Farm Ireland

Thursday 23 November 2017

Milking 750 cows without an animal setting foot on an acre of owned land

Stock Photo
Stock Photo

Martin Ryan

An East Galway dairy farmer milking 750 cows, without an animal setting foot on a acre of owned land, has traditional style dairy farmers turning their heads in disbelief at the scale and operation of 21st century new dairy models.

Seamus Quigley and his wife, Monica, who inherited a 26ha farm and borrowed €70,000 to start farming is now milking 750 cows on three milking platforms in the Loughrea area and advising like minded young farmers to "Farm for fun and profit", but to remember "no profit no fun". 

"Currently we don't farm any owned land and we employ 100 per cent of the labour to operate the farms" the father of four told the 500 delegates at the Positive Farmers Conference at the Raddisson Blu Hotel, Cork outlining that detailed planning and careful budgeting are fundamental to large scale expansion in the dairy sector.

"Sometimes I get the impression that there is a 'herd' mentality with regards to expansion now that milk quotas have gone" he said coupled with a warning that "farmers are often ill prepared for the implications that come with expansion and setting up a second dairy unit" because they are not always clear on why they are expanding.

Having built from scratch a 500-cow herd that is now milked on the 500ac Ballydugan estate near Loughrea, Co Galway after taking out a 20-year lease in 1998 the enterprise has now been extended to milking 750 cows on three platforms.

But he warned that the progress did not come without some shocks along the way and none more so than in 1995, when a combination of factors, including a summer drought, plunged their operation in a serious cash deficit from which lessons had to be learned.

Seamus Quigley surveys one of the areas where water was trapped until he cut tracks with the mole plough
Seamus Quigley surveys one of the areas where water was trapped until he cut tracks with the mole plough

He advised that farming in such an environment requires prudent financial management, with budgeting and cash flow management vital and the importance of having a farm system that is simple, robust and sustainable an essential base.

The farms are based on high EBI cross bred spring calving cows, with good quality pasture, good grazing infrastructure to optimise grass use, the employment of good staff and the use of contractors for machinery tasks, and minimising capital expenditure on buildings and machinery.

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Annual cash flow budgeting, carried out at the beginning of the year is based on the actual for the previous year, adjusted for any expected changes  in the milk price together with cull and calf sales forward.

The budget is reviewed quarterly and action taken to adjust to meet the targets if necessary.

"When we started farming we were busy expanding and doing all of the farm tasks.  I thought keeping one eye on the current account was enough cash flow management.  However I learned a very valuable lesson in 1995.  We had upgraded our milking  shed and expanded to milk 130 cows, suffered a summer drought and resulted in a large cash deficit by the year end", he said.

"We had been too busy expanding and did not plan properly.  We had to stop, think and take action to get out of the mess I had created.  Costs were cut where possible, cow numbers were reduced to a  more sustainable level and their sales helped cash flow.  Extra calves were reared and sold to boost output.  This exercise stabilised our financial situation and highlighted the benefits of tight financial management", he added.

He said that price volatility "is a new reality for dairy farmers and one which farmers will have to face going forward" but it acts as a reminder to the whole dairy industry of the need for efficiency and prudent financial management.

His advise is to be proactive, act quickly with a realistic cash flow plan,  while delaying all capital expenditure, including reseeding of pasture, reducing P and K application and demanding good discounts on inputs, while availing of fixed milk price schemes.

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