Continuing our series on introducing livestock to an arable rotation, if you decide to do so you need to weigh up the pros and cons of investing in your own livestock or involving a third party.
While livestock bring undoubted benefits to soil fertility and as an alternative revenue stream when arable margins remain stubbornly lacklustre, owning livestock may not necessarily be the best way forward. But this does not mean arable farmers should give up on the idea.
When buying livestock there are several hurdles to overcome, warns Tom Heathcote, associate partner at Fisher German. “There is the capital cost, lack of skillset or knowledge and infrastructure issues including buildings and fencing.
“The big reason that puts someone off is the risk involved and the uncertainty of returns.”
The easiest option is to let land to a third party with their own livestock through a grazing or herbage licence, he suggests. “The third party has the right to graze the crop for a defined period of time. The landowner remains in occupation and in control from a capital tax perspective and is able to claim BPS on it.
“It is a very straightforward type of agreement, used widely. It is always less than a year and typically runs from spring to late autumn or early winter. But you can write flexibility into it. For example, if you are spraying off a ley for autumn establishment it may only run until July.”
Fencing is usually the responsibility of the landowner but can be erected reasonably easily, says Mr Heathcote. “A quick and short-term solution is to use plastic fencing stakes and attach wire or tape to them from a quad bike.”
An alternative for longer term leys of three to five years, is to use wooden fencing stakes with screw-in insulators and attach wire or tape from a quad bike. In future, these can be pulled up and transferred to another field.
Water is also usually provided by the landowner, he says.
“If there is a water supply [to the field], this can easily be reinstated or bowsers can be used if there is no supply.”
A handling system is usually required and, while many stock farms have mobile systems towed behind a four-wheel drive or tractor, being able to offer somewhere to hold some or all the stock is an advantage, says Mr Heathcote.
“This does not have to be sophisticated – a series of fenced pens and gates usually suffices.
“The more you provide, the more attractive the grazing will be for the third party.”
Livestock can be used to graze cover crops which are normally established at the farmer’s expense. However, while such grazing works well on light land, he urges those on heavier land to be cautious.
“There can be a lot of compaction as cover crops tend to be strip grazed. Do not underestimate the amount of compaction sheep grazing a narrow area across a field will cause. It can potentially undo the benefits of grazing, but if the ground conditions permit then it should be considered.”
Graziers will typically pay a licence fee of £50-£75/hectare (£20-£30/acre) for the right to graze it, depending on the cover crop, says Mr Heathcote.
While animal welfare is the grazier’s responsibility, the farmer needs to ensure the grazier fulfils any cross-compliance requirements, for example those concerning livestock movements and ear tags. This can be covered in the grazing licence, effectively indemnifying the farmer and enabling them to charge back any penalties to the grazier, explains Mr Heathcote.
Although income from the licence fee is a plus point, it will bring lower returns than arable land farmed in hand with no grazing at the moment, he says.
“But if the arable land is being farmed under a contract farming agreement, the returns from a grazing licence will be equal to and probably better than the return from arable.
“In the case of a contract-farmed arable unit, returns are about £40-£50/acre, from a grazing licence of about £60-£65/acre, both excluding subsides.”
Arable farmers wishing to invest in their own livestock need to commit to a certain amount of grass in the rotation for a minimum of three years and write off the cost over a decent period, says Mr Heathcote.
“The risk of doing so is a sudden change in commodity prices, e.g. cereal prices going up.”
Employing a stockman or shepherd is a long-term commitment and expensive. Instead, such skills can be accessed through a share or contract farming arrangement, suggests Mr Heathcote.
“This is similar to a contract farming arrangement for arable but for livestock, with the landowner providing stock and land while the contractor brings their expertise and equipment.
“The farmer buys the stock and feed and the contractor looks after them as required. Stock are sold at the end of a defined period, costs are deducted and profits then split. It works well for those thinking medium- to long-term.”
For farms without livestock housing, Mr Heathcote suggests finding a farmer/contractor to house them or having a system in place where stock are bought in spring and sold in autumn. “This affects the price but is an option if you want to own livestock but cannot house or find someone to house them.”
In areas which are predominantly arable, such as Lincolnshire, there are far fewer stock farms and it will be potentially more difficult for arable farmers to incorporate livestock into their rotations, says Mr Heathcote. “It is still possible but the availability of stock and individuals to look after them is reduced and costs will be higher.”
Manor Farm, Blaston, Leicestershire, is 320ha (800 acres), of which 260ha (650 acres) is arable. The aim, over the next five years, is to have 50 per cent of the farm down to grass either from leys or permanent pasture. Historically the farm had a close rotation of combinable crops and a small area of permanent pasture.
Five years ago owner Hylton Murray-Philipson, aided by Tom Heathcote of Fisher German embarked on a journey to improve soil structure and fertility through companion and cover cropping and the reintroduction of cattle and rotational grazing at Manor Farm.
Cattle had not grazed at Blaston for more than 20 years. Permanent grassland was getting tired and output was declining as a result of continuous sheep grazing.
Mr Murray-Philipson wanted to be actively involved in management of the changes so the decision was taken to invest in cattle. He purchased a herd of 35 in-calf South Devon cows from Sussex, from a farmer whose tenancy was ending.
Cows and calves graze on the farm in spring and summer and a local contractor houses, feeds and calves cows over winter. The contractor supplies a bull which runs with cows during late spring and early summer. In late summer, calves are weaned; some are sold while others are retained to replace culls and expand the herd.
Grass leys are down for typically five years and careful attention is given to getting the right mix of seeds to ensure appropriate levels of dry matter for livestock as well as providing good root structures to improve soil structure. Microclovers are being trialled this autumn. Stock are weighed on and off different leys in an effort to find grass mixtures which benefit cattle as well as soil structure.
One-third of the farm is soil tested every year in rotation – as well as standard soil test parameters, organic matter, carbon sequestration, compaction and trace elements are also measured.
At the end of the grass ley period the following crop is direct drilled into aftermaths. The ley is sprayed with a dilute glyphosate solution, enough to kill grass but not clover which is retained as a companion crop for the cereal being established.