Dairy calf opportunities


3 min read

Owl Farm Pāmu Craigmore Additional resources

DairyNZ encourages dairy and beef farmers to consider breeding and rearing quality dairy calves to go into the beef supply chain. Seventy two percent of dairy farmers already use beef genetics to improve the value and performance of calves that are surplus to requirements for their dairy business. Some farms are already adapting their systems and management to further increase the value of their surplus calves.

Find out more about the dairy calf strategies at Owl Farm, Craigmore and PAMU - what they have changed already and what they are looking to do in the future.

Owl Farm

Video 1:08 min


Pāmu (Landcorp Farming Limited) is a State-Owned Enterprise with a nationwide portfolio of farms that produce natural products of high quality.

Pāmu is innovating through farm-scale evaluations at the Wairakei Estate in the central North Island.


Video 1:08 min

The Pāmu calf strategy

Calf rearing at Pāmu has taken a turn with a brand-new dedicated calf rearing facility at their Wairakei farming estate in Taupō. Pāmu aims to rear 100% of non-replacement calves by 2030.

Why does it work?

The rearing facility is supplied by nineteen dairy farms at their Pastoral Complex in Taupō. Currently, the herds from these farms are Kiwicross and calve in Spring and Autumn.

From the nineteen farms, over 11,000 non-replacement calves are born each year. Of these, currently 3,500 are being reared at Exeter calf rearing and another 2,000 spring-born calves are reared through external rearers. This should provide sufficient throughput to make the Exeter calf rearing facility viable.

How does the breeding policy work?

The breeding policy aims to balance the desirable traits for dairy beef rearing and adequate genetic gain for dairy replacements.The genetic gain of the breeding herd is advanced with targeted high-quality replacements. Generating replacements from a smaller proportion of the herd results in more beef calves by mating lower genetic merit animals to beef.

Sexed semen was used in some autumn calving herds in June 2021 to see if it will be suitable for their system.

What breeds are used?

Hereford, Angus and Stabiliser, mainly through natural mating, with traits such as short gestation, easy calving and high growth rates.

What system is used?

Calves are sorted into two streams (tiers) by birth date and genetic merit.

  • Tier 1 – Calves born within 10 weeks of calving with desirable genetics or breed traits
  • Tier 2 – Later born calves with lower genetic merit or slower growing breeds such as Jersey.

With the new rearing facility, Tier 1 is expanded to include animals with desirable genetics born within 12 weeks of calving.

The breeding and selection process means over time more calves are selected into Tier 1 where they have the highest opportunity for income (Figure 1).

The calves that are sorted into Tier 2 are currently bobby calves, but the goal is to reduce Tier 2 to zero, as new markets appear or less of these calves are produced.

How do partnerships operate?

Previous relationships with commercial calf rearing facilities are key, and are used to guide the new facility, including its design. The previous business agreements with calf rearers are still in place as the new facility is additional space for the planned increase in dairy beef calves that will be generated over the next few years.

How does the rearing work?

At a week old, calves are selected for Friesian or beef characteristics and health, and transported to the calf rearing facility. They stay indoors for the first three weeks, reared on milk and meal, and then moved to small outdoor paddocks. As growth continues, the calves are weaned off the milk and onto grass and meal. The projected growth rates are 800g/day on 225L milk fed and 65kg of pelleted meal. Whole milk and milk powder is used as required, the facility is currenlty using a 60:40 split between milk powder and whole milk. The 12-week-old calves are transferred to one of Pāmu’s local drystock properties, until 18-24 months, when they will be sold for beef.


Craigmore manages farm and forest investments in New Zealand, being a mix of dairy, grazing, forestry and horticultural properties. This spans 18,000 hectares over both islands. Craigmore seeks to identify ways in which they can deliver a positive impact, and long-term sustainability of food and fibre production is core to the Craigmore vision.


Video 1:04 min

The Craigmore calf strategy

Craigmore Farms has moved away from a traditional bobby and heifer replacement system to rearing 75 percent of all calves born for milk or meat.

In 2018 Craigmore made the commitment to extend the lives of as many calves as possible within their own farm gate. They took the first steps on two of their farms.

  • Sexed semen across the top 25 percent cows for the first 3-4 weeks of mating.
  • Bottom 20-30 percent of cows mated to beef.
  • All remaining cows mated to beef after enough replacements generated.
  • Managers involved to give a farm level perspective.

What breeds do they use?

Craigmore uses Hereford, Angus, Stabiliser, Speckle Park, Charolais and Belgian Blue with both natural mating and AI. Young stock were evaluated for satisfactory growth, meat quality, and potential for a quality dairy-beef end-production.

What bulls are chosen?

Bulls are selected first for calving ease. Other traits of interest include growth rates to 400 days, visible breed markings (e.g. white face) and short gestation, as beef breeds tend to have longer gestation than dairy.

How does the rearing work?

Spring-born calves are selected at a week old and transported to a local calf rearing facility that is contracted to rear the calves. In January the calves move to a grazier where they stay until they are prime weight.

What are the results?

An extra 511 dairy-beef calves reared (25 percent of calves born) in 2019, increasing to ~1000 more dairy-beef calves reared (50 percent of calves born) in the 2020-born group when compared with 2018. When you include replacements (20-25 percent), by the second year 75 percent of calves born on these farms were reared for milk or meat.

What are the costs in the supply chain?

A total of $460/calf. $80/calf for the calf rearing, $350/animal for grazing, and $30/animal sundry costs during their lifetime. This indicates a net break-even at best, with potentially small losses, depending on the market.

How do Craigmore partner for value?

Craigmore partnered with Ngāi Tahu Farming and Silver Fern Farms, mainly as part of their Reserve Programme

What next?

More work is needed on beef trait evaluation in dairy beef animals and a dairy beef brand which can be taken to processors and the market with confidence to expand the opportunities for dairy beef supply chain partnerships. Creating confidence in consistent, proven profit margins across the entire supply chain is vital to move away from the usual bobby calf farm income of 2 percent.

"We must earn our social licence to farm by offering a solution that gives consumers confidence in our farming practises and the quality of our product, as well as provide farmers with the tools to drive a future-proofed and sustainable step change." – Craigmore

Last updated: Sep 2021

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