Beef-on-dairy cattle in a feedlot in Colorado. The curiosity of the beef-on-dairy cattle is noticeable with all of them being in contact with humans every day from when they are born.

THE beef industry has been invited to double-down on dairy beef with a national program to place all viable non-replacement dairy calves into Australia’s red meat supply chain.

Dairy Australia, the industry equivalent of MLA, is seeking beef industry input into the project called Calfways – a contraction of Calf Pathways.

Dr Andy Hancock, Dairy Australia’s Sustainable Animal Care Manager

The project was developed over the past 18 months and launched on Thursday at the Australian Dairy Conference at the Gold Coast attended by 650 people.

The project originates from a dairy industry policy to ensure all calves enter a valued market chain by 2035, with no on-farm euthanasia of viable calves.

Leading the project is veterinarian Dr Andy Hancock, Dairy Australia’s Sustainable Animal Care Manager.

“To achieve the industry objectives, the project is aiming to input 300,000 to 400,000 extra animals per year into the beef supply chain. But if you look at the number of animals that are processed each year in the beef supply chain its only about a 7% increase and we’d be looking to do that over 10 years.”

He noted an inverse correlation between calf supply and market prices. “When beef prices are good, people hang onto their calves and when the beef prices are bad, more calves go into bobby calf processing.”

He said Dairy Australia was hoping to partner with red meat industry agents. “We’re dairy. We can talk about the benefits to beef farmers but we don’t know the industry as intimately as MLA or the beef supply chain participants. This is why it’s really important to partner with them.

“We’re in close discussion with MLA and hoping to partner with them and also bring in other supply chain participants – I think that’s a really good start. The hard part will be making sure that everyone is working together towards the same goal, possibly with lots of different commercial objectives,” he said. “But I think there’s a lot of momentum in this space, a lot of goodwill.

“The difficult part of it currently for a dairy farmer or a calf rearer or finisher – any intermediary along the dairy beef supply chain – is to have the confidence to invest in infrastructure, whether it’s additional calving facilities, additional land or labour, given that the beef market is so volatile. An investment made today might be a loss in two years’ time and that’s always been the hardest nut to crack.

“And so, what the road map would hope to achieve – and what these industry partnerships would hope to develop – are market mechanisms that help to decouple the relationship between calf supply and beef price.”

So, how could beef farmers benefit? Dr Hancock continued: “In those structured programs with specific genetics, the right genetics, dairy farmers can provide beef farmers with a source of calves that are going to grow well and meet specifications at slaughter.”

He said the development work had not established a dairy beef ‘hot spot’. “Every region has different pressures and challenges. For example, Tasmania is a highly seasonal dairy area with a scarcity of land, and so, for dairy farmers to rear their calves it is quite expensive to invest in infrastructure, land and labour. That’s different to Queensland or WA where there’s year-round calving systems and they have more capacity to rear their own calves to a certain age. Every region is going to need its own solution,” he said.

“One big benefit for the retailers, beef farmers and the beef processors is that the scope three emissions from beef from dairy are significantly less due to the embedded energy intensity fact that in carbon accounting methodology a portion of the lifetime emissions from the animal can be attributed to its dam’s milk production. (UK supermarket giant) Sainsbury’s is branding its vertically integrated dairy beef as 25%-lower carbon.”

The Sainsbury’s program, which has been running for more than 10 years sees UK dairy farmers supplying seven-day-old Angus-cross calves at an agreed price, currently between £200 and £250 pounds per calf.

The calves then go onto a dedicated calf rearer who also gets an agreed price provided they meet specifications before the animal goes onto a finishing unit, the processor and the supermarket shelf.

Dr Hancock said: “So the volatility risk is managed by the supermarket, which have the mechanisms to do so. And it’s a really successful program for them, they’ve currently got 90,000 calves per year going into this program with only 15,000 calves coming from their own dairy suppliers, so they are getting another 75,000 a year from other dairy farms. So it’s a really popular program.”

Timing is right

Fulton Marketing Group strategic sourcing manager Andrew Ralph told the conference the timing was right to bring dairy genetics into Australia’s red meat supply chain.

“We’ve taken a look at what’s happening in North America. Sexed semen has changed the game and brought a lot of awareness to the possibilities of beef on dairy.”

He is overseeing a pilot project in northern Victoria and Tasmania measuring the carcase performance of high-end dairy beef animals (click here to view earlier Beef Central report.)  The 1060-head trial of Angus cattle compared results across four feed regimens ranging from full pasture to full grain-fed.

Early results are showing an average ADG of 1.3kg to 1.9kg across 90 days on feed, with one animal recording 2.2kg/ADG.

“A majority hit market specs and, in some cases, exceeded the specs, especially in in the marbling – and particularly in the grain-fed group,” he said. “One cohort scored an average marbling score of five with some animals making eight and nine.”

