3 July 1998

THREE-POINT PLAN AIMS TO BUCK LOW PROFITS TREND

A strategy to increase

profits on a Midlands farm

that does not grow grass

well will help it produce a

good profit in 1998/99,

when most milk producers

will have a tough year.

Jessica Buss reports

SAVING on feed costs, better genetics and selling milk on a liquid contract has allowed one Derbyshire dairy farm budget for a profit of 6.5p/litre for the next year.

Cow yields at John and Geoff Goodwins Longlands Farm, Linton, Swadlincote, increased from 6200 to 8000 litres from March 96 to March 98, due to improved genetics and feeding.

Next years budget for the herd shows a yield of 8500 litres a cow, achievable because in March 98 almost half the 130 milking cow herd was heifers, with 58 entering the herd to increase numbers from 105 to 130 cows.

Over the last two years margin over purchased feed a cow has increased by £300 before quota, at the same feed cost a litre and with little increase in fixed costs a cow, explains the Goodwins ADAS consultant David Levick.

"Before Mr Levick became involved with the business, cows averaged about 6000 litres on a high forage input system that was not pushing cows. But we wanted to increase both our interest in the cows and cow performance," says Mr Goodwin.

Cows had the genetic potential to produce higher yields with the genetics that were coming through in youngstock, says Mr Levick. The farm is drought prone and mostly IACS eligible, and it was possible to reduce the forage acreage without increasing the cost of feeding cows, because cheap feeds are available in the area.

It made sense to use these cheap feeds to pursue maximum output and the aim is to reach 10,000 litres a cow in the year 2000.

Increasing yield and cow numbers was possible without increasing overhead costs for labour, machinery or finance costs – allowing the farm to continue supporting three households. Labour is provided by John, Geoff and a weekend relief milker.

They invested in a new 134-cubicle house five years ago and the milking parlour was updated three years ago.

The farm only has two tractors, a feed wagon, and a telescopic loader. It also has a slurry and muck spreader which have little value.

Silage has been made by contractors for two years. It was uneconomic to replace the old forage harvester once it had worn out, adds Mr Goodwin.

Increasing yield to March 98 was achieved without increasing the feed rate/litre – which remains at 0.34kg/litre – by producing more from forage, says Mr Levick. During the last three years the acreage used for cows has also decreased, with cereals increasing from 14ha (35 acres) to 29ha (72 acres) despite an increase in cow numbers.

John Goodwin adds that the increase in cereal acreage was helped by the sale of their 150-ewe sheep flock three years ago to give more time for cows.

"The farm grows a good grass crop up until first cut, but is then prone to drought which makes grass silage expensive," adds Mr Levick. It makes sense, therefore, to buy in feeds that work out to be considerably cheaper than home-grown conserved forage and grow more wheat and barley for sale. Home-grown forage is still important, with grass providing over half the feed for cows.

"Home-grown grain is too expensive, even at £65/t, to feed to cows. Once its rolled or caustic treated the cost is nearer £80/t. Bread, which has a higher feed value than wheat, costs less at £45-48/t and is readily available," says Mr Levick.

In this years budget, average concentrate cost is £85/t. Mr Levick explains that the concentrate will include Brewers grains and rapemeal currently at £78/t spot price, some soya which has fallen in price, and the bread. In total the Goodwins will save 1.5p a litre on last years feed costs. Feed rate should also drop to 0.31kg/litre this year because there will be fewer heifers in the herd.

The Goodwins have also secured a higher than average milk price for the year and which allows savings in quota, which will be worth about 3p a litre.

"Selling milk on a fixed price liquid contract to the Central Midland Co-op will keep milk price up. The price is fixed to December 1998, and will only fall during that time if the intervention price falls," says Mr Goodwin. But even if this forces the price to fall, average for the year should be 21p a litre.

A further saving, made through selling milk on a liquid contract is that milk is produced at 3.7% fat with no effect on milk price. This will save 0.75p a litre in quota costs this year, compared with milk sales at 4.1% fat two years ago. &#42

making a profit

&#8226 Overheads increased little by higher yields.

&#8226 Feed costs decreased.

&#8226 Producing low fat milk on a liquid contract saves quota.

LONGLANDS FARM

&#8226 Owned 80ha (200 acres).

&#8226 Rented 20ha (50 acres).

&#8226 29ha (72 acres) of cereals.

&#8226 13ha (33 acres) of forage maize.

Longlands Farm, rolling cow performance to end of March

1996 1998 1999

(budget)

Cows 111 127 130

Yield

(litres a cow) 6,226 8,000 8,500

Milk price

(p/litre) 23.09 22.88 21.0

Conc £/t 131 121 85

Margin over purchased feed

£/cow 1,169 1,463 1,561

p/litre 18.77 18.44 18.37

David Levick (centre) says it made sense for John (right) and Geoff Goodwin to pursue maximum output a cow, and use cheap feeds available in the area.