Rising feed prices wipe out profit margins

Better returns from milking have been almost eclipsed by soaring feed and energy costs at Thornton Grange Farm, as Wendy Short reports

Falling UK milk production has led Peter Chapman’s milk buyer, Arla Foods, to lift its over-supply penalties for the rest of the year, making a welcome improvement to the farm’s bottom line.

The move should boost overall returns by 2-3%, as the herd expands to a target of 200 head by the end of 2008. But Mr Chapman is worried about the spiralling feed and electricity costs.

“The improvement in the milk price has been slow to reach the producer. And although my rolling average has gone up from 17.75p/litre to 17.83p/litre over the past three months, I am actually no better off,” he says.

“Concentrate feed prices have risen by £25/t, and a similar rise is expected again in October. My cows are already on a semi-TMR system, so it’s difficult to see how I can cut costs any further.”

Scottish Power

Meanwhile, the end of a three-year contract with Scottish Power this autumn will result in a 40% rise in the business’ electricity bill, unless Mr Chapman is lucky enough to find a similar deal.

“I am keen to sign up to a two- or three-year fixed price, because it keeps the business on a more stable footing,” he says. “In the longer term, I would like to investigate the possibility of installing a wind turbine and solar panels to provide energy, but I just haven’t got time to shop around at the moment.”

After many months, construction of Mr Chapman’s new parlour building, which he has project managed himself, is complete. The total investment has been about £40,000.

Now he is eagerly awaiting the arrival of contractors to provide and fit the milking equipment. He is hoping to be able to move out of the original parlour, which is more than 30 years old, by the end of September.

Cow serving periods

In an attempt to avoid the April spike in milk production and move towards a more level profile for the herd, Mr Chapman and his wife Jane have been looking at cow serving periods.

By avoiding the serving of any cows last month, they have created a four-week gap in calving next April. As well as avoiding a production peak, this should provide an opportunity to clean and disinfect the calf housing.

Mr Chapman, who carries out his own AI, has started using sexed semen to speed up the herd expansion process. Around 40 straws from bulls including Matisse, Fastnet and Obut have been purchased from Cogent. Luckily, the farm was able to take advantage of a special offer, which meant the straws cost no more than conventional semen.

Sexed semen

Previous experiments with sexed semen have brought varying degrees of success, with 11 heifers resulting from 20 cows on the first occasion, followed by extremely poor conception rates on the second attempt.

However this time, Mr Chapman has been delighted with progress so far. Out of 25 heifers served, the conception rate stands at 88%. Unfortunately, the Limousin stock bull died earlier this year. But instead of replacing him, Mr Chapman plans to use sexed semen on a number of second and third lactation cows.

Meanwhile, Mr Chapman is continuing to invest in the farm’s infrastructure as he moves towards a bigger herd. A contractor has been brought in to crush brick rubble on around 800m of farm track, following up with a levelling bar and vibrating roller to create a fine- grade, level finish. The cost for improving the track totalled around £900, but it should prove a worthwhile investment.

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