Northland bull beef farmers Dennis and Rachelle O’Callaghan have been involved in Beef + Lamb New Zealand’s Beef Profit from Pasture programme, which has helped them further focus on pasture management – a key driver in their business. Sandra Taylor reports.

Dennis O’Callaghan tells a story that nicely summarises the main driver behind the Northland bull beef operation he farms alongside his wife Rachelle.

The couple, who were Supreme winners in the Northland Ballance Farm Environment Awards in 2018 have successfully maximised productivity and profitability while protecting and enhancing their natural resources.

Dennis’s story is about a dairy farmer who was given what looked like a drench container by his father-in-law and told that if he put this container in a different paddock every day his pasture and milk production would increase exponentially.

After six months of shifting this container daily, the father-in-law’s predictions proved to be correct.

It turned out there was nothing magic in the container. It was simply the discipline of moving it, closely observing pastures every day and making management decisions based on those observations that made all the difference.

Sometimes you sacrifice animal growth rates to maximise pasture growth
rates and at other times you sacrifice pasture growth rates to maximise
animal growth rates.’

Dennis talks a lot about pasture quality because that is what drives cattle growth rates and ultimately profitability in their business and retaining pasture quality is a constant challenge in an area where kikuyu grass is endemic.

“Our aim is to grow good quality grass and convert it into beef as efficiently as possible.

“Sometimes you sacrifice animal growth rates to maximise pasture growth rates and at other times you sacrifice pasture growth rates to maximise animal growth rates.”

Arguably kikuyu is both a curse and a blessing. While the C4 grass lacks quality once it develops stolons, it has forced farmers like Dennis to be assiduous about pasture quality and this has generated big production benefits in their business.

Mowing boosts production

The former Taihape sheep and beef farmer admits he had never paid enough attention to pasture quality, but after moving to Northland and noticing that mown kikuyu gave them significantly more production than unmown, he began to take a lot more notice of pasture management.

He turned to some of the leading dairy farmers in the region to learn about pasture management and has applied those principles in their intensive bull beef operation.

When they took over Temataa Station, their 608-hectare rolling hill country farm near Taipa, the couple ran 3000 ewes and 200 breeding cows and their progeny, but they struggled to finish the lambs to good weights. Financially the cattle side of the business – once they had intensified it – was outperforming the sheep – even when they were getting $6/kg for their wool, $120 for their ewes and $130 for the lambs.

The cattle were still generating twice as much per hectare than the sheep even in a very good sheep income year.

Dennis and Rachelle dipped their toes into intensive beef finishing after seeing what local farmer Lindsay White was doing on his farm with small 1ha paddocks on a long rotation.

They fenced 24ha of their farm and immediately doubled production off that area.

Dennis then went looking at TechnoSystems and was sold on the whole concept. In 2003/04 they set up a techno-system finishing Friesian bulls and immediately trebled production. They have subsequently fenced the whole farm into a mix of techno-systems or cell grazing systems, although Dennis particularly favours the simplicity and flexibility of the TechnoSystem.

They did use a consultant to design many of systems using GPS. His services, along with all fencing and labour costs meant the whole system cost $500/ha to set up and another $1500 to stock.

But the reliability of this system means they are consistently generating $1500/ha/year over the whole farm. Dennis says the bank loves this reliability of income which is so rare in dryland sheep and beef farming.

The couple continued to run 250 breeding cows and finishing the progeny until they were found to have Mycoplasma bovis tracer animals in their Friesian bulls and they decided to not to replace their cows after they had depopulated the whole farm.

“After M bovis we have had to re-evaluate our whole farm policy.”

Environmental concerns have also been a factor is determining farm policy and after struggling with the pugging and lost production caused by carrying R2 bulls and the cows through winter, they now buy in 2400 100kg Friesian bull calves and sell them as 330kg yearlings.

Dennis enjoys operating in the Friesian bull market as it is removed from many of market vagaries driven by climate and other factors.

“There is a lot of emotion in that traditional beef steer and heifer market but not with bulls, you just don’t have those grass market issues and that’s why I like it.”

Fixed-price contracts

Dennis and Rochelle start pulling together fixed-price contracts with professional calf rearers in May and June to ensure supply in spring. These rearers are typically based in the Waikato or South Island although the couple do buy some calves from local dairy farmers.

The calves go into the intensive grazing system – a combination of techno-system and cell-grazing – just as the yearlings are being sold.

