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Friday 9 December 2016

Make time to check expenses and grass management

Dr Mary Kinston

Published 15/03/2011 | 05:00

The weather has allowed for excellent grazing conditions until recently and grass is starting to grow. But none of this is the main topic for my discussion groups. Instead it is all about milk quota!

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It's a pity that we aren't just free to dairy farm, focusing on the fundamentals of the biological system that we run rather than how the potential impact of quota needs to be factored into the business until 2015.

Ultimately, it is what it is and it needs to be considered and dealt with appropriately. However, it also surprises me that given these talks about quota and constraints on business size and turnover, how little attention has been focused on the one element that each farmer has control over on a personal level. I refer, of course, to farm working expenses and cost control.

It's only been two years since we were calving cows into a market that was returning only 20c/l, which had serious effects on cashflow right up until end of last year for some.

The mantras of cash being king, price volatility in the commodity market, and capitalising on the good times to build a buffer fund for a downturn, have almost been forgotten. I can already see the hypothetical belt slackening now that the co-ops are committed to 33c/l.

But think about how often you've heard that Ireland's competitive advantage is that we are a "relatively low-cost milk producer". To qualify as a low cost operator, you need to be retaining at least 45pc of your turnover after farm working expenses and a wage for management. This shouldn't include your SFP either, so you can see that the bar is set quite high. So low-cost doesn't just happen because of where Ireland is located geographically. It also requires a series of well-thoughtout decisions.

Feed

So given these statements, if I was reviewing your spring farm management, taking into account your average pasture cover, demand for pasture and the level of supplementary feeding, forthcoming pasture growth and percentage of the farm milking platform grazed, would I be challenging you about the level of supplementary feed you were offering the cows at present or not? Do you even know the answers to these questions?

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My focus is not on starving or stripping condition off freshly calved cows; it's on determining whether the level of brought-in feed you are giving your cows is actually needed. This year is not the same grass growing year as last year. Grass is growing and for many it is growing very well, so the closer we get to April the greater the risk that whatever you spend on expensive feed will actually cost you money. This is especially the case where the slurry and fertiliser you've applied brings you into a grass surplus and loss of grass quality.

Making the switch in your mind as a farmer from grass deficit management to surplus management at the appropriate stage is hard and often missed if you are not on the ball.

You may throw at me a series of excuses like "the meals are providing the cow with magnesium and minerals" or "the cows need meal to aid mating and cow condition score" or even the classic "experience tells me I need it".

However, no two years are the same and not reviewing your situation is like digging a hole and shoving your head in it. You may feel like it at times but the horizon is very hard to see from that position.

The other scary fact is whether the ration/dairy nut you are buying is any better or, dare I say it, potentially worse than the grass you are grazing.

Quotes

I had a buying group looking around for quotes about a month ago that were quoted €230/t for a ration with 16pc crude protein. Initially, it seems very fair but here's the scary bit. It had an energy content of 10.8MJ ME/kg DM. I'm not suggesting that all rations have an energy content this low, which in this instance isn't much better than silage, but we often don't ask, so how do we even know? It certainly makes you stand up and think when well-managed, immature spring grass often measures 11.8-12MJ ME/kg DM.

Therefore, action is required on farm, considering these points:

  • Review your average farm cover each week against your feed budget and spring rotation plan. If covers are lower than 400kg DM/ha, feed a suitable level of supplement and slow grazing down. If they are high, increase your feed demand by reducing supplement or get more stock grazing, such as dry cows.
  • When buying dairy ration, consider energy as well as protein to get value for money.
  • Get your cashflow budget up to date with actual figures. If you haven't a budget, set your cost targets and don't delay this. By June, most of the damage will already have been done.

Dr Mary Kinston is a dairy consultant based in Kerry.

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