Genetic gain is bringing in sires with proven performance. “It’s all about selection,” Mr Ralph said. “In North America, sires that were in the top 10pc for desirable Angus over Holstein performance might now be in the top 30pc and that rate of genetic gain has improved the quality of the calves.”

He said US meatpackers drove the change by refusing to accept leggy, low-yield dairy-type bodies. Feedlots and calf-rearing enterprises upped their genetics game and, over the past three to five years have boosted US gradings into prime, high-choice and choice, along with improvements in yield.

The US beef on dairy herd currently numbers 3.5 million head – a figure Andrew believes will reach five million. Concurrently, he expects dairy beef yields to outperform ‘native’ (pure-bred) animals within five years.

The Australian experience will be different, he suggested. “We have very different production systems and different conditions and the market you’re targeting will be different.”

Overall, however, there are three must-do’s to dairy beef rearing, he said:

• You have to know which market you’re shooting for
• The absolute key is genetics
• Colostrum and adequate early nutrition.

“In the US at the moment they are paying $800/head for day-old calves. Calf-rearers are paying a premium for proven passive immunity transfer tested animals. If animals fail the test, they won’t take them, or demand a severe discount.”

Wagyu and Angus genetics are the go-to for Australian beef producers, Andrew said. “It’s quality you’re after to hit the premium market, either highly marbled for export and MSA eating quality index score 63+ for domestic.”

Existing meat processor grids will be able to handle the animals, he said. “And the early adopters will lead the way.”

Early adopters

An early adopter in dairy beef production is the Gardiner family of dairy farmers from northern Victoria.

Ann Gardiner and her family milk 1000 Holsteins in northern Victoria.  They AI their best milkers with dairy sexed-semen and the balance with Angus and Wagyu straws. With two calving drops a year, they produce 750 calves.

They feed the Angus calves to between 250 and 300kg before sale to a NSW border feedlot. The Wagyu are sold at seven days under a yearly negotiated contract to a calf-rearer.

Ann Gardiner

Ms Gardiner said: “We don’t have enough rearing facilities or land to rear that number of animals plus the labour. Labour alone makes my mind boggle.”

Ten years ago, the family chose to take look at their calf management. “The reason we started looking at it was the animal welfare issue of selling four-day-old calves, and it certainly wasn’t part of the business that we really liked,” she said.

“We were trying to start to build a process for managing that part of our business. We got started rearing-on some of the Wagyu, plus we reared Friesian steers.

“Our problem with the Friesian steers was that it costs just as much to rear them and the market at the endpoint was an unknown.

“There’s a lot of research saying that if you feed them and look after them and manage them – they’ve got a good, high marbling score and you get a really good product at the end. But out biggest issue was that we could spend 12 months rearing them and the market collapses and we’ve done our dough; all the risk is sitting on us.

“We had some Friesian steers that, when the EYCI collapsed, they were worth less than is we’d sold them at a couple of weeks old. So we actually found a really valuable use for them around the farm, getting in and cleaning up paddocks, to prepare them for selling.

“And then, last year, when the EYCI picked up we were actually – for once in our lives – in the right place at the right time with these 15-month steers. But it was an opportunistic type of thing and we decided it was too much risk. Our primary goal is to be dairy farmers – we’ve got to keep our eyes on that prize.”

All the steers are treated exactly like the replacement heifers. They all get stomach-tubed for colostrum at birth and they get milk fed like the heifers and when they go adlib grain and pasture.

The Angus sires are selected by Joseph Holloway of Semex to produce an animal suitable for beef production.

Ms Gardiner said: “We grow a really good, well-grown animals and the feedlot gets an animal that is consistent.

“We have an arrangement where the base cost covers our costs to get the calves to six months and, if the EYCI goes up, we share a proportion of that rise. We pay for the straws and the cartage.”

What about temperament? “No problem, although I suppose everyone hates rearing Wagyu – but the money is there. And we found that its better to rear them in their own breed groups.  We find they do better in breed clusters of 10 calves.

“We feel the need to show our animal welfare credentials. There’s a money pathway and a moral pathway and the moral pathway drives us more than anything.

So, what’s in it for the beef producer? “I think for the beef producers it’s a steady stream of animals that they can rely on every year.

“We think it’s important to have trusted relationships along the chain. We all do a good job which leads to a great and consistent product and we all need a slice of the pie to, at minimum, cover our costs and at best generate profits,” she said.

Kevin Jones

Waiting list for Angus x dairy calves

Another Victorian, Kevin Jones, has a waiting list for his Angus-cross calves among local beef producers. He milks 900 cows near Foster in South Gippsland, calving three times a year for a continuous supply of calves.

Now, 18 months into the business and after two calving drops, he is bringing some Wagyu genetics into the breeding program which delivers about 200 calves yearly.

“Now we never have any problem getting rid of bobby calves any more,” he said.