to get some volume,” he said. “The problem is that there will be more bulk, but the quality will go down – and the cost of the ration is skyrocketing.
“Traders say there is still 20 to 30 €/t this month and a further increase of 50 €/t in April.
“So the ration that cost €250-270/t will cost you €450/t and head towards €500/t and we don’t know where it will end.
“Even though it will cost a fortune this year, it is more essential than ever to make better quality silage.
“If you feed cattle, the difference could be 4 to 6 kg of feed per day. Over 100 to 120 days, there could be half a ton of ration in the difference in animal consumption between good and bad silage. This could cost upwards of $200 head difference in the cost of finishing an animal.
“So it’s always worth making good silage by spreading fertilizer early, having adequate nutrients and cutting in May.
“Cut in June and July, the volume is up, but there will be a loss in quality.
“Baleed silage could still save you a lot of money this year, even though it will be much more expensive to manufacture than it has been.
“The goal should be to get winter feed as close to grass feeding quality as possible.
“Allowing the cut to continue into June and July, when it is turned into hay, will cost you an absolute fortune at the other end.
“Trying to have good grass for the summer and top quality silage for the winter will be key.”
Dillon recommends applying at least 80 units of N – two bags of protected urea and 3,000 gallons of slurry/ac to start growth.
Manure value has ‘almost doubled’ since last year
The value of slurry has “nearly doubled” as a replacement for chemical fertilizers since last year, according to Teagasc advisers Michel Daly and Neil Lynch. the pair recommend using slurry as much as possible
Mr Daly informed attendees of the Dermot Costello Farm Open Day that every 1,000 gallons of 3.5pcDM slurry is worth the equivalent of £21 worth of chemical fertilizer, while 7pc DM slurry is worth up to at €37 per 1,000 gal.
The objective should be to have 75 pc of slurry spread by the end of April. And it should be applied in cool, damp, overcast, or even foggy conditions for best results.
A 3000 gal/ac application should provide adequate P and K for first-cut silage, with the potential to save $315/ac in fertilizer costs.
Daly recommended prioritizing slurry for silage soil and noted that a 3,000 gal/ac application in the spring using a trailing shoe application has a 50 higher N value. € to a corresponding application in summer using a splash plate spreader.
Mr Lynch urged farmers to “get as much slurry on the land as possible by the end of April to take advantage of previous growth – while P and K do not change depending on the time of year in the stored slurry, the N changes”.
“With N costing a fortune this year, every unit saved is valuable. The value of slurry has almost doubled compared to last year.
“Using more slurry to replace N is something that can be done to reduce the cost of production.”