Negotiating the dairy expansion tightrope
Farming Independent's editor talks to Tipperary farmer Paddy O'Gorman about the labour issues and technical challenges involved in adding an extra 50 cows to the family's dairy herd
There is a major leap in workload required during the transition from 140 cows to the target of milking a 190 strong herd, as one Tipperary family can testify.
Former engineer Paddy O'Gorman returned to the family farm just outside Clonmel, Co Tipperary in 2009 after a stint abroad in Australia.
Fast forward six years and his expansion plan is in full flow, based on a blueprint for the 88ha farm drawn up with input with his father Michael.
With the extra cows naturally comes an extra workload but not always the income to pay for it during the growth phase, as Paddy and many other expanding dairy farmers around the country have found.
The five-year plan drawn up with the O'Gormans for the Teagasc Glanbia monitor farm has been described as ambitious, with €410,000 already spent on infrastructure - with the aim to go from 140 cows this year to 190 by 2017.
"I want to set up a system that is simple to manage, a very sustainable system that should tick over from year to year and there should be no hiccups," explained Paddy.
Yet, as the financial plan shows it will be 2017 - when there will be 190 cows on the milking platform - before he can set aside €40,000 for a full-time worker.
"We'd all maybe like it a bit sooner but that might be the most suitable time to make the leap," said Paddy.
"We have upped the labour over the years, I've two students this year and next year we have a budget of about €20,000 for extra labour," said Paddy, who is currently doing nearly all the milkings with help from a student and a good relief milker.
"The workload is increasing so it is coming under pressure. You do get caught in an area there, up to 100 or 120 cows you are fine with one man. Then when you get from 120 to 180 you are kind of in limbo, it is hard to pay a full-time man. So you have to take a leap," he said.
"I'd like to see myself in a situation where I'm doing half the milkings or so. That is the plan long-term. I want to grow more grass and produce more milk - there is a term that gets thrown around and I'll try to refrain from using it 'We'd better maximise the asset'.
"But we want to produce as much milk off of the milking platform as we can that is key. We've a good bit of investment put in over the last 12 to 18 months and there is a good bit to do and that all has to be paid for. There is only one thing that will pay for it, so milk will have to go through the pipes. That is the medium and long-term plan here."
In line with the expansion blueprint, there are 45 heifers and 45 calves for replacements planned for next year, with 60 calves and 48 one to two year old heifers currently on the farm.
The farm also carries cattle that bring in cash flow that is accounted for in the stock sales, along with the cull cows. However, the move will see the farm push towards a stocking rate of 2.7LU/ha, with current operations at 2.5LU/ha overall. jhe farm is operating off of a 60ha milking platform, with 85ha owned in total and three hectares rented.
The plan was put in place in the late 2000s when the farm was operating with 90 cows for an increase of 100 cows.
So far there has been €410,000 spent on putting the infrastructure in place to back up the herd expansion, with €300,000 spent on installing a 26-unit milking parlour and yard. A tank for a new shed came in at around €70,000, while the water system cost around €15,000 with around €25,000 spend on updating the roadway network neatly linking the milking platform.
There is another cubicle house to be built and that is going to cost around €100,000. "We have a good bit spent and we have to make it all work now," said Paddy.
Richard O'Brien, the co-ordinator for the Teagasc Glanbia monitor farm programme, said they took a milk price of 30c/l when they were drawing out the farm plans for 2015.
Paddy explained they were close to the figure, with fertiliser costs higher than expected with a lot of investment in the area and meal costs slightly lower than they budgeted for.
The cows yielded 340kg milk solids per cow last year, as the farm pulled back later in the year due to the milk quotas.
However, Richard explained this year the cows are yielding 392kg/MS per cow and they feel the genetic potential is there with the farm following EBI for this to meet their target of 432kg/MS per cow by 2018.
Last year the farm's profit monitors showed that milk price stood at 38.3c/l with sales of milk and cattle delivering a net profit/ha of €952 and a net cash flow of €1,765.
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