DCHA Tip of the Week: Contract essentials for raising heifers

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This week’s Tip of the Week is courtesy of the Dairy Calf and Heifer Association.

Raising dairy heifers until they are ready to enter the milking herd is a substantial investment, so having a clear, detailed contract is important to outline the responsibilities and expectations of both parties.

"When dairy heifers are being raised by a third party, having a written contract in place is essential to outline the terms of the agreement and to clarify who’s responsible for the various expenses and management tasks,” says Tamilee Nennich, associate professor and extension dairy specialist at Purdue University.

In a recent Purdue Dairy Digest podcast, Nennich explains some of the key details that need to go into a heifer-raising contract. When writing a contract, one of the first details that need to be determined is how long the heifers will be raised and what stage or stages of growth the contract will cover. The next major consideration to determine is the cost of raising the heifers.

"Although many contracts are written based on a daily feeding rate, some contracts use other strategies to determine pricing, such as a set charge per pound of gain,” Nennich says.

In addition to negotiating the cost for raising heifers, it is important to include details as to what the expectations are for heifer growth and development. Also be sure to discuss and outline these issues in your contract:

· Who will absorb the cost when a heifer dies?

· Which party pays for vaccinations and any veterinary expenses?

· Person responsible for transportation costs.

· Details and expectations for breeding heifers, if heifers will be raised during breeding.

· Information on expected age and size at breeding, as well as person responsible for paying synchronization and breeding costs and how breeding decisions will be made.

"Custom raising dairy heifers can be beneficial for both the dairy farmer and the heifer raiser, but having a contract that clearly outlines the terms of raising the heifers will help to ensure that everyone clearly understands their responsibilities and has similar expectations,” Nennich says.

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