16 November 2001

Demands high, so is it time to sell dairy herd?

As demand for dairy herds

builds, has the time come to

sell the cows at Sand Farm?

The Haileys are still mulling

over the pros and cons, as

John Burns discovers

ABOUT the time of our last report from Stuart and Sue Haileys Sand Farm, Sidbury, Devon, the agent offering their downcalving heifers for sale dropped a bombshell.

A potential customer had shown interest in buying a complete herd. Would the Haileys sell theirs?

Although ongoing work with a consultant under the Farm Business Advice Scheme had led to precautionary provisional booking of an October 2002 date for a herd dispersal sale, the reality of the final decision has been avoided.

Being autumn-calving the herd is just approaching its peak earning capacity, so why sell it now? But that argument would apply equally in a years time. Would prices for cows be better or worse next year? Would there be much profit to be made in the coming year? What price must the herd make to justify forfeiting that profit? Could the overdraft take the strain of carrying on milking? Could the owners take the strain? What about the staff – a serious consideration in Mr Haileys eyes? How would the business look with the mortgage paid off?

Eventually they decided to test the market by offering the herd for sale through dairy cattle broker BACA, as well as Stags, a local auctioneer. Last week BACA phoned with the good news that demand for complete herds was suddenly taking off as more counties were freed of foot-and-mouth restrictions.

So far, Mr Hailey has had four enquiries, two from Cumbria and one from Devon through BACA, and another local one through Stags. "But no one has discussed prices. It is still early days," says Mr Hailey.

He hates to hear farmers moaning, so is reluctant to focus on activities or events over the past six weeks that might give the impression he is always complaining.

But the reality is that a record of activities on Sand Farm, Sidbury, and nearby Mincombe Posts, which he share-farms with its owner, will return time and again to the adverse impact of movement restrictions and especially the 21-day standstill rule.

It is not just the extra hassle and complications, it is also the very real pressure on cash flow (and, therefore, the overdraft) when sales of animals are delayed.

Last week Sand Farm was once again "on standstill", this time because store cattle were brought home from off-lying land to comply with Countryside Stewardship grazing rules. Even if Sand was able to move stock, the six beef-cross heifer calves sold to another farm could not be accepted by the buyer because he was desperate to deliver some cows he had sold, as soon as the licence came through.

If he had accepted the calves he would have had to keep the cows another three weeks. So the calves remain at Sand drinking organic whole milk, along with 25 heifer calves being reared as herd replacements and other groups being held until economic batches can be assembled for transport.

"The good news is the cows have been milking quite well and the organic milk the calves are drinking would have been sold at conventional price because of the imbalance between supply and demand in the organic milk market", he says.

"We also managed to sell 19 calves on Oct 10, seven to an abattoir for killing at £9 each and 12 through Wessex Quality Meat co-op which works with Quality Calves co-op." Nine were beef-cross bulls and three were dairy-bred bulls (MRI and Friesian). Overall average was £83 a head after costs.

In normal circumstances the sheep from Mincombe could be moved to Sand to deal with surplus grass in wet conditions. But, once again, it is the standstill rules that effectively prevent such a move. It would mean no sales from Sand for three weeks.

So Mincombe continues to carry the sheep as well as extra cattle – 15 organic store cattle are waiting for a buyer, and another group of steers had to be kept because of the movement standstill earlier this year.

These have been housed and are doing well on top-quality silage. The first four are due to go for slaughter this week. They are being sold through the Organic Livestock Marketing Co-op for which Wessex QM acts locally.

Attempts to buy 20 units and lease another 20 units of suckler cow quota for Mincombe had mixed results. The good news was a deal struck to buy 20 units at £175. The bad news was the appearance of gazumping and the deal fell through at a late stage. Eventually 9.6 units were rescued at £175, and the rest had to be leased at £50. &#42

Stuart Hailey has decided to test the dairy herd market, and enquiries are starting to materialise for Sands Farm.

FARMFACTS

&#8226 Sand Farm, Sidbury, Devon, an 89ha (220-acre) organic dairy farm.

&#8226 A further 64ha (158 acres) at nearby Mincombe Posts farmed under an FBT.

&#8226 100 dairy cows plus 60 followers.

&#8226 180 ewes – mainly Mules, some Suffolk crosses. Beef suckler herd being established.

&#8226 Steep, red clay/greensand slopes at Sand Farm, rising up to flinty clay on plateau. Easier soils and flatter fields at Mincombe Posts.

&#8226 Mainly down to grass/clover leys; oats/peas and lucerne/grass mixes grown for silage, plus cereals for feed.

&#8226 Some areas in Countryside Stewardship Scheme.

&#8226 Three full-time staff.