Coping with a 50% fall in milk income is taking some swallowing for one Cumbrian
Jersey producer, who is considering giving up rearing replacements to reduce costs.
Jeremy Hunt reports
WHEN Norman Hughes ousted his black-and-white milkers and replaced them with a herd of Jerseys 13 years ago, he raised a few eyebrows locally.
Economical production of premium-priced Channel Island milk was one of the reasons for the changeover. But as milk prices have fallen, Mr Hughes, like many other Jersey and Guernsey producers, has coped with a massive shortfall in income.
In January this year he was being paid 22p/litre – an improvement of 3.5p from the low-point of last August. But that low point figure of 18.5p a litre for the milk leaving his Seaville Farm, Silloth, represents a 50% cut in milk income compared with the mid-1990s.
"Just before the demise of Milk Marque we had been getting 36p a litre. Losing half your milk income takes a heavy toll on a family farm," says Mr Hughes. He runs the 140-cow herd with his wife, Kathleen and son, Colin.
"The price has now come down so far that it is going to be difficult to get it back up to a reasonable level," believes Mr Hughes who thinks 30p a litre would be a fair price for his Jersey milk today.
"Not only have milk incomes been slashed, but we now face a £12/t increase in fertiliser and concentrates are up £10-£12/t. Any price rise in milk over the last year has been absorbed by increasing production costs."
He is currently one of 33 north-country Jersey herd owners selling on contract to Yorks-based Longley Farm Dairy. The company manufactures a range of products from Channel Island milk.
Re-investment at Seaville Farm is at a standstill and although Mr Hughes is pressing for a milk price increase, he feels more drastic measures may be needed to improve the farms cashflow.
During the 13 years he has been milking Jerseys, a broad spread of genetics has been used in the herd to balance type, production and milk quality.
American bulls are currently proving successful and are being used on cows combing both Danish and Canadian bloodlines. To go solely down the Danish route would undoubtedly lift the fat level to well over 6%, but yield would be sacrificed.
Some herds selling to Longley Farm Dairy are achieving a top bonus payment for high fat and earning 30p a litre for their milk, but Mr Hughes is reluctant to aim for such high fat percentage which he knows would reduce milk yield. The current herd average is 6101kg at 5.4% fat and 3.8% protein.
Having decided take the middle ground on genetics, Mr Hughes most promising area for freeing up some cash is youngstock rearing. A breakdown of replacement heifer rearing costs suggests substantial savings could be made.
"We no longer employ any labour, so I dont want to consider expanding the herd to 200 cows. But if the milk price cant give us the income we need, we will look at making savings on youngstock rearing," he says.
"We could save £50,000 a year by switching to buying-in calved heifers instead of rearing our own. Its a big decision but its one way of reducing inputs when we cant increase income from output."
He bases his calculations on an average figure of £600/head for rearing heifers to two-years-old. There are 80 heifer replacements on the farm.
"It costs about £100 to get a heifer calf on the ground and thats even before its had a drop of milk. Or, it costs £43 for every bull calf that you shoot. Thats a hell of a way to make a living," says Mr Hughes.
The benefits from not rearing our own heifers would be felt even more during the initial two years because we wouldnt be buying in during that time. He reckons the herd could manage by buying in around 40 replacements a year.
"And with the advent of sexed semen we could soon make the switch back if we decided to at a later date."
Running a flying herd is not Mr Hughes idea of the best way to manage a herd of cows. "But we have to get our priorities right. We are here to make a living. Its the milk price thats clobbered our margins not the feed. "
Feeding costs are important, but its worth offering cows a good diet, he believes. Last winter a shortage of the big-bale silage, which is the basis of cow diets, led to a sharp increase in concentrate feeding. But the impact on yield has led to the higher concentrate levels being maintained this winter to off-set another forage shortfall.
Total concentrate input is almost 3t a cow. "Last winter we pushed more feed in and July calvers gave an extra 15%. Milk has increased again this winter and is up by about one litre a cow a day."
Milkers are currently being fed a flat-rate of 3.6kg a day through the parlour and fed 7.2kg of maize gluten pellets a head on top of silage. *
• Income slashed.
• May stop rearing heifers.
• Higher price needed.