The bulls are run in mobs of 20-25, although they do have mobs of up to 30, stocked at 4/ha on the hill, which is the bulk of the farm. While Dennis has played around with different stocking rates, he has found 4/ha is optimal for both pasture quality, productivity and profitability.

A lighter stocking rate meant they had more trash to be dealt with and a higher stocking rate meant behavioural issues with the bulls pushing on the fences – something that is not a problem at 4.5/ha.

They can push the stocking rates up to 6/ha on the 120ha of flats.

All the animals in the TechnoSystem and the cells are shifted every second day. The length of the rotation varies according to the time of the year and over winter the rotation is 60 days reducing to 20 or 30 days over spring.

One of the challenges is knowing when to speed the rotation up in spring as pasture growth is explosive.

“We never speed up our rotation early enough or quick enough.

“In spring, once you see that grass it’s too late.

“You need to get on top of it before you see it.”

Dennis admits this is more of a psychological issue as it is hard to confidently speed up rotations after spending all winter trying to conserve feed.

Kikuyu management

As long as the kikuyu has been managed correctly in autumn – and this means either mowing it to the ground or mulching it (ideal but a lot slower to do) –  then the pastures will revert to ryegrass and clover and stay that way until late December when it reverts to being a kikuyu-dominant pasture.

Initially, the kikuyu does have good feed quality, but when it becomes reproductive, the quality plummets and hence the need to mow it.

They start mowing behind the bulls in March and this goes on throughout autumn.

In complete contrast to most other farmers, Dennis aims to go into May with minimal pasture covers.

“If we go into winter with pastures down to the bare-boards on May 1 I would be rapt.”

Mowing is a significant cost to the system – around $70/ha – but the cost of not doing it is even greater.

Mowing the pastures allows the ryegrass and clover to flourish over the cooler months.

Dennis admits he will not contemplate any re-grassing programme as they simply won’t get the pastures to persist in their environment.

The Nuie ryegrasses planted 60 years ago have adapted to the environment and Dennis firmly believes production on their farm is all about pasture management and not about the grasses. Clover is important and is very evident in their pastures, although Dennis says it does suffer when it is too wet or too dry.

This attention to pasture management is generating 1000kg of beef per hectare.

The yearling bulls are often sold to finishers in the Waikato, or any region that has grass.

It can be a balancing act, as it is the finishers who decide when they are going to kill their R2 animals and therefore will be in the market for the yearling, but it is usually in November.

It is the buy-in price and sale price which determines their profitability and Dennis works alongside a stock agent who works hard on the family’s behalf to optimise returns, although they work on averages rather than the peaks and troughs of trading.

Dennis speaks highly about the team who are an integral part of their business and this includes AgFirst farm consultant Gareth Baynham, their bank manager, accountant and the aforementioned stock agent.

He says they have no real animal health issues, but Dennis will talk to their vet at various times of the year just to get updated about new information or issues he should be aware of.

“If you feed animals sufficiently, they are under less stress so they are less likely to get sick.

“We try and keep stress as low as possible and feed stress is a big part of that.”

Similarly, routine is very important to bulls so they are shifted at the same time every day.

Dennis and staff member Matt have honed their system to the extent that they can shift 1000 cattle – run in 50 mobs – in just two hours. This shifting means they clock up 8000km on each of their bikes, so fuel is one of their major farm expenses.

The climatic advantage

The big advantage for the O’Callaghans is their climate.

“We can grow young cattle all winter where most people further south would struggle.

“It’s warm and we can grow grass and that’s what we’re good at.”

Dennis believes it is easy to under-estimate how much cattle eat just to keep warm – and that is another reason they have moved away from finishing cattle. It takes a lot of feed to carry those older animals through winter.

They do apply small amounts of nitrogen – a total of 60kg/ha/year – in early winter and spring.

Thirty kg/ha is applied in early May, when the kikuyu is slowing down to help kick the ryegrass into gear and the same amount is applied during the first week of August. This spring application is via a helicopter because the ground is usually too wet for a vehicle.

“We need to get it on then to get the spring growth going.”

The farm produces the most pasture and therefore product between August and November so the farm is set up to maximise production over the money-making months.

Northland weather patterns are reasonably reliable and while rainfall totals 1200mm, it can come down in huge amounts. It typically gets dry over December and it is this dry that allows the Kikuyu to dominate.

Environmental benefits

One of the unexpected benefits of this intensive grazing system has been the build-up of topsoil.

