costs fall

26 October 2001

Cow numbers will rise and too-high production

costs fall

THIS winter, cow numbers at the new Kemble unit will reach 575 with unit production costs still falling and return on invested capital approaching 10%.

Production costs on the old units were too high at more than 20p/litre, says Kemble Farms manager David Ball. "Investing in the new site has cut running costs.

"But expansion of cow numbers was slower than hoped because quota prices remained high. Once quota became cheaper, cow numbers were expanded to increase output and reduce unit costs."

The herd is being expanded by rearing extra heifers, but they accounted for 60% of milkers in the 12 months after the units completion. This high proportion of heifers held back milk output and resulted in unit costs being too high.

It would have been better to buy in cows and sell some heifers to get a better balance, says John Allen. "Alternatively, buy a complete herd when expanding numbers, which is now the approach being used at Kemble."

Managing a large dairy unit requires a different attitude, stresses Mr Ball. "Merging herds and, more importantly, their managers can lead to some difficulties.

"One minute they are managing a herd, the next they are part of a team. They may need training to provide them with additional large herd management," he advises.

The new unit has six full-time milking staff plus two stock people. For large herds, it is more important to have stock people dedicated solely to maintaining cow health, welfare and fertility.

Target staffing rates for any dairy unit is 750,000 litres/milker, says Kite Consultings John Allen. "This equates to a cost of 3p/litre. The new dairy unit is already within this target."

Following completion of the dairy unit, milk quota prices were lower and it was decided to expand cow numbers, says Mr Ball. "But one lesson learnt over the last year was that expansion should be more rapid. It was like running on two cylinders with the costs of running on four cylinders."

The Kemble herd is now producing 5.4m litres/year with cows averaging more than 9000 litres.

Expansion also means more forage is needed. "This was achieved by renting extra land for growing maize. Second and third cut grass silage yields are normally light as grass growth grinds to a halt during summer, " he adds.


* Expand rapidly.

* Avoid too many heifers.

* Staff training.


&#8226 Expand rapidly.

&#8226 Avoid too many heifers.

&#8226 Staff training.

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