Top returns for brave organic converters
HIGH input and low input dairy farms can increase profits by converting to organic production, but the conversion grant is more important on high input farms.
Mark Rowlands, who managed his familys organic farm for 10 years and now runs his own consultancy business, said there were good returns for those brave enough to convert. He explained how two different farms would fare during and after conversion.
Before conversion, the low input farm practised extended grazing, had white clover in swards, fed 0.75t of concentrate, had a stocking rate of 1.8 cows a hectare (0.7/acre) and produced 6078 litres a cow.
This farm would increase profit by 200% with an organic price of 25p/litre and suffer least during conversion. During conversion its profits would fall from £57/ha (£23/acre) to a loss of £34/ha (£14/acre) before the £140/ha (£57/acre) grant. But after conversion profits would rise to £473/ha (£191/acre) with a 25p milk price.
A higher input farm producing 7820 litres with 2.15t of concentrate a cow at a stocking rate of 2.15/ha (0.87/acre) would have higher conversion costs. Before grant and quota leasing income of £465/ha (£188/acre), this would reduce to a loss of £453/ha (£183/acre) during conversion.
This farm would also continue to have higher costs, especially fixed costs after conversion, and he estimated its profits at £353/ha (£143/acre) with a price of 25p.
"Clearly this illustrates the impact of converting on different farms. The financial implications are greater on higher input farms, even when well managed, because of their different structures," he said.
Stocking rates had to reduce on both farms during conversion, but he expected that on the low input farm they would increase again.
Forage production at IGERs Trawsgoed research farm rose to 90% of that before conversion within five years. *
Returns are good for both low input and high input farms brave enough to convert, says Mark Rowlands.