Two Cheshire farmers facing an uncertain future in dairying are now making money out of milk after pooling their resources – concentrating milk production on one farm and forage growing on another.
Ian Newton and Andy Shaw are now milking a mixed herd of 350 Holsteins and Jerseys at Higher Farm, Middlewich, and growing forage crops at Fingerpost Farm, Knutsford.
Although moving cows to one farm demanded a £250,000 investment in extra cubicles and a rotary parlour, this innovative restructuring of two businesses has enabled milk production costs to be cut to 15p/litre compared with a break-even situation before the merger.
That’s leaving a margin of about 5p.
The aim is to get cost a litre down to 12p.
Messrs Newton and Shaw previously farmed about eight miles apart.
They were good friends and Andy had worked for Ian during his student days at Reaseheath.
The partnership was set up almost three years ago when Ian was milking 175 Holsteins and Andy and his father Chris had reduced their 200-cow herd of Jerseys to about 60 head after developing part of the farm.
The Shaws own one farm and rent another while Ian’s family have owned Higher Farm for three generations.
Both partners were considering the viability of their businesses when they came up with the idea of joining forces by using one farm for cows and one for growing forage.
Both agree it’s the best thing they’ve ever done.
“We’ve benefited from economies of scale, we’re being paid more for our milk because we’ve now got a bigger litreage of high component milk thanks to the Jersey influence, and we work as a team.
“There’s always someone to discuss things with and we have management meetings every six weeks involving our consultants.
And last, but not least, we now have more free time,” says Mr Newton.
About 200 head of youngstock are now away wintered, but return to land at Middlewich for summering.
Plans to further increase the milking herd – up to 400 cows in the short term and eventually up to 500 – will require all youngstock to be reared on contract.
The percentage of Jerseys in the herd will remain at about 25%.
The partners, who say they aren’t ruling out taking on another member with resources to pool into the business, say the main aims were to lower production costs, increase profitability and have more free time.
“It took about a year to get everything sorted out, but legally it was straightforward and we opted for a partnership instead of a limited company,” says Mr Shaw.
The £250,000 investment has been spent on a new cubicle shed for 100 cows, modifications to existing buildings to create another 120 cubicles and the installation of a 44-point rotary parlour.
A full-time cowman is employed and milking takes two hours.
“From the start we saw a lift in our milk price by 2p/litre from 17p to 19p based on improved components and higher volume.
We’re now selling to cheese maker Joseph Heler, who is paying more for milk quality,” he adds.
There are 83ha (200 acres) of grass at Higher Farm, which could lead to high yielders managed on a winter diet in summer to relieve pressure on grazing.
The herd’s feed regime is based on a partial mixed ration including soya, beet pulp and distillers grains.
Land at Andy Shaw’s other farms supply all the forage – 125ha (300 acres) grass, 83ha (200 acres) maize and 25ha (60 acres) whole-crop – all of which has to be transported to Higher Farm.
“We have to haul grass from up to eight miles.
Some land is 10 miles away, but I wouldn’t want to be taking crops off land any further away than that.
Anyone thinking about this sort of set-up needs to consider the distances involved,” says Mr Newton.
They both agree their partnership is probably better than two brothers working together.
“We both have our own ideas and that’s good for the business.
But we’re always talking things through.”
With 260ha (625 acres) to farm and a system that’s working, the partners are confident about the next investment of another £100,000 in the business’s infrastructure as cow numbers increase.
“We have 83ha (200 acres) at Higher Farm and another 25ha (60 acres) a mile away to cater for dry cows, so we should be able to carry 400 cows on this unit.
And coping with that number of cows isn’t a burden because there are two of us sharing the responsibility as well as the cowman.
There may be twice as much work to do, but it doesn’t seem like that,” he explains.