With cost of production exceeding milk price by about 0.20p/kg, most US producers are increasing herd size. Rebecca Austin visited two Californian dairy farmers and saw how they were tackling the problem
FOR every kg of milk produced, it costs John Fiscalini 14.37p. But he only receives 14.20p/kg from his creamery, including a 0.75p/kg somatic cell quality bonus.
So, to stay in business he uses two tactics in tandem – increasing cow numbers and buying in more quota.
Two years ago he was milking 500 Holstein Friesians. Now numbers have doubled and, within the very near future, he aims to milk 1200 cows three times a day through his 18 x 36 herringbone parlour.
He will achieve this by calving heifers when they are 18-months-old and flushing the top 10% of his herd for embryo transfer.
Facilities are limited at the dairy, so Mr Fiscalini pushes the stock as quickly as possible. "That way it is cheaper to get them to milk and they take up less room when they are still youngstock."
Heifers are only served at 10 months if they have reached 341kg bodyweight. All the rest are bred at 12 months. He claims never to have performed a caesarian section on any of his heifers at calving. Post calving they weigh an average 500kg. Mr Fiscalini usually waits 45 days before serving the heifers again.
He buys semen twice a year – after the bull proofs have been released – and saves £9400 by block-buying semen within a local dairy group of four producers. Straws for first service cost an average £12.50, second service £10 and third service £6.25. If there is a need for a fourth service young sires are used. All AI and pregnancy diagnosis is performed by the herdsman. There is a 40% conception rate to first service.
Mr Fiscalini sees two or three embryos recovered at each flush and costs the whole technique at £188 to "get an embryo on the ground, which is nothing if you consider that the price difference be-tween a good and bad cow is £626."
To cope with this extra production he bought £0.6bn worth of quota three months ago at £341/kg of quota. It will take him 10 years to pay for the asset.
California is the only US state with a quota system. Unlike the UK, producers are paid less, rather than penalised, for milk produced beyond their quota limit. The states milk price averages 14p/kg, but this drops to 12p/kg for milk produced outside quota.
There is, however, talk that the quota system will be abandoned in the near future. "It is a very cumbersome, expensive system. I can see it being phased out over a period of years," says Mr Fiscalini. "If the state said tomorrow we are going to get rid of the quota system, those of us who have purchased, and not yet paid for it fully, would be in deep trouble. And because we have such a legalistic society there would be a number of lawyers who would just love to get their share of any law suit they could get into."