Concern over how expanding herd size from 100 to 150 cows might stretch available management resources led Bill and Jeanie Rowekamp to turn over baby-calf-rearing duties to a local contract grower about a year and half ago. Good results in the early going have convinced this husband and wife dairying team from Lewiston, Minn., to stick with the program.
"Your milking cows are what provide the returns in this business," says Bill. "The way I look at it, the calf is returning me nothing. It's just an expense until it starts milking.
"In fact, she's still overhead until she has produced enough milk to pay for herself," adds Jeanie.
Freeing up feed supplies for additional cows was a key consideration in the Rowekamps' initial decision to shop out the calf-rearing chores.
"The way we were set up before, our calves would come out of hutches and go into one of two groups we had in the barn," says Bill. "They were getting a pretty good ration, the same kind of feed that was going to the dairy herd. We figured we'd get a lot better return on that feed by running it through the dairy cows."
Facilities were a consideration, too. Hutches for baby calves were getting older and needed to be replaced. "And with the expansion going on, our maternity pen was just too small," Bill explains. "We decided to take the group pens and convert them into a prefreshening pen and a postfreshening pen."
Labor was the third factor in the decision. Jeanie was spending 1.5 hours per day tending baby calves in individual hutches. The couple figured that time could be better spent managing records for the growing herd. "And I was probably spending another 20 minutes a day on the older calves, but with more cows that was likely to increase," adds Bill.
The Rowekamps' grower once a week picks up calves that have had at least four colostrum feedings from the dairy. He pays $150 for each calf.
"We like the idea of selling the calves to him rather than retaining ownership," says Bill. "If a calf dies [something that has happened just twice since the Rowekamps started working with the grower], it's his loss and we still have the $150."
After calves reach 600 lb., a written contract with the grower gives the couple the option of: 1) buying back their heifers at $1/lb. and bringing them back to their dairy; 2)buying heifers back from the grower but paying him an additional 85¢/lb. to rear the heifers at his facilities until they're a month off from freshening; 3)refusing to buy back the heifers.
So far, the Rowekamps have shipped more than 100 calves to the grower. They've brought all of the animals reaching 600 lb. back to their dairy. "We're set up to take care of them once they hit that weight," says Bill. "We have good facilities for them on a second farm. We put them on a forage/grain ration right away."
A key to making this kind of program work, says Bill, is selecting a grower who's willing to keep lines of communication open. "You have to make sure the person you're working with understands what you are trying to accomplish on your dairy," he says. "They have to be willing to help you meet your goals and objectives, even if it means making some changes or adjustments in the way they do things."
The Rowekamps expect animals to reach 600 lb. in nine to 10 months. "We want to get them into the milkstring by 22 months," says Bill. "We also want an animal with some leg and length. So far, we've been satisfied."
University of Wisconsin dairy specialist Terry Smith says working with a contract heifer grower is a strategy more Midwest dairy producers could or should be considering.
He points out that the average age at first calving in Wisconsin DHI herds is 27 months. "That means a lot of folks aren't getting heifers into the milkstring until 28 or 30 months," says Smith. "That affects the bottom line in a couple of ways. One, you're feeding them longer. Two, you have more to feed because it's taking you longer to bring them along."
Shrewd producers will push the pencil hard in making an assessment, Smith adds. "A lot of people assume they can do it cheaper than a custom heifer grower," he says. "But in many cases, they're ignoring the value of their own labor and management. Or they might be low-balling their estimate of feed costs."
For producers who opt to work with a contract heifer grower, a detailed written contract is an absolute must, Smith says. Be sure that the contract spells out specifics on the frame size, body condition and weight you expect at first calving.
An important clause in the contract: payment method. While a per-pound payment can be suitable in a situation like the one the Rowekamps describe--the dairy producer transfers ownership of the heifer with first buyback rights--Smith says a per-head per-day payment method is probably preferable. "It holds the grower a little more accountable," he says. "The dairy producer gets a little more control over how that animal is reared."
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