Farm Ireland

Thursday 18 January 2018

Hard logic at heart of farm's success

Darragh McCullough

Darragh McCullough

The O'Donovans operate a low-input system with 91pc of the diet being from grazed grass and milk delivered per cow averaging 4,024l in 2011.

However, milk output is being severely constrained on the farm at the moment due to quota restrictions, with the cows milked once-a-day for the first 5-6 weeks after calving in the spring. Cows were also dried off early last year at 240 days. In addition, the O'Donovans are delaying their reseeding programme until shortly before quotas cease in 2015. "There's not much point in growing extra grass that we can't utilise."

Instead, the O'Donovans have concentrated on installing key elements of infrastructure that increase the efficiency of their operation. "We spent €38,000 on an underpass and another €12,000 on a bridge," said Damien.

In both cases, the O'Donovans searched long and hard for the cheapest option before they committed money. "In the case of the bridge, we looked at importing old army bridges and other second-hand bridges but we ended up welding together the floors of three reclaimed trailer containers and propping the whole lot up on two sections of precast concrete tunnels that had been left over from a big construction job somewhere else.

"The underpass itself only cost about €22,000, the extra cost came from the €14,000 charge from the county council for lifting up the mains water pipes and the €4,000 charge from Eircom for moving a fibre-optic cable," he said.

But the O'Donovans have no regrets about the €50,000 that they spent on this infrastructure since it allowed access to an extra 160ac of grazing for the milking herd on one of their farms. For this reason, they estimate that the investment was paid back within two years.

The financial performance on the farms is excellent, with average margins of 12c/l for the last three years, including 2009 when milk price was on the floor. One of the costs highlighted by Derry was the vet bill. "We've halved our veterinary costs per litre since 2003 mainly because we've got on top of BVD during that time. But over this period, we've moved from being reactive to preventative, so much so that very little of our vet bill is now accounted for by vet visits. Instead, it's mostly for vaccination purchases," he said.

In contrast to some of the advice coming from dairy advisors in relation to optimising low-input dairy systems, the O'Donovans own all their own silage harvesting equipment and carry out the work themselves. "We just like machinery and the control it gives us over getting work done at very specific times," said Damien.

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However, the O'Donovans are still careful about what exactly they spend their money on in relation to machinery. When the mowing bed went on their mower last year, they were faced with the prospect of paying €25,000 for a new mower. However, since the rest of the mower was still sound, they opted instead to replace the mower bed for just €6,000. The same hard logic applies to their decision to go with a pick-up wagon costing €75,000 instead of the more conventional trailed or self-propelled harvester option. "We had both self-propelled and trailed outfits for many years," said Damien. "The advantage of the wagon for us is that it allows the operation to be carried out by just the three of us and reduces our reliance on outside help using our machines. It also allows us to keep our staff busy throughout the year."

However, the O'Donovans acknowledge that as their business grows it is more important for them to work on the big picture elements such as budgets and cashflow instead of 'in' the business doing day-to-day tasks. This may, in turn, force the family to become more reliant on contractors to get routine machinery work done.

Indo Farming