MOVES are underway to add value to bobby calves in northern NSW and tap into overseas beef markets in the hope of ending what has been a significant added cost and management pressure on dairy farms in recent years.
However, it won't be an easy path with milk producers likely to be growing calves at a loss in the short term to facilitate the development of new markets.
Casino's producer-owned beef processor, the Northern Co-operative Meat Company (NCMC), has been offering forward contracts for calves with dairy breed content with carcase weights of 80 kilograms in order to conduct trials.
That would mean farmers would need to grow their cull calves for six to nine months.
The region's bobby calf market collapsed close to two years ago on the back of depressed veal prices and a decision by the NCMC to stop taking stock under 50 kilograms carcase weight.
Saleyard prices for 20kg to 30kg calves dropped to $15 a head.
With most calf rearing specialists in the region shutting up shop due to the lack of profitability, dairy farmers faced hefty costs of setting up rearing facilities to supply a market likely to return very little.
Some have transported to Queens-land for processing but most have opted to dispose of culls.
NCMC chief executive officer Simon Stahl, speaking at a Beef Producers Field Day at Greenridge recently, said it simply wasn't a profitable option to process small calves at the Casino facility.
"Our veal floor production system is built for an average carcase weight of 100kg to 120kg," he said.
Processing of bobby calves had been happening at a loss as a service to the region's dairy industry, he said.
"In light of increasing animal welfare implications, which has our customers concerned, it was no longer an option for us," Mr Stahl said.
However, the NCMC was interested in investigating the potential of new markets, particularly in the US, if farmers could grow to weights that were feasible to process at the Casino facility.
"We would need to assess the attributes of the veal but we would love to have a niche product we can market long term," Mr Stahl said.
"We're encouraged by the calls we've taken from dairy farmers already playing with the concept and growing their bobby calves to about 120kg (who are seeking) an incentive to take them further.
"Our aim is to create interest, underpin it with a guaranteed return and see if people can finish the product to what is needed."
It was likely intensive feeding would be the way, he said.
Dairy industry leaders in the region say few producers would be in a position to carry the sort of costs involved, even for a trial phase.
Dairy Connect NSW's North Coast farmer representative Paul Weir said the contract offer equated to $320 a head and to get a calf to the required weight, the costs - at current grain price rates - would be at least $330.
"That's not taking into account any up-front costs in setting up the facilities required, or any losses, and assuming no initial value on the calf," he said.
"Realistically, you'd be looking at a loss of $40 to $50 per head."
Far North Coast Dairy Industry Group chairman Ken Bryant said farmers would be willing to provide the calves free to a separate rearing businesses but at that price, it was not a viable enterprise.
There would be little grass input and that was where the money was to be made, he said.
Few dairy farmers would be looking for an additional enterprise on-farm that was so labour intensive, he said.
Shan Goodwin
Journalist for The Land on the North Coast.
Journalist for The Land on the North Coast.
