Dairy beef has significant advantages, Dairy Australia conference told

Prime Value paid $62.5 million for 11 of the former Van Dairy Group farms, including 5000 cows and yearlings, in north-west Tasmania in May last year.

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Prime Value's Dairy Investment Fund manager Kirsti Keightley, Port Fairy, told the Dairy Australia Growing Beef from Dairy conference, Melbourne, the sector had "an amazing future, which can fill current supply gaps."

"Sexed dairy semen has made it possible for dairy farmers to get their 25 per cent replacements without having to breed male calves they had no use for," Ms Keightley said .

"They can then follow up with a beef bull which opens up new market opportunities, allowing consumers to enjoy the tender taste of dairy beef."

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Ms Keightley, husband Stuart and son Josh run both dairy beef and dairy farms in south-west Victoria.

With eldest son Wesley managing the dry stock operation for Prime Value and running his own beef farm in Tasmania, she said she felt the time is now right to expand to Tasmania.

"I have been doing dairy beef for 26 years, some years you made money out of it, other years you didn't," she said.

"That's the only reason many farmers don't go down a dairy beef path because they don't know - when they are rearing the calf - whether they are going to make a profit out of it.

"It's really about developing the market and making sure we have an end market, that way dairy farmers will take part."

She said the family currently runs its own 400-cow dairy farm, in the south-west, with a separate dairy-beef operation.

They had started to establish their own dairy beef brand, Port Fairy Beef, by selling meat through the local butcher shop and supplying it to several high-end local and Melbourne restaurants.

"I am getting a good premium over what I would get at the yards," she said.

The beef farm has 350 mixed-aged dairy beef, taking calves through to about 530 kilograms, for a carcase weight of 280-290kg.

They used Speckle Park and Angus beef bulls over cross-bred New Zealand Friesian and Jersey-cross females.

The farm used sexed semen to get dairy replacements.

"We are selecting out the best cows and using sexed semen, and that's our dairy replacements, and we put the bulls over dairy cows, when we don't want to keep them," she said.

"We have used a lot of different breeds," she said.

"I don't have any particular preference but the reason I have gone to Speckle Park is because it's very difficult for people to tell the difference between an Angus-cross calf and a dairy cross calf," she said.

"The dairy farm rears the beef calves for us, before they come down to the grazing block," she said.

Previously, the Keightleys were growing out calves to 12 months of age, before sending them to the saleyards.

"We were were never happy about having bobby calves being seen more as waste product," she said.

"We were eating the neat ourselves and thought it was a really great product, that's when we approached the butcher in Port Fairy."

They were initially knocked back, but late last year a new butcher took them on.

"They said the consumer is looking for that local, grass-fed meat - it's a slow build but it's going really well."

The next step was to investigate the potential to expand dairy-beef into Prime Value's Tasmanian properties and convince investors to back the move.

"Being a Kiwi, I like growing and feeding grass," she said.

"Tasmania grows a lot of grass, it's the cheapest form of feed, so we've gone that way, but potentially I can see a feedlot situation as well."

She said clarification was required around what was meant by dairy beef.

"As an industry, going forward, we have to be very clear about what we are actually marketing," Ms Keightley said.

'A lot of people think dairy beef is an old dairy cow - you have to show people what a dairy beef animal is."

The next step was to investigate the potential to expand dairy-beef into Prime Value's Tasmanian properties and convince investors to back the move.

But Ms Keightley said the "burning question" was the cost of investment in the sector.

"In Tasmania we are calving 6,500 cows, spring calving, over 9-10 weeks," she said.

"The issue I have is that potentially, down the track, we could have 5-6000 beef calves and we have to build infrastructure to rear those calves and fund a labor force to be able to feed them," Ms Keightley

"I think that's the biggest question for the whole dairy-beef industry, how are we going to do that?"

Most of north-west Tasmania was based on seasonal calving.

"Is everyone going to go out and spend $1 million on calf rearing facilities? Where are the staff going to come from - and you are only going to need them for a short period of time.

"If we don't get that right, the whole industry falls over."

But she said notwithstanding the challenges, she felt the sector had a bright future.

"Meatworks have a period where they can't get stock, usually in winter; when Australia is hit by drought or flooding, we can lose the herd," she said.

'With the dairy industry, a cow has to have a calf every year, to produce milk, and we can fill that gap - I see there is a nice, niche market for that product.

"It's a matter of the whole industry working together to grow a market where everyone along the chain can make money, from the dairy farmer, calf rearer, background farmer to the meat processor."