Milking 570-580 Friesian cows, on two similar sized milking platforms, the dairy operation is supported by 52ha which provides the majority of winter and young stock grazing. Planned start of calving is July 15.
Production is expected to be 215,000 kg milksolids - 370 kgMS/cow and 1,340 kgMS/ha. Pasture eaten is about 18 tDM per ha (3 year average excluding 16-17 flood affected season). Imported supplements (PKE) of about 0.6t DM per ha (3% total feed eaten) are used strategically through the spring and autumn. 80% of the herd are wintered off the milking area, and return just prior to calving.
2018/19 Numbers at a glance
|Total kgMS||Cows Milked||Hectares (Effective)||Net Dairy Cash Income ($/kgMS)||Total Farm Working Expenses ($/kgMS)||Total Operating Expenses ($/kgMS)||Dairy Operating Profit ($/ha)|
2018-19 half-yearly update: December 2018
Six months into the season this farm has provided an update on how they are tracking, what, if any major challenges to their budgets they are facing and plans for managing any variances for the rest of the season.
Season to date 6-12-2018
Production to 30/11/2018 is 104,323 compared with 100,252 to the same period last year. Up 4% on last year. The target for the season is 215,000. To achieve this need to be 7% up.
2018 was another wet winter/spring! The wet conditions impacted utilisation again and while it was challenging at times the staff did a good job managing the cows and the wet conditions.
The production to date has been produced with no PKE fed so while it is a bit behind budget the direct costs of production to date have been less.
Income is down on budget largely due to the October Dividend that was not paid. Farm working expenses to date are a little under budget.
As at 7/12/2018 current daily production is ahead of last season by 13%. Cow condition score is better than this time last year.
Pasture cover and supplements on hand are better than budgeted and are up on the same time last year. The budget still has allocation for about 150 kg DM per cow of PKE which could be used in the autumn if needed.
Based on the above there is still a chance of making the 215,000 target production.
The budget has been revised to be in line with a milk price to May of $4.50 per kg MS plus capacity adjustment.
Plans to manage risks
Being low lying, the farm is less vulnerable to a dry summer than many others, so milk price movements are of more concern at this stage.
The challenge for the business for the rest of the season is to be able to produce close to the target milksolids of 215,000 while keeping the rest of the costs under control.
The original budget was based on about $0.50 per kg MS more than the current forecast so this will impact the bottom line by the end of May 2019. It is likely the Net Dairy Cash income will be down about 10%.
At this stage forecast farm working expenses should come close to the budgeted $2.52 per kg MS.
Having a lower cost structure means that the cash flow for the business is still strong even at a lower milk price. Focusing on debt repayment and maintaining good infrastructure in the past has helped to mitigate the impact of lower milk prices now.
Feed and Pasture
- Rain fall to the end of November is 685 mm which is above average.
- Coped with the wet winter/spring conditions by using 2 fences in front and 1 behind, using square breaks and more mobs with smaller numbers. Cows were stood off for 11 days compared with 2-3 days normally.
- Pasture growth for the season has been quite variable. June/July/August growth rates were behind 2017. Growth rates seldom exceeded demand, (60-70 kg DM/ha per day), all September, but in early October with warm sunny conditions growth rates were close to 100 kg DM/ha per day.
- With the recent rain and warm weather pasture growth is well above average and pasture cover is increasing.
- Supplements made to date are up slightly. 50 ha on the support blocks and 10 ha on the milking area. This is about 10-15 ha more than budgeted. Yields have been a bit higher as well so costs will be up slightly.
- The challenge now is to manage pasture quality. This is being done by increasing the stocking rate, (bringing r 2 year heifers home), dropping some out for silage and using a fence to reduce paddock sizes so that surplus is contained to smaller areas and grazing residuals for the herd can be maintained.
- No PKE has been purchased, (budget was for 95 t for the year).
