Farming comes first over diversification projects

Over the past few years, James and Jackie Crosbie Dawson’s philosophy has been to stick to, and improve, the core business of farming.

“When we first started Management Matters in spring 2002, I said we had enough to do without taking our eye off the ball, and I see no reason to change my mind now.

I wanted to try to do what we were already doing better, and I think we are achieving that.”

That is not to say that non-farming income won’t ever figure in the accounts – indeed, it is likely to very soon, following recent approval by the planners to allow an old umbrella building at Southfields Farm to be converted into commercial units, probably for storage.

“There’s 6000sq ft of space, and at 3.50/sq ft it will provide a useful income,” says Mr Crosbie Dawson.

“But it is easily managed income, so it will not put the farming side of the business at risk.”

Some of the biggest challenges – and changes – over the past 40 months have been in the dairy herd.

When Farmers Weekly first visited, milk was sold to the Southern Co-op for 19p/standard litre.

ACC then bought the business, which was in turn acquired by Dairy Farmers of Britain.

Including volume bonuses, the milk price now stands at 19.3p/standard litre, though this is before the current 1p/litre capital retention.

However, Mr Crosbie Dawson is hopeful that some milk price increase might follow if DFB decides to restructure payments to reflect better the value of the various markets into which its milk goes.

His supplies end up in the London liquid market.

“We started Management Matters sitting pretty comfortably.

There have been all sorts of upheaval since then, but things appear to be settling down again now.”

He has recently become a council member of DFB, with both sides having put a lengthy dispute over contract terms for new members behind them.

Efforts to control costs on the dairy side of the business have paid off, notably on purchased feed.

The 12-month rolling average has fallen from over 4p/litre in spring 2002 to just under 3p/litre today.

Recalibration of feeders helped, as has careful use and purchase of straights.

The ongoing battle against mastitis also appears to be going well.

Mr Crosbie Dawson has hardened his culling policy and will also bed down the loose-housed cattle with fresh straw twice a day in a bid to prevent penalties.

“A recent MDC study in which we took part has proved really useful.

They produced a detailed report which has given some good guidelines on how to control environmental mastitis,” he says.

The calving pattern has also been brought forward, starting in July rather than September to provide a more level supply.

“We are aiming to get about an 85%/115% split on spring and autumn milk.

That’s what the buyers want, and we are not far from achieving it.”

However, while all these adjustments have helped support margins – MOPF now stands at 1151/cow (net of DFB capital retention), compared with 1123/cow three years ago – Mr Crosbie Dawson believes other costs outside his control will rise and erode profitability across all the farming business.

“Sprays, fertiliser and fuel bills are all going to increase.

We turned a reasonable profit in the past financial year, after two loss-making ones, partly by keeping a tight rein on costs, but it’s not going to be easy to keep that up.”

However, this season’s harvest will provide some respite.

Later harvested crops bore out the optimism following rape and winter barley results reported during our last visit.

“We had one of the best harvests ever here – we have had an extraordinarily benign year weather-wise.”

The 100ha (250 acres) of Prestige spring barley was an exception, struggling on lighter soils and averaging slightly over 5t/ha (2t/acre).

“At least it all tested within contract specifications, and will fetch 15-25/t over feed.

But we need an output of 200/acre from our crops net of the single farm payment to make it worthwhile growing them, and the spring barley won’t do that.”

The wheat, however, will, with better yields helping to offset disappointing prices.

The crop averaged over 8.6t/ha (3.5t/acre) across 186ha (460 acres), well above the 8t/ha forecast.

All the Soissons has been sold for a 10/t premium over feed, at 74/t, and the Solstice for a “not very exciting” 72/t.

“I had a figure of 75/t in mind, but I suppose the extra yield will help,” says Mr Crosbie Dawson.

“The annoying thing is, I could have locked in the entire crop at 70/t in May, when I sold 500t.

“I really believe you should sell two-thirds of the crop when you hit your budgeted figure, and play with the other third.

I got this the wrong way round this year.”

Robigus will make feed grade only, as it was the last to be combined and Hagbergs suffered.

Trading in the old New Holland combine for a younger TX68 paid off, saving 65 hours of harvesting time.

That time saving, coupled with ideal conditions for cultivations, means the bulk of the drilling should be finished by the end of September.

Short-term at least, the farm looks well set up for the coming season.

The outlook further ahead is less certain.

“I’m mildly bullish, certainly as regards cereal prices.

There is a real window for biofuels – if it doesn’t happen here, Europe will respond, which will help soak up some grain.”

Milk prices are a different matter.

“In the medium term at least, I think we have little option but to shape our businesses so we can make some profit at current levels.”

Mr Crosbie Dawson is also unsure of sheep prospects.

“But at least livestock enterprises could benefit from extensification on cheap grass-keep rents.”

He also expects to co-operate more closely with neighbours.

“If we all want to keep farming, then we will have to explore more opportunities like this.

“And we will continue to rent, or even purchase, land as it becomes available.

And we will exploit any planning use that we can get for the land – there is the prospect of another mobile phone mast, and, perhaps in the long term, development on a 40-acre block of land.”

But the partners won’t be banking on it.

The process of continued improvement, rather than radical change, will continue at Freefolk, for the time being at least.

“None of my children show any inclination to farm practically, but they may want to get involved in some capacity later on.

I’ve got at least another 10 years of active farming.

Then perhaps we’ll see,” says Mr Crosbie Dawson.