Professionalism and attention to detail across the entire business is vital to ensure good technical performance and profitability on a year-round calving dairy unit.
This is according to Lloyd Holterman, one of the four partners managing Rosy Lane Dairy, Watertown, Wisconsin, where 1,075 Holsteins are milked.
The team at Rosy Lane opts for three-times-a-day milking as well as a double OV-synch programme, and do not feed a transition diet.
Speaking at the Bridge Hotel, Wetherby, last week (20 March) as part of AHDB Dairy’s spring meetings, Mr Holterman stressed that while these options were negotiable, there were several areas of management that were not.
These are the five things he believes are crucial to running a profitable dairy.
1. Employ great people
- Find the worker, then find work for them
- Don’t just hire farmers. You can teach townies your way of doing it and they don’t arrive with bad habits
- Recruit for the cow, calf or crop and feeding teams. This simplifies recruitment and focuses on certain attributes
- Promote from within. This gives people the aspiration to improve and keeps staff motivated
Tips/how it works at Rosy Lane
- Assign an experienced mentor to teach a new staff member
- Twice in the first week hold a meeting on key health and safety issues and to teach the new recruit about the business
- Allow time for them to do the job correctly and explain why you do it that way
- At Rosy Lane, standard operating procedures (SOPs) and tick lists for farm tasks – such as tractor driving and milking – are written in Spanish and English. SOPs are reviewed annually and updated as necessary
- Talented workers are trained to do other jobs in case of emergencies.
Rosy Lane Dairy farm facts
- 1,075 Holstein milking herd
- 950 cows milked three times a day in a double 12 parlour
- 20 full-time staff and four partners
- 13,757 litres a cow at 4% fat, 3.2% protein
- Growing maize and alfalfa on 720ha
- 1.7 services to conception
- 37% pregnancy rate
- 49% of diet is dry matter forage
2. Measure, measure and measure more
- Invest in technology to make efficiencies
- Know where you are to determine where you are going (see “Cost and performance”)
Tips/how it works at Rosy Lane
- Rosy Lane uses one programme in the milking parlour (AFI milk) and a herd management system based on rumination collars (Dairy Comp 305).
- The parlour system monitors cow production, milking speed, conductivity (mastitis) and activity (pedometer). A 25% saving on milking time was made by grouping cows according to milking speed.
- A self-loading, self-propelled mixer wagon was bought to cut, mix and feed the total mixed ration. It measures the weight of each ingredient, projects future feed use, and costs less than the four pieces of machinery it replaced, saving a total of £16,500/year.
3. Finance and record-keeping
- Grow the business incrementally
- Balance business growth, taxes and leverage
Tips/how it work at Rosy Lane
- Aim for >60% equity at all times
- Long-term interest rates are locked in – most at 4.4%
- Investments go ahead if land and buildings can be paid off in 10 years, cows and machinery in five years and operating loans in one year
- Sharpen your business acumen with classes in accountancy, seminars on business management (non-agricultural ones)
- Read financial publications every day (Financial Times, Forbes, Wall Street Journal)
- Benchmark against similar farms (at Rosy Lane they benchmark against Cornell University dairy peer group twice a year)
- Use financial consultants who use industry insights and real-world numbers
Cost and performance
- Labour cost 6.5p/litre
- Feed cost/litre 13p/litre
- Net herd replacement cost 0.015p/litre
- Cost per kg of dry matter 3.5p/kg
- Lactating feed cost £4.87 a cow a day
- Milk sold per employee 530,000 litres
- Feed conversion 1.67kg DM fed for every 1kg of milk produced
- Cut 2.1p/litre off vet cost (now at 1.1p/litre) over past 10 years, a saving of £147,900/year
4. Genetic excellence
- Focus on traits that will cut costs – for example, lameness and calving ease
- Breed for longevity as this allows you to move your cows up a group. There are four groups and four ways of leaving the farm, such as dead, forced cull, voluntary cull or sold as a milker.
- Breed on profitable traits, index and fertility, don’t worry about type
- Increase lifetime daily yield – the milk output divided by days from birth to culling
Tips/how it work at Rosy Lane
- Genomic test all heifers, sort by index and profitability
- At Rosy Lane, they test all 400-ish heifers annually and cull below $650 net merit
- Breed for a moderate foot angle and a slightly spread toe to prevent dirt becoming trapped in the hoof
- Use fertility scores and breed for fertile cows. Failure to get in-calf is the main reason for culling in the US.
5. Biosecurity and disease control
- Reduce vet costs by minimising problems and doing things in-house
- Have a close relationship with your vet
- Don’t underestimate the importance of keeping your farm clean
- Clean staff on entry to calf barn and do not let visitors in
- Disinfect all trucks and trailers
- Monitor bulk tank for Staph aureus and mycoplasma
- Deliveries to farmhouse office only
- Test animals coming in from high-health status herds for infectious disease
Calculating net herd replacement cost: the “silent thief”
Net herd replacement cost is based on the cost or value of raising a replacement heifer versus the value of a cull cow.
At Rosy Lane, it costs $1,800 (£1,364), so they can work out their net replacement cost with the following equation:
Number of animals leaving the herd (466) multiplied by the cost of raising a bulling heifer ($1,800), minus cow sales $838,800, divided by milk sold that year 323,661cwt = 0.88 cents/cwt or 0.015p/litre
Because rearing heifers is expensive and cows are most productive in their fourth lactations, it is a financial drain on the business to be running a high forced cull rate and needing heifers.
Rosy Lane manages 4.3 lactations on average, with a 20% cull rate, plus a 3% death rate.
At 20% replacement, the farm would average five lactations a cow.
A first-lactation animal that is culled only yields 10.3 litres/day, while a fourth calver culled produces 23.8 litres/day and a fifth calver yields 25.7 litres/day.
While there are no industry targets for net replacement cost, it is advisable that farms start to work it out and try to increase cow longevity and reduce their net herd replacement cost, explains Mrs Holterman.
She adds: “There is no target for net herd replacement cost. This is a just a relatively new number in benchmarking that US producers have started paying attention to in the past couple of years.
“Knowing your cost and lowering it is what you should aim to do.”
Steve West, knowledge exchange manager for AHDB Dairy, says that reducing the number of forced culls should improve net herd replacement cost.
He adds: “The idea is that higher yielding, year-round calving herds need healthy cows at the fifth lactation.
“If you don’t have them, you have to cull and maintain a younger herd and younger animals have a lower lifetime daily yield.”