- N use to date is 55 kg N/ha on the milking platform. This is on budget with a season total planned for 80 kg N/ha. This has been in the form of DAP, phaSedN or phasedN quickstart depending on the conditions at time of application.
Calving and reproduction
- The calving rate was slower than industry targets this spring - indicative of just how the 2017 floods and wet winter and spring affected the 17-18 seasons mating.
- Mid-point from PSC of July 15th was 21 days.
- Cows calved after 3 weeks was 53%, 6 weeks was 75% and 9 weeks was 92 %
- Submission rate, (SR), after 3 weeks was 83%. This compares with the 2017 post flood spring of 68% so is much improved.
Other points of interest
- Peak cows milked is 561, (15 cows down on budget or 2.6%). No PD was done last season, so there were more empties than expected.
- Milk Income is down as there was no October dividend received.
- Stock income up as there more cows culled early in spring. Stock purchase are down as had budgeted to buy bulls but decided to lease them instead.
- Breeding costs up as bulls leased instead of purchased.
- R & M Down on budget to date with work planned for next 6 months is likely to be slightly under or still on budget.
Bio-security & Environment
- Researched history and bio-security of the bull supplier.
- Scrubbing stations at both cowsheds.
- All boundaries are either fenced canals or roads so contact with neighbouring animals is not an issue.
- The farm has an ongoing tree planting programme in place and the plan is to plant 30 trees this year for shade and aesthetics.
- Based on the Farm Environment Plan on the DairyNZ website there is very little left to do on the farm. The short to medium term plan is to improve areas for standing off. Longer term is to roof these areas as cash flow allows.
- Labour consists of 2 herd managers (one for each farm). The farm owners do the relief milking and cover for busy periods.
- Operate a low input system, with imported feed and winter grazing approximately 6-8% of total feed used. In low payout years the owners are prepared to reduce the amount of imported supplement.
- Focus on maximising grass grown and maximising the utilisation of that grass. Achieving 1,500 kg DM/ha past grazing residuals is key to the overall pasture management plan. Pasture cover is monitored regularly, (with plate meter or eye assessment), and reviewed with owners fortnightly. Supplement use is based on pasture cover and growth rate information.
- Effort is made to minimise mud on the milking area. The farm is low lying and gets very wet in the winter.
- If very wet, mob sizes will be reduce and back fencing will be used.
- 500 (out of 600) cows are wintered off. Cows come home in 2 lots prior to calving.
- PKE is fed out in troughs on the race to avoid pasture damage.
- Weed control is high priority so that every bit of land is available for grass to grow.
- Planned start of calving is July 15 for both MA cows and R 2 heifers.
- AB is done for 5 weeks. No pre-mating heats are done but extra time and effort are put into the 5 weeks of AB. Four bulls per herd are used after AB and are rotated every 3-4 days, 2 on 2 off. 6 bulls are run with the heifers for 5 weeks and then 2 are returned for use with the milking herd after AB.
- Drying off decisions are made to ensure early winter cow condition and pasture cover targets are met. Key targets are body condition score 5 at the end of May and 2,400 pasture cover at the start of calving (July 15).
- Young stock are grazed off the milking area from weaning. Half the R 1 heifers are grazed externally for 4-5 months then move to the support block after the MA cows are calved.
Things to think about
- With the increase in the value of the fat component of milk solids produced what should the breeding policy be? Should more Kiwi cross and/or Jersey genetics be used?
- With the concerns about the animal welfare aspects of the bobby calf industry are there options for adding value to the calves born before they leave the farm? Wagyu beef, dairy beef?
Key success factors
- Always had a clear strategic plan and awareness of the importance of good governance.
- Have simple farm systems that are easily communicated and replicated.
- Have clear objectives and communicate that to staff. Give staff responsibility and expect them to operate unsupervised.
- Do farm administration on a daily bases so cash flow and budgets are always up to date.
- Monitor farm physical information frequently so can make decisions based on updated farm information.
- Network frequently and are always open to new ideas.
- Very industry aware.