Expect to lose efficiency when expanding herd

As the end of the year draws near for those who run a spring calving system, there comes a time when there is a chance to reflect on performance and to plan for the next 12 months.

To do this, obviously a process of evaluation needs to be in place. Many will start by assessing the annual accounts, as a focus on profitability is essential to any business. From this base, using a number of assumptions, the farmer can develop a budget which fits in line with his plan for the farming system next year.

Given the talk from the industry in light of the Food Harvest 2020 Report, and the opportunity that exists for the Irish dairy sector, expansion of a low-cost (grass-based) system is at the forefront of discussion.

While each dairy farmer is having to weigh up his own position in terms of quota, many of those that have an opportunity for expansion -- in terms of the land base -- already have some steps in place that will ultimately result in a rise in milking cow numbers from next year onwards.

Obviously, expansion requires investment. On a farm, this investment is in stock and infrastructure. The cost of this investment is tangible, easily calculated, and the annual service cost of interest and principal on borrowed money can also be easily determined. From your budget for next year you then debate whether this cost of investment is affordable or whether your business is over exposed.

However, the risk in this whole process is that the assumption is based on efficiency. One of the major costs of expansion is the loss of farm efficiency.

While the impact of this expansion on efficiency can be assessed on many different levels and income streams, the most important is milk sales. So you need to pay attention to a few simple key performance indicators -- and one of them is kgMS/kgLW.

So, firstly you need to assess your present position. Most will have done a few quick calculations and determined the milk litres sold per cow. Many would hope to have achieved at least 5,500 litres a cow (1,200ga/cow).

You would then use this to base assumptions on next year's performance relative to cow numbers and make some account for whether this was a good or bad production year with reference to the weather, animal health impacts, number of calves reared on milk, etc.

Others would take it a step further and determine the total milk solids sold per cow (litres x 1.025 x [butterfat % + Protein %/100]). On lots of occasions it has been suggested that a farmer should target 400kgMS plus per cow.

However, are either 5,500l or 400kgMS/cow efficient? Without taking account of any more variables it is actually hard to say whether it is efficient or not, as a purebred Jersey can't be fairly compared to a purebred Holstein on these two parameters alone. So in terms of an efficiency measure per cow we can look at kgMS/kgLW.

Ideally, you should be producing between 80-85pc of mature cow liveweight on a spring calving, grass-based system, and a production of 80pc equal to 400kgMS/cow would relate to a cow with a mature liveweight of 500kg. For a system feeding in excess of 1t concentrate per cow, kgMS/kgLW should be closer to 100pc.

So my point on loss of efficiency can firstly come down to the fact that higher replacement rates, which are an inevitable result of herd expansion, result in reduced herd milk yields. This is because first, second and third-lactation animals are only capable of producing 75pc, 92pc and 97pc of that of a mature cow. This is illustrated in the table pictured. A farm expands over three years with a 30pc replacement rate, and then the herd stabilises over the next three years with a 20pc replacement rate. Obviously the percentage of each category is simulated and very farm dependent.

A replacement rate of 30pc in this example results in an average loss of over 200 litres a cow, or 16kgMS, and a fall of 3pc in kgMS/kgLW during the three-year expansion phase. This then takes a further three years to resolve once the replacement rate returns to normal health rate of 20pc.

Another fundamental point is that this also assumes that your fourth-plus lactation animals remain fully productive. However, what I also see in expansion situations is the retention of older cows which can be later calving, with reduced days in milk, have high SCC or lameness problems, which result in substantial losses in production.

So if you want to expand your herd, doing your budgets is essential, but plan with an expectation to lose a degree of efficiency in the process.

However, to minimise its impact do not expand with cows that tick the low production box (late calvers, high SCC, lame or poor milk recording results). Don't get caught out just chasing the number of cows milked.

Mary Kinston is a dairy consultant. Email: maryk@primefields.co.uk