Management Matters: Organic switch was the right move
Converting to organic production at a time of recession and tighter consumer spending may be unfortunate timing, but Clinton Farms manager George Perrott (puctured) is confident it was still the right move for the business.
The 2500-acre dairy, sheep and arable farm completed the conversion period last week (15 February) and the whole farm is now certified as fully organic. Despite the money and time invested in the conversion, Mr Perrott acknowledges it was a tough commercial decision to press ahead – not least after milk buyer Dairy Crest slashed its organic milk price by 4p/litre last November (Business, 28 November).
The 4p cut has now worked out to be about 2.7p, while the conventional price has fallen 1.75p/litre, so it’s certainly not a total disaster,” he says. “Milk yields were over 8000 litres a cow and are now nearer 7000 litres – mainly due to the loss of maize in the ration – but we hope to get back to somewhere near where we were as we get to learn what works and what doesn’t.”
One of the biggest concerns for the farm’s two 250-cow organic dairy herds is the high cost of protein, he says. Organic soya costs around £580/t while conventional is nearer £250/t. “As a rule of thumb, everything costs about double in the organic system. But with the 3p/litre conversion subsidy, we were getting 29-30p/litre for the milk, and without it 26-27p/litre, so there’s no reason to quit. So long as the figures make sense, we’ll stick with it.”
Added to the premium prices, the farm’s mix of cropping and livestock, plus light sandy soils and relatively mild climate make it ideally suited to an organic system, says Mr Perrott. “We feed as much of our own cereals as possible and can generally get the cows out to grass for a lot of the year.”
The relatively large arable area and extended grazing season also mean the revised Nitrate Vulnerable Zone regulations announced recently pose less of a challenge than on other dairy farms. “We’ve always been in an NVZ, so there’s not a lot that’s new for us,” says Mr Perrott. “However we will need more slurry storage.”
One of the two dairy units has storage capacity for six to eight weeks, while the other has around three to four weeks’ worth. A consultant is due to visit at the end of February to assess exact requirements, storage options and cost.
“Our plan is to strategically place tanks around the farm to let us spread exactly when and where required. We’re also looking into anaerobic digestion. There’s already a network of old pipes used for dirty water, which will let us pump slurry around – whether that’s to the tanks for umbilical spreading or to an AD plant.”
Indeed, slurry is a key input for the organic arable land and has saved Mr Perrott buying around 350t of artificial fertiliser this year. “At £300/t, that means we’re saving £105,000. We also spent around £50,000 on grassland and arable sprays, whereas now the only real weed control is a couple of passes with the scratch harrow at £3-4/acre.”
Ploughing and other cultivations now account for the biggest single arable cost. About half of the total arable area is spring sown and Mr Perrott says drilling will start slightly later than last year. “We’ve found that by drilling too early, the soils haven’t warmed up enough and some weeds can get established before the crop. If we wait until later in March, hopefully we can get on top of the weeds and let the crop get away first. “With two big ploughs (one six-furrow and one five-furrow) and a 4m drill, we’ve got enough capacity to plough and drill 50 acres a day, so it shouldn’t be a problem.”
Mr Perrott has budgeted for wheat yields to drop from 3t/acre under conventional production to nearer 1.5t/acre in the fully organic system. “But if we’re getting double the price for organic wheat and have very low input costs, it still makes sense. We can afford to drop a bit in yield so long as we’re not building up problems for the future.”
Soil erosion remains a major threat on the undulating, light sandy soil, particularly via wheelings after drilling. He acknowledges that moving from mainly minimum-tillage conventional establishment to a plough-based organic system can increase soil loss, but says simple measures reduce the risk. “We try to make sure drilling is the last pass we make while the ground’s vulnerable and also do a lot of subsoiling to make sure there are no pans underneath.”
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| One of the biggest concerns for the farm’s two 250-cow organic dairy herds is the high cost of protein, says Mr Perrott |
The majority of conventional and organic lambs will be sold into Southern Counties at Sherborne. Average (conventional) prices for 19-20kg lambs are £45 a head, but the organic premium should add around £10, he says. “We’ll look at other potential markets, and see how demand goes, but 200-odd organic lambs is a lot for any buyer to take in one go.”
One of the biggest concerns before converting the sheep enterprise to fully organic was the potential for worm problems, but Mr Perrott says this has not materialised. “That’s partly because we’ve got sufficient new leys to make sure we’re not putting sheep onto wormy pasture. It’s the same with the heifers, and I reckon we’ve saved about £1500-2000 on wormers.”
Looking ahead, Mr Perrott says 2009 will be a year of consolidation and fine tuning the organic system, especially after around a third of a million was invested in a new parlour, silage pits, cubicle shed and youngstock buildings last year. “We know there’s capacity to expand the dairy system further, but we need a bit of time to get the most out of what we’ve already done.”