COMMENT: In my role as a farm consultant I am fortunate to work with lots of dairy farmers who have significantly expanded their herds and farming businesses over the past decade. For some this has proven to be a very profitable and rewarding experience. Yet there are many others for whom cashflow is a constant battle and farm profit is significantly lower than either they or their bank had expected.
In my view, most of the latter group expanded before they were ready. In some cases, financial management was not up to scratch or farm infrastructure had not been developed quickly enough. Others struggle with grassland management. However, my observation is that a large part of the profit variation in expanded herds is due to herd quality.
To minimise disease risk, existing dairy farmers are encouraged to stock their expanded herd via rearing surplus heifers. However, expanding a mediocre herd of cows, delivering average or below average profits per cow or per hectare to become a bigger herd of mediocre cows delivering even poorer profits makes no sense.
For many farmers, a few years of aggressive culling in combination with highly focused breeding would be prudent before deciding to milk any extra cows. Therefore postpone expansion plans if not ready.
All the talk is of 2015. As I understand it, quotas will still be gone in 2016, 2018, 2020 and so on.
Such a policy must be driven by milk recording and fertility data. Cow selection is as important as bull selection. Farmers spend hours both pouring over bull catalogues and talking to semen sales, yet seem to invest very little time selecting the mothers of their future heifers.
If considering expansion post 2015, you must have total clarity about the type of cow you want in your herd 10 years from now. What weight will she be? How fertile must she be? How efficient must she be at converting cheap feed into kgs of milk solids?
In a quota-free environment, most of the milk produced in Ireland will be paid for using the A + B – C model. In other words, a high premium will be paid for protein and fat content with a transport penalty attaching to the volume/water content.
Do current breeding and culling decisions reflect this? How efficient are our cows at providing the product that the processors require?
Are they producing 80 per cent plus of their liveweight in milk solids (combined kgs of fat and protein). To answer this all farmers should know the liveweight of their cows. Not many do.
These questions are of course equally relevant for new entrants to dairy farming. They must invest lots of time on appropriate due diligence to ensure that they buy top quality stock and not somebody else’s rejects. This might be difficult to achieve prior to 2015 as most farmers will be keeping their very best animals to stock their own expansion plans.
By Brian Costello
Brian Costello has expanded his own dairy farm near Boyle, Co Roscommon from 80 to 200 cows. He also works part-time as a dairy consultant/discussion group facilitator, specialising in dairy expansion. Brian can be contacted via e mail on [email protected] or on Twitter @BrianCostello_
Related:
Dairy expansion, auto-pilot vs hands-on
Efficient contract rearing key to dairy expansion
