A substantial number of deals are carried out each year for renting of sheds or wintering animals on a B&B-type arrangement. This, in turn, gives rise to a high level of queries regarding fair charges for both parties involved, while associated factors such as forage costs, where included, and labour and machinery running costs are also areas that raise questions.

Teagasc recently published a comprehensive guide to charges for wintering arrangements in 2020. The guide addresses all of the questions raised above and allows an individual cost per head to be determined for each of these variables. The type of animal will have a major influence on charges negotiated as it will influence how many animals can be comfortably housed in a given space, while where forage is part of the deal the intake requirement will directly influence total volumes and typical costs.

The charges are based on the cost of having to build a slatted unit. Teagasc figures for the construction of a slatted unit including all fixtures and fittings but not slat mats are listed as €400/m2. If slat mats are included, the cost increases by approximately another €50/m2.

Leaving aside slat mats, if the cost is spread over 20 years this equates to an annual cost of €20/m2, rising to €24/m2 when a 10% annual maintenance cost is included.

Table 1 details the space allowance for different categories of stock and uses this to determine the cost per head and per day. For example, a 1.5 to two-year-old animals requiring €2.5m2 is listed with a cost of €60 per head. The cost per day assumes that the typical length of the winter housing period is 150 days.

Account needs to be taken of the volume of meal fed when determining forage costs.

It is difficult to standardise costs on a per-bay basis but if the area can be determined the data in Table 1 can be used to establish costs. It is also important in this regard to take account of feed space as this may limit the number of animals that can be housed in a given area before space allowances kick in.

The guide treats suckler cows differently to dry cattle due to varying shed requirements. Teagasc estimates that for a slatted suckler cow unit comprising a slatted area allowing space of 2.8m2 to 3.0m2 plus associated calving pens/creep areas and handling facilities, the cost would be €1,600 to €1,800 per cow. This design is based on an autumn-calving or early spring-calving herd where there is a high requirement on housing animals in a creep area.

The guide also details costs for a straw-bedded suckler shed allowing 4.5m2 per cow and 1m2 for its calf. Such a shed has a guideline cost of €1,300 per cow-calf space. This shed is more appropriate in tillage strongholds due to the rising cost of straw.

Forage costs

The guide has set out the cost of production for good-quality grass silage for 2020 at €160/t of dry matter (DM) or 16c/kg DM. This relates to just direct production costs without any land charge included.

Teagasc advises including a 20% margin over production costs in order to leave a margin for the farmer growing and ensiling the crop. This increases the cost of good-quality silage to 19c/kg DM or €190/t of DM.

The costs will need to be adjusted where silage quality is average or poor and higher volume of concentrates have to be fed to sustain performance similar to where animals are being offered good-quality silage.

The forage cost per day will also be influenced by whether or not concentrates are fed as this will displace forage intake. Tables 2A to 2E detail guideline forage charges based on varying levels of concentrate intake for a range of animal types. The intake levels assume each animal is eating 2% of their bodyweight in DM and meal has a DM of 85%.

The tables just calculate silage costs as meal prices will vary significantly and can be easily calculated. The guide also advises that where daily silage costs are not an attractive method of establishing forage costs then an alternative that can be used is to agree a price per tonne or bale of silage fed.

With regards straw used for feeding or bedding, the advice is to charge by the number of bales used.

Labour and machinery

In certain cases, the owner of the shed will provide labour and the machinery to feed or bed the animals. Teagasc has developed a model for calculating these charges. It uses a measurement of standard man days (SMD) to calculate the amount of time involved for feeding and tending to animals on housed on slats and straw bedding.

A SMD is equal to eight hours work completed by a person over 18 years old. It takes account of Teagasc management data and lists 0.6 SMD per head for wintering animals in a self-feed silage system with an efficient layout and 0.8 SMD per head where animals are wintered on straw bedding. For example, one animal at a rate of 0.6 SMD is 4.8 hours’ work. At an agreed labour charge of €14/hour, this equates to €67 per head or if calculated on a 135-day winter it works out at 50c per day. Table 3 details an example of charges per day based on three different hourly labour charges. The figures are based on eProfit Monitor analysis on beef farms with a 15% margin built in.

Farm example

An example in Table 4 is based on renting a shed to house 80 finishing steers over 140 days. The shed owner is providing the silage and feeding the animals daily.

Value of slurry

Account also needs to be taken of slurry produced while animals are in rental accommodation. The guide says that where the owner of the cattle takes the slurry, there is generally no need to discuss any costs. There may, however, be a charge if the owner of the shed has responsibility for spreading the slurry. Where this is the case, Teagasc advises that account needs to be taken of the nutrient value of slurry, with this adjusted against spreading charges.

Taking cattle slurry with a typical dry matter content of 7% and a nutrient content of 3.25kg nitrogen, 2.5kg phosphorus and 15kg potassium, 1,000 gallons of slurry is worth approximately €20. This is calculated with nitrogen valued at 94c/kg, phosphorus valued at €1.99/kg and potassium at 76c/kg. In such a scenario, Teagasc says the cost of spreading would be cancelled out by the value of the slurry.

Housekeeping rules

There are a number of important factors that should be borne in mind outside of the direct costs. These are summarised below.

  • All agreements should be clarified and recorded on paper at the outset no matter how good the relationship is between the owners of the shed and the animals. This should include aspects such as accepted level of mortality in a B&B arrangement, who is responsible for paying for any damages and how ESB and water costs will be metered and charged. Another aspect that is often a bone of contention is cleaning and power-washing facilities following the housing period.
  • The movement of animals must abide by Animal Identification and Movement (AIM) rules. These are complex depending on the type of movement and further information can be found at www.farmersjournal.ie or through your regional veterinary office.
  • Take note where animals are changing herds that this will count as a movement in terms of adhering to Quality Payment Scheme requirements. Also, note requirements around quality assurance and desired retention periods on the final farm pre-slaughter.
  • Both parties are advised to inform their insurance company of the arrangement as failure to do so may affect your policy in the case of issues arising.