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Important conditions to include in a heifer-raising contract

Donald E. Sanders Published on 18 January 2013

When a dairy producer partners with a heifer grower to raise replacements for his herd, a well-written agreement is essential. For such an arrangement to work, the responsibilities of each party – the grower and the producer – must be clearly stated in the contract.

Be sure your contracts with heifer growers include the following:

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0213pd_sanders_1 • Fees for raising heifers, negotiated price for purchase and subsequent return sale or formula for fee determination back to the dairy

• Statement of who owns the heifers

• Percentage of calves that must have serum total protein (IgG) levels over 5.4 gm per dl

• Disposition of blemished calves (hernias, swollen knees, umbilical abscess, cataracts, etc.) that are delivered to contract grower’s premises

• Number of A.I. services to be provided each heifer prior to using a clean-up bull

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• Arrival and return criteria for animals

The contract should state at what stage of pregnancy, or after calving, heifers are to be returned to the dairy.

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For instance, before a transfer, each quarter of a heifer’s udder should be palpated to ensure it is free of mastitis. And to rule out lameness, observe each heifer’s gait and look for swollen feet, hairy heel warts or abnormally shaped claws.

• Party that is to be responsible for cost of transportation

• Payment policy with due dates, procedure for payment and service charges for delinquent payment

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This should also include procedure for resolving a dispute when no payment is made or payment is delayed because of a disagreement.

• Acceptable limits for death losses at various stages of growth (including actions to be taken if exceeded).

The following are common:

• 24 hours to 60 days old: less than 3 percent

• 61 to 120 days old: less than 2 percent

• 121-180 days old: less than 1 percent

• Less than 1 percent from 6 months to calving

• Responsible party for death loss cost (which may be shared by the parties)

• Insurance on the heifers, including what it covers and who pays for it

• Culling parameters

This may include a practice of taking and emailing digital photos of stunted heifers that may be candidates for culling.

• Stipulation of who pays for veterinary costs and health supplies

• Rules for dissolving the agreement, records that are to be provided, details of payments that are due, procedures for picking up heifers and a timetable to close the relationship

Never dismiss any of these contract details with thoughts like “he can be trusted” or “we are good friends.” My advice: Protect your friendship by leaving nothing to chance nor open to misunderstanding. Remember, this is a business, not a hobby.

Required homework before entering a contract
Here are a few guidelines on information a dairyman should seek from a potential heifer grower before entering a contract:

• Prior calf records in the case of a candidate who is a former dairy producer (consider it a red flag if he cannot provide records)

• Verification of the candidate’s level of experience in raising calves

• Identification system used by the calf raiser

For a large operation, the dairyman may want a regular report on inventory and procedures performed, such as vaccinations, weaning, breeding and pregnancy checks.

• Facilities available for working and managing heifers to get them bred in a timely fashion, including headlocks and a chute

• Established protocols for calf health, before and after arrival

• Origin of other heifers on the premises.

You must make sure that all herds contributing heifers to the grower (including yours) follow the same high health standards regarding disease incidence and vaccinations.

If a heifer grower can’t answer these questions, or won’t, it is best to look elsewhere.

My top 10 answers to ‘what could possibly go wrong?’
I leave you with the top 10 good reasons for being careful in selecting a contract heifer grower and for developing a well-written contract that covers your interests. The following are what I’ve found to be the most common problems faced by dairy producers who work with contract heifer growers:

1. More than 10 percent of the calves didn’t receive adequate high-quality colostrum in a timely fashion.

2. Colostrum fed to the calves had a high bacteria count because of improper handling and cooling.

3. Grower lacked an effective program for testing calves for persistent BVD infection.

4. Poor-quality calves provided by the dairyman, due to their dams receiving inadequate nutrition prior to freshening.

5. Failure of contract heifer raiser to provide adequate care and nutrition

6. Failure of contract heifer raiser to keep adequate records, measure growth performance and aggressively respond to illness in calves

7. Stunted heifers, due to the contract heifer raiser severely limiting grain concentrate intake because of high feed costs

8. Geographic distance between the contract heifer raiser and dairy producer, prohibiting periodic monitoring of the heifers’ performance

9. Failure of the dairy producer to investigate the heifer raiser’s credentials, resulting in unfulfilled expectations, especially in regard to monthly payments

10. Contract heifer raiser grows heifers from several dairy farms without adequately confirming that each farm maintains a high herd health program PD

To find related information from Sanders please click here .

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Donald E. Sanders
Associate Professor
Ohio State University

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