Farm Ireland
Independent.ie

Friday 17 November 2017

Dynamic Donovans dwarfing tough targets of Harvest 2020

Darragh McCullough

Darragh McCullough

MORE THAN 400 farmers attended the Irish Grassland Association's dairy summer tour in West Cork last week to see how some of the country's top farmers are making exceptional profits.

The first farm to be visited on the day was that of Norman O'Donovan at Skibbereen. While the Food Harvest 2020 target of a 50pc increase in milk supplies over 10 years is considered ambitious by most, Norman, along with his father Derry and brother Damien, have proven that it is possible to go one step further and double output over the same period.

Derry and Anna O'Donovan started out milking 95 cows on 135ac in 1978. Despite the introduction of quotas in 1983, Derry had still managed to more than double the herd to 240 cows, and acres farmed to 283ac.

Over the course of the 1990s, cow numbers remained static but output continued to improve from the pedigree Holstein Friesian herd.

But from 2000 on, Derry, Norman and Damien began to crossbreed with Jersey cows and expand numbers again.

Since 2008, the O'Donovans have bought and leased an additional 400ac of land to bring their total land-base up to 1,000ac carrying more than 560 spring-calving cows and over 750 head of drystock. While Derry, Norman and Damien all continue to milk their herds on three separate farms, they operate the farms out of one bank account and discuss problems and plans daily. "I think we got a bit too comfortable [during the late 1990s and early 2000s] when we had no borrowings," Derry O'Donovan said.

"We were only keeping about 12pc of our sales in 2003 compared to almost 40pc today. I'm not advocating that everybody go out and borrow but I think there is no better discipline.

"It created a practical cost control for our business long before the profit monitor was ever invented, when we didn't have the borrowings and were focusing instead to keeping the tax bill low. Now we're quite happy to have a large tax bill."

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The O'Donovans work on the basis that the farm is comfortable servicing borrowings of up to €3,500/cow.

"Even during the bad year of 2009 we were able to pay down principal on borrowings," said the youngest son, Damien. For this reason, the O'Donovans see periods of low milk prices as opportunities to expand due to the deflated cost of extra stock and facilities at these times.

"A lot of people have great aims, but they're rarely willing to pull the trigger," commented Derry. "You need to be prepared and willing to take an opportunity when it presents itself."

It was this philosophy and the confidence that came from operating as a unit of three rather than one that accelerated the expansion of the herd over the last three years. "We weren't planning to take on so much extra land in such a short period of time," explains Damien. "But when the 200ac block became available in 2009, it was just too good an opportunity to pass by."

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