Beef farmer Colin Henke on profit and sustainability

A southwest Victorian beef farmer has been working on the most efficient farming system and explains how he calculates profit.

All of the breeding, marketing and management decisions made by Colin Henke are to ensure profitable and sustainable beef production.

And alongside this was the need – and drive – to develop the most efficient farming system to be able to service debt from purchasing their property.

Colin and his wife Karen own and operate Lakala Pastoral Company at Mumbannar, in southwest Victoria – about 30km east of Mt Gambier and 20km, as the crow flies, from the coast.

There they run a 1000 cow Angus herd on 1000ha, turning off 470-500kg feeder steers, 430-500kg feeder heifers and pregnancy-tested-in-calf females.

Prior to purchasing Lakala in 1998, which Colin said they were able to do due to an initiative of the Rural Finance Corporation of Victoria targeting young farmers, he was running the nearby family farm which ran an autumn calving Hereford cow herd for weaner production. They were also breeding for the Jap-Ox market, which became uneconomic with the collapse of that market.

He said when they first went out on their own, it began with “a lot of debt” so they had a 50:50 split of lamb and beef enterprises, which was the best economic model at the time.

Colin said their desire for the “most efficient system” led them to a spring-calving Angus herd.

“The Angus has such a high value carcass and the feedlot industry fitted well with a spring calving system.”

Colin Henke and some of his Angus cattle, at his Mumbannar farm. Picture: Nicole Cleary

While grazing both cattle and sheep worked well for almost two decades, as the Henkes continued to build up their cattle numbers the sheep dropped away and they have been 100 per cent cattle for the past five years.

Although Colin said a small portion of the reasoning was because he wasn’t “getting any younger” and cattle were easier care, the ultimate reason was due to economics.

“We like to look at what we can produce on a kilogram per hectare basis. We find that more applicable than looking at the amount you are producing and the price for the product. Calculating kilograms per hectare means year-in year-out the productivity measure is the same,” he said.

They work on 500kg/ha liveweight turn-off for cattle.

Colin said moving the calving date to spring enabled them to increase their cow numbers 20-30 per cent, on the same area, than when they were autumn calving.

“The broad concept of moving the calving date centres around having peak numbers on the ground when we have maximum grass growth rates and eating that growth, rather than harvesting it and feeding it back,” he said.

At Lakala their dry sheep equivalent is 26,000-28,000 in the peak of spring to 15,000-16,000 in winter.

Joining was in October for heifers, which are 14-15 months old, and early November for cows, with calving the following August.

The cows are mated naturally with 100-150 cows joined to two bulls.

“I do supervise a bit, I like to see a bull visually serving, as the cows are joined for two cycles it doesn’t give much room for error,” Colin said.

Heifers were joined for three cycles.

Colin said 70 per cent of cows calves in one cycle, but overall conception rates were 93 per cent of cows were in calf in two cycles and 85 per cent of heifers were in calf in two cycles.

He said tightening up the calving patterns means they have been able to join 90 per cent of their heifers, which then enables them to sell their cows at 6½-years-old.

“This has enabled a rapid generational turnover of genetics as a generation is only a six-year period.”

Colin said in the initial stages of researching profitable production systems of beef cattle, he attended a workshop facilitated by consultant Phil Holmes who maintained that your optimum calving date was heavily influenced by your latitudinal location.

“I haven’t heard this from anyone else, but Dr Holmes advocated counting your calves on a weekly basis while calving and creating a bell curve, charting calves on the ground versus time. The resultant peak in the bell curve would be your optimum calving date as that is when the cows were cycling readily.”

Colin said their calving date has been set using that method.

All females are pregnancy tested, which allows them to identify pregnancies into three to four week periods, which them helps with decision making for marketing surplus females as well as managing calving females.

Weaning was in mid-January at five-months-old, which was generally considered early.

Colin said their experience weaning lambs at 12 weeks gave them the confidence to wean at five months, or earlier in a tough spring.

“The suckling animal is getting only about 10-20 per cent of their feed requirements from milk at that age. Milk at that age only becomes a source of protein, which can be replaced with more economic means. In other words, not putting feed through a cow to produce a moderate amount of milk for the calf.”

He said 150-250kg calves can be given preferential feed and supplementary feeding if necessary over late summer and autumn.

“Earlier weaning reduces the maintenance requirements (therefore costs) of our cow herd as the lactation period is shorter.”

Colin Henke and some Angus cattle. Picture: Nicole Cleary

At Lakala they were aiming for the short to medium feeder market, with steers sold direct to a feedlot at 470-500kg and heifers at 430-500kg.

The first steers generally reach that weight at about 14 months old, off grass.

Located in a temperate environment, with an average annual rainfall of 700-750mm, 90 per cent of the pastures at Lakala were perennial with rye-grass and cocksfoot being the predominant grasses and sub-clovers being strawberry clovers and some white clover.

Colin said selling direct to feedlot fitted with their production system.

“The feedlot industry is ready made for, and is economical, for a pasture based breeding system.”

And while the Angus breed achieves a premium, the breed was initially chosen because it has the ability to service all markets.

On their quest to continue to breed more profitable cattle, the Henkes joined Team Te Mania in 2012. The Team Te Mania program ultimately means members have access to subsidised genetics through a three-year bull leasing program and Te Mania receives data and feedback from the genetics.

Colin said the attraction for them was the stable price and the fact the bulls they had access to were in the top 15-20 per cent.

“When you go to a bull sale, you think you are going to get a particular set of bulls, but if the price is too high, then you get back up bulls and they may not be as aligned with what you need.”

He said there was also a huge benefit in outsourcing some of the genetic decisions to Te Mania.

“We have input in what we want, but they are the genetics experts and have a lot of knowledge we can tap into.”

The focus at Lakala was on producing quality beef, with carcass traits and growth the most important Estimated Breeding Values they selected on.

Marbling has also become a “very important” selection tool Colin said, as a lot of grids show how grading or quality can jump up with higher marbling.

Another valuable part of the program was being able to sell surplus females in the Team Te Mania female sale each year.

“We usually sell PTIC six-year-old females at the sale and this year they made $4200 to $4500.”

For the Henkes, making decisions based on knowledge and data has ensured they are maintaining their profit and sustainability for the future.