A SWING to beef amongst dairy farmers hard hit by plummeting farmgate milk returns looks even more likely with solid price lifts for Wagyu cross calves.
Pioneers of Wagyu Holstein crossbreeding in Australia, Victorian company Beefcorp has just announced a forward contract of $220 per head for both bull and heifer bobby calves at seven days.
The deal gets even better for farmers prepared to grow out calves with $900 available for six to eight month old calves.
Third generation Colac milk producer Phil Harris, who has been supplying calves to the Wagyu-cross market for 20 years, said those prices would justify implementing a major artificial insemination (AI) program using Wagyu.
“A lot of dairy farmers down here are looking for a longer-term alternative - this latest price drop has been very hard and people have had enough,” he said.
“Taking on Wagyus, rearing them and turning their farm into beef looks like a good option.”
Victorian and NSW specialist dairy agent Brian Leslie, DLS, said there were a number of dairymen buying bulls with the theory of keeping heifers for future beef mothers.
A recent dairy Shorthorn sale had attracted buyers with that purpose and other breeds, such as Speckle Park and Angus were also being utilised, along with Wagyu, he said.
“A lot of southern dairy farmers have other properties and while it’s not everybody adopting this strategy there are certainly more this year than last thinking they’ll head into beef sooner rather than later,” he said.
The Sher family owned Beefcorp sends chilled beef, across more than 30 cuts, to high-end markets including Japan, Taiwan and China.
Calves are contract reared, grown out on pasture to 350 to 400 kilograms liveweight then finished for 400 days in a feedlot.
They are processed at 750kg liveweight and the beef exported to 12 countries under the Sher Wagyu and Sher Black brand.
Demand for the Wagyu Holstein product across the board was growing, according to Beefcorp managing director Nick Sher.
There was increasing awareness of the quality of Australian product, greater brand recognition and more inquiry from high-end restaurants, he said.
“We understand what the dairy farmers are going through as we’ve dealt with some tough times over the years in the beef industry,” Mr Sher said.
“We’ve been working with dairy farmers for two decades and with a growing world market for Wagyu beef, we can offer a very good return for dairy farmers who breed their Holstein cows and heifers to our Wagyu semen.
“At least this way they can get a far better return for surplus calves.
“The other benefit is Sher Wagyu semen is highly fertile and the Wagyu calves have a low birth weight giving calving ease on heifers.”
With his son Alistair, Mr Harris milks 600 Holsteins under a pasture-based system at “Writhgil”, Larpent, near Colac.
Two hundred heifers a year are joined, the pick put through an AI program using Holstein sexed semen.
“We then load the paddock with Wagyu bulls supplied by Beefcorp,” Mr Harris said.
The Wagyu-cross calves are sold back to Beefcorp at 10 days.
The Harris’ have been joining later-calving cows to Holstein bulls for the export market to China and to meet local demand.
That has been a strong market in recent years, with 12-month-old heifers making as much as $1200.
However, with China having built up numbers significantly, and no current appetite for growth in Australia, the Wagyu-cross option is much more competitive.
“We might well swing into beef in a much bigger way,” Mr Harris said.
There were three big reasons “Writhgil” first became involved with Wagyu beef and stayed in the game so long, Mr Harris said.
“It is a guaranteed outlet for our surplus calves and Wagyu-crosses are worth twice what Holstein calves are,” he said.
“Even at the moment with the nationwide cattle shortage, there is little demand for dairy bull calves.
“There is just very limited interest in young veal.”
Possibly the greatest benefit, however, has been the ease of calving the Wagyu element brings.
“They are a very veal-like animal, dynamically shaped for calving, with low birth weights,” Mr Harris said.
“That means no calving problems with heifers and that is of enormous value.”
Finally, the Harris’ don’t have to breed or source bulls.
“Bulls are only nuisances to a dairy farmer,” Mr Harris said.
Wagyus were good to work with, he said.
“They are a bit different looking in your paddock but well temperamented and very intelligent,” he said.
“The calves are small and active and easy to teach to feed.”