Profit-a-litre plan cuts costs

Friday, 10 March, 2000

By Jessica Buss

FOCUSING on profit a litre has allowed one Somerset producer to reduce production costs by 6p/litre.

Costs now stand at 15p/litre, before rent and finance.

Chris Saxton, Lipgate Farm, North Brewham, Bruton, hopes further improvements to his simplified production system should see these costs reduce to 11p a litre for the next quota year.

“Even with a low milk price we now have a bright future. We can increase cow numbers without any extra labour, just by further simplifying the system.”

He believes joining a British Grassland Society/Milk Development Council discussion group three years ago has facilitated this improvement in profit.

More milk producers could benefit from joining discussion groups focusing on reducing production costs with this weeks launch of the Pasture to Profit scheme, said BGS consultant Paul Bird.

This MDC-sponsored project aims to give producers, who are not already participating in a Grass 99 group, the chance to join a group at its start.

Producers in the Grass 99 project reduced costs by 3-8p/litre, said Mr Bird. They learn from discussing things among themselves with a facilitator.

Groups can set their own agenda, but key topics are labour efficiency, reducing costs and running a profitable farming system. They will cost £120 for six meetings.

Mr Saxton believes his group fee was well invested. “I benefited by £12,000-worth of reduced costs from the £120 spent.”

His 55ha (136-acre) family farm had 65 cows producing 6700 litres and production costs were more than 21p a litre.

Cows calved all year round, he grew maize, cows were strip grazed in spring then set stocked in summer and were buffer fed all summer.

Managing cows this way coupled with a complex calf rearing system made the unit labour intensive, although it was mostly family labour.

“When the milk price was dropping we had to change something.”
Joining the discussion group allowed him to compare costs confidentially with other group members with a range of systems and see what did and did not work on other units.

He decided to simplify his system, tightening calving towards spring, stopping buffer feeding in summer, group feeding calves and paddock grazing with cheap temporary fences.

Cows are housed for a much shorter winter and as most are dry, cow numbers can increase without spending capital.

“I now concentrate on growing clean, lush grass and grazing it.” Maize is no longer grown.

“I have gained confidence in grazing over the last two years, but I must put the right quality of grass in front of them.”

He is now confident that he can increase herd size to 120 cows and profit from that expansion.

“If we are not feeding and scraping out, I can spend another half hour in the parlour each day.”

There will be extra quota costs to cover. “But with costs down to 11p a litre we can see a way forward buying and leasing quota.”