Dennis says the sub-soils over much of the farm are poor, but 10 years after setting up the system, top-soils have doubled in volume which has had benefits in soil water holding capacity, drainage and in getting nutrient cycles underway.

Confined to small areas means the cattle means there is no transferring of fertility to paddock campsites and water sources and the organic matter is continually building up.

The farm’s podzol soils were once under kauri forests and the leaf litter from these ancient forests created a pan in the soil. Dennis explains that the soils are unique in that they cannot hold on to nutrients so they use slow-release Reactive Phosphate Rock.

While they don’t get a boost from this fertiliser application, they don’t get a tail-off either. They measure Resin P levels rather than Olsen P to measure phosphate levels in their soils.

Dennis and Rachelle won the Supreme Award in the Northland Ballance Farm Environment Awards in 2018, along with the Waterforce Integrated Management Award, Ballance Agri-Nutrients Soil Management Award and the Beef + Lamb New Zealand Livestock Award primarily because of the care they take to protect their soils, waterways and sensitive areas of the farm.

As well as the farm policy of selling most of their bulls as yearlings, the couple have fenced across their hill-sides to minimize run-off and protect the soils. As they have fenced-up areas of the farm, they have also invested in a reticulated water system to micro-troughs.

Phosphate has been identified as a problem in waterways in their catchment and the O’Callaghans have taken steps to minimize P losses, such as contour fencing, planting all gullies and the fencing off of all waterways.

As well as benefitting the environment, these measures have been advantageous to the business in that nutrients and soils have been retained across the farm, rather than being lost into waterways.

Dennis favours taking a catchment approach to improving water quality as it allows all stakeholders to work together to address the issues specific to their catchment.

Beef profit from pasture

In the past three years Dennis has been chairman of Beef + Lamb New Zealand’s Beef Profit from Pasture Group. This group, which was facilitated by AgFirst farm consultant Gareth Baynham, sought to identify strategies that lift pasture eaten from May to December by 1000kg DM/ha on Northland farms.

At 30c/kg DM this is $300/ha more revenue – or 25-35% increase for a typical Northland farm.

Pasture growth from May to December is typically more profitable and growth rates more consistent than summer and autumn months.

The group worked to identify, test and demonstrate the effectiveness of pasture management strategies and share these strategies with other farmers. They drew on many of the tools and techniques used by dairy farmers.

The focus was very much on managing pasture, rather than re-grassing or cropping, although the group did look at sowing annual (or Italian) ryegrass into kikuyu.

Among the management practices the group considered were rotational grazing versus set-stocking, 30-day versus 60-day winter rotations, autumn kikuyu management and the relationship between stocking rate and pugging.

What they learnt

Faster winter rotations resulted in less pasture growth, lower pasture covers and more pugging, but rotational grazing was still superior to set-stocking with 29% more pasture harvested, 50% less pugging, 60% more liveweight gain and $574/ha more income.

A longer 60-day rotation resulted in 77% more pasture harvested, 44% more liveweight gain and $212/ha more income than a 30-day winter rotation. Pasture quality was also better in winter and spring under the longer rotation.

Mulching or mowing kikuyu increased liveweight gain by 35% over hard-grazing which only increased liveweight gain by 18% compared to doing nothing.

There was a net benefit of around $150/ha for hard grazing or mulching compared to no kikuyu control but mowing had the highest net financial benefit of around $240/ha or 60% more because it was a cheaper than mulching.

Stocking rate and pugging. Two of the past three winters have been very wet so pugging has been a major issue on Northland farms. A 2017 demonstration comparing R1 and R2 cattle highlighted significant differences in pugging, production and profit.

There was more pugging in the R2 cattle system (78% pugged compared to 50% for R1). While production was good under both systems, weight gain in the R1 cattle was exceptional at 941kg LWG/ha which was 72% more than the R2 cattle. Pugging would have contributed to this difference in performance.

While running lower stocking rates reduced pugging, production and revenue were similar across low, medium and high stocking rates.

Variable stocking rates. A strategy of running lower stocking rates through winter then topping up with extra cattle in spring did benefit with high pasture covers and reduced pugging even after the extra stock was added. This resulted in 29% more liveweight gain, however this was off-set by the premium paid for extra cattle in spring – so revenue was similar.

It is also important to remember that adding extra bulls to mobs in spring can be logistically challenging.

Annual/Italian ryegrass. While sowing annual ryegrass into kikuyu increased pasture growth and cover resulting in a 10-50% liveweight gain, most of the advantage was lost in the cost of buying and establishing seed.