Organic profit tied to grants
Organic profit tied to grants
Small profits revealed in
the latest farm accounts
show how vital conversion
grants and decent
premiums are to an organic
business, says Stuart
Hailey. John Burns reports
LATEST audited accounts for Mincombe Posts, the unit Stuart Hailey share-farms with owner Olivia Tatton-Brown, show a profit for the year ending Sept 30, 2000. The "unofficial" accounts for 2001 also show a surplus.
But, in both years, profit levels were below the organic conversion grants of £14,000 and £8000, respectively. And the most recent results for Stuart and Sue Haileys Sand Farm, for the year ending Mar 31, 2001, show a rather worse picture. Profit was lower, despite a similar conversion grant and no charge included for Mr Haileys time, and net worth fell by £11,400.
There were no sales benefiting from organic premiums in those accounts so the conversion grants proved invaluable.
What concerns Mr Hailey now is that future grant instalments will be greatly reduced and organic premiums may not be as good as expected. "This year the conversion grant is £3000 for each farm and next year it will be £1200, but trading terms may not improve enough to compensate.
"Although we did start selling organic milk last April weve only been getting the premium on about half the amount sold. If premiums stay under attack the situation is likely to be unsustainable, especially bearing in mind all the extra records we have to keep and the other extra work involved in organic production – not to mention the need for a reasonable return on capital."
Like many farmers he senses the time for major decisions may be drawing near, and he intends to make sure any change he does make will be based on the best available advice.
Following last years detailed scrutiny of Sand Farm by Tony Evans of consultant Andersons, provided free of charge under the Farm Business Advice Scheme, the same service is now being used at Mincombe Posts.
Once Mr Evans produces his initial report, possible future directions will become clearer. So far only one likely trend is emerging – a shift to spring calving of the suckler herd.
With that in mind an Angus bull has been purchased. Local Signet consultant Rob Shields provided a short list of suitable bulls, and after inspecting several of them Mr Hailey chose one from Penny Harveys herd at Crwys Morchard, Devon.
The bulls EBV is AA31, in the breeds top 10%. EBVs for growth rate are 200-day, +38 and 400-day, +68. The corresponding values for the breed top 1% are 42 and 69, respectively. The bull has good conformation, adequate size and is of "fairly old-fashioned breeding".
Bright green grass is already long enough to blow in the wind at but the land is far too wet to graze it. Even using "New Zealand" techniques, it would cause too much damage, he believes.
In some years the herd has been out at grass by now, but has often then been back full time on silage at some stage during March or April.
The cows have been milking well – though not quite at last years level – and most are safely back in calf. But last week herdsman Colin Gilbert was shocked to find two cases of E coli mastitis – the first since 1983.
This is a real blow as the whole range of mastitis conditions had been held to a very low incidence in recent years, especially in the two years since pre-dipping of teats was introduced. Cubicle beds have been given extra lime as a precaution.
The last 18 Mincombe lambs have been sold direct to Lloyd Maunder. Though very much on the lean side, they averaged 20.3kg and £52.88 gross but incurred £3.30 a head for haulage. Mr Hailey accepts that the £60 charge for the lorry was not unreasonable, given the time and cleaning and disinfecting involved.
"But it shows the impact on costs of having only one small batch per vehicle journey. Lets hope the multi-pickup scheme will help on that point." Five lambs graded E, 2 were Us, 10 made R grade and one was a P. Seven made fat class 1, five class 2, one a 3L, one a 3H and one was rejected.
Routine weighing of store cattle at Mincombe confirmed suspicions that cattle were not doing as well as in previous years on silage alone. Calves born February to April last year had gained only 0.38kg a day in the ten-week silage-only period. And the other group, 12 to 14 months old, gained only 0.53kg a day compared with the typical 0.9kg a day in previous years.
Mr Hailey wonders whether they will compensate enough when turned out to grass. His main concern is that the opportunity has already been missed to finish them quickly. *
Less than adequate organic premiums could undermine the business, says Stuart Hailey.
• Sand Farm, Sidbury, Devon, an 89ha (220 acre) organic dairy farm.
• A further 64ha (158 acres) at nearby Mincombe Posts farmed under an FBT.
• 100 dairy cows plus 60 followers.
• 180 ewes – mainly Mules, some Suffolk crosses. Beef suckler herd being established.
• Steep, red clay/greensand slopes at Sand Farm, rising up to flinty clay on plateau. Easier soils and flatter fields at Mincombe Posts.
• Mainly down to grass/clover leys; oats/peas and lucerne/grass mixes grown for silage, plus cereals for feed.
• Some areas in Countryside Stewardship Scheme.
• Three full-time staff.