Taking long-term view can help improve dairy margins

Dairy farmers are being encouraged to take a lifetime view when deciding how to improve margins and profit, visitors heard at a recent farm open day.

Decision making based on short-term measures only considering part of the system can obscure real opportunities for improvement, according to NWF Agriculture.

Speaking at a farm open day at Bawhill Farm, Adderley in Shropshire, where the company launched its new Profit for Life system, NWF’s Michael Phillips told an audience of over 100 that dairy farming is a complex, long-term biological process operated in a short-term economic environment.

“This makes decision making difficult and often leads to a reactive style of management rather than a proactive planned approach. Management changes in one area can have knock-on effects elsewhere, and this risk is increased if decisions are taken in response to short-term economic changes rather than taking a long-term view.

“This situation isn’t helped by a reliance on monitoring and management system which tend to take a short-term view with few having a timeframe of more than a year. Yet a heifer calf born today is going to be on the farm for around six years and what is important is that her total contribution to the business is maximised, and this can only be assessed by taking a lifetime view.”

Explaining the Profit for Life approach, Mr Phillips outlined the system uses a combination of farmer own information and national average cost data to calculate the average lifetime contribution per cow in the herd. This can then be used to model how performance can be improved across the lifetime of the animal.

“The minute a heifer calve is born you begin to invest in it. Once she calves she starts to repay that investment, so it is crucial to get them calved down as soon as possible.

“At some stage she will breakeven, having repaid all the investment in rearing and can now start to contribute to the business and will continue to do so until she is culled. Profit for Life clearly demonstrates how well cows perform and allows a discussion on how lifetime contribution can be improved.

“On average in the UK the breakeven point occurs at about 1.37 lactations, but as the average cow in the UK only completes 3.8 lactations it means she is only contributing for 2.4 lactations. In this time she will contribute around £1600.

“Recent work by DairyCo shows 15% of heifers fail to complete their first lactation and so represent a huge financial loss to the business. Furthermore 14% of heifer calves fail to even enter the herd. This represents a huge loss to the industry as does the significant proportion of cows that cull themselves. Only one in four cows is culled due to management reasons, with the rest selecting themselves due to a host of disease and related issues.

“Taking a lifetime views brings all these factors together and will allow farmers to plan ways to drive higher returns from their system.”

According to John Twigge, technical manager with Frank Wright Trouw Nutrition International, taking a more measured approach to calve and heifer rearing can have significant benefits.

He reminded delegates calving heifers at 24 months old requires 25% fewer youngstock than calving at 30 months. This releases capital and reduces the time needed to look after youngstock.

“It’s perfectly possible to get heifers to enter the herd at two years old and this reduces the investment per animals and gets then repaying the investment quicker, but they must be reared properly.

“How often are heifers given the poorer quality silage and rougher grazing? It is important to set growth rate targets and then to monitor performance, yet less than 10% of dairy farmers actually weigh or measure heifers to check they are on target. The consequence is small heifers which fail to compete in the herd and end up being culled or animals that calve down older. Either way these are losses that can be avoided.”

Mr Twigge advises calves need to weigh 100kg at 12 weeks old and then need to grow at an average of 0.8kg/day. Regular weighbanding, weighing or measurement of wither height can increase the proportion of heifers entering the herd at the target height and age.

Once the heifer has entered the herd her changes of making a significant contribution to the business will be increased by taking a team approach to management believes NWF technical manager Tom Hough.

“Keeping animals longer, keeping them healthy and producing as much as possible is a complex business so it pays to make full use of all the expertise that is available. It is amazing how many people can make a real contribution to cow performance, but how often is the vet, nutritionist, herdsman and everyone else involved in the herd together?

“For an average herd producing 1.5m litres, saving a penny a litre off costs would generate £15,000 to the bottom line. A team focused on a lifetime approach to management will probably be able to find ways to achieve larger savings than this,” Mr Hough commented.