Economic incentives for preserving biodiverse semi-natural pastures with calves from dairy cows

Economical profitability of pasture-based beef production is necessary for continued maintenance of semi-natural pastures. In a situation of decreased cattle stocks, there is a potential to castrate male calves from dairy cows and raise them as grazing steers instead of intact bulls reared indoors, which is the common way in the Nordic countries. We examined the profitability in model enterprises with either grazing steers or indoor bulls. Within the two genders (steer and bull), there were animals of two breed types (pure dairy breed and dairy x beef crossbreed), which were divided into an intensive or extensive production system. The intensive steer system had one summer on grass and slaughter at 21 months of age whereas the extensive steer system had two summers on grass and slaughter at 28 months of age. All bulls were reared indoors and slaughtered at 15 or 18 months of age. The profitability was calculated as contribution margin (CM; sigma revenues - sigma variable costs) in three different herd sizes (50, 100 and 150 slaughtered animals per year) and in three different regions in Sweden (the southern forest districts Gsk, the southern plain districts Gns, and the lower parts of the northern Nn). In the basic calculation, CM for all steers in large herds with 150 slaughtered animals per year was above zero for all cases in Gns, and for one case in Nn and in Gsk respectively. However, all steer cases had lower CM than the comparable bull system in the basic calculation. Sensitivity analyses demonstrate several possible ways of increasing the competitiveness of the grazing steers, compared to the bulls. Utilization of buildings without opportunity cost resulted in a CM above zero for all cases. Increasing the proportion of semi-natural pastures rendering high agrienvironmental payment and support was another effective mean. Decreasing the winter feed cost and labour demand on pasture reduced the costs, whereas producing premium-price certified pasture beef increased the revenue, all measures further contributing to an improved profitability. Pasture-based beef production from dairy-born steers can be economically viable, especially in large herds and with extensive production systems. Thereby, we conclude this system to has a potential to graze large areas of semi-natural pastures and thereby conserve their biodiversity and cultural values.