PROCESSORPOWER ON TOP
Milk processors seem to have got exactly what they wanted following the break-up of the MMB – cheaper milk.
But it is worth questioning how they have achieved prices as low as producers will receive for this months milk when last years UK price was already more than 1p/litre lower than most of the EU.
The power of processors started with Milk Marque plus contracts, tempting producers away from co-op strength. And with good bonuses how could anyone blame them for being tempted.
Then the strong £ came into effect, giving processors and retailers a reason to bring down milk prices.
With producer power now well quashed, there has been no way to stop processors.
In this Update we review the state of the milk market, find out the expectations for Milk Marques three successors and how other better-established co-ops are faring.
We also look at what is happening on farm, as the average producer is set to continue losing money this year. Quota leasing prices should come down, but with many keen to survive there may still be good demand.
For some producers it is time to think about business structure: When the sums wont add up on a unit, it could be worth starting a joint venture with a neighbour.
According to one report in this Update, partnerships could be worth a valuable 1.5p/litre in cost savings. Another report discovers how a partnership between neighbours in Denmark is working.
But whether making major business changes or not, there is little margin for error. That means top quality management, whether grazing or drilling maize, and this Update provides essential advice to help achieve that.
REPORTS FROM THE SHARP END…
The real world of dairy
farming is reflected in the
experiences of our
contributors. Heres the
latest news from our four
busy producers. Their
reports are from Berks,
Co Durham, Staffs
Steve Brown farms 200ha
(500 acres) in Co Durham, in
partnership with his parents.
The familys 125-cow herd is
run at Hopper House; with a
200 ewe flock and
replacements on grass at a
separate unit and the
remaining land as arable crops
IF IM following in the footsteps of high-flying John Round let me get in first before you pass judgement – its a case of the Lord Mayors parade being followed by the muck cart. If he is Manchester United, welcome to Hartlepool United.
However, if – with all due respect – reading the farming press sometimes leaves you feeling depressed with features about efficient producers who leave you trailing far behind then fear not, your days of feeling inferior are finally over.
Our herd averages a moderate 6500 litres at present, heading towards 7000 in the near future, though chasing yield at the expense of profit is not high on our agenda. Beyond this, in the current economic climate, quota would be a constraint for careful consideration; similarly buildings limit a large increase in cow numbers.
Perhaps when our yields finally reach a level to shout about, the dairy industry will be brighter. Lets hope these situations arise sooner rather than later. For now we aim to simply stay in business, until the time when investment and expansion are more viable propositions.
Over the years, our dairy herd has gone through the Jersey/Friesian/Holstein transition, and it still has an assortment of all sorts in between. But weve recently graded up, so most cows and followers have certificates to prove their dubious ancestry.
For puritans among you, Ill admit that this herd is more like the United Nations congress than the peas in the pod depicted in glossy adverts and brochures. Our prefix could have been the Beer-Goggles herd, after those imaginary optical aids through which ugly women become attractive to men whove had too much to drink: Such spectacles would certainly be handy here.
Despite this, there are exceptions; we recently had a good looking Rudolph heifer calve. She was out of a bought in heifer herself, I hasten to add – we dont spend that much on semen. Im glad our consultant made the effort to see her at his last visit, as she was on route to the local Hunt kennels a few days later; her sad demise the result of a twisted intestine. *
Mark Osman is herd
manager for the 300ha(750-
acre) Berks farm owned by
Zeneca. It is two-thirds
owned, and 154ha (380
acres) is cropped with
117ha (290 acres) of grass
and 2.8ha (7 acres) of
maize. Stocking is 150
Friesian Holstein cows,
80 replacements and
330 ewe lambs
HAVING recently moved into a 15th century farmhouse with over an acre of garden, my wife has increased my life insurance. She did this after watching me trying to mow the lawn with my little push mower.
I am not mean by nature, but I would not like to see her too well off, so I bought a ride on mower to ensure my health does not suffer.
When riding on the mower one Sunday, I suddenly learned the meaning of leisure time, which my friends talk about with such enthusiasm. The only problem is that I ended up wondering why, when the soil temperature is above 10C, we are not drilling maize.
At that point I abandoned my mowing and went and turned ewe lambs out, which pleased them, on to some catch crop grass which we sprayed with magnesium supplement a week before.
As we struggle to increase the number of red-and-whites in the herd above six, the most recent red heifer calf is showing signs of being incredibly daft, as it refuses to drink in the company of other calves and only drinks milk when a human is present. This could seriously hamper our chances of increasing red cow numbers to seven.
All cows are out at grass by day consuming 6-8 kg DM/day, which has tied in well with finishing red clover and first cut grass silage. We now have the opportunity to upgrade silo floors.
Our worst silo was resurfaced three years ago using hot rolled asphalt – which is still like new after heavy use. Quotes I have received for the same operation now are frightening and would add £1/t of silage stored for the next five years. But if it is not done soon, we will have a greater job justifying new silos at £15,000 apiece.
Recently I have been forage box feeding cows at weekends. It has not been lost on me that after three weekends I now receive a detailed written work plan from the herdsman. I think I will stick to mowing my lawn in future and leave forage box feeding to the professionals. *
George Holmes farms with
his brother David, on two
rented units totalling 144ha
(360 acres) in Sussex. They
are stocked with 145
autumn calving dairy cows
and 100 followers. His
objective is to decrease
costs, by increasing use
of grazed grass
COWS went out days on 6 Mar to eat grass left on fields from autumn. Over the following week grass growth was amazing for the time of year, at almost 50kg DM/day, so we put cows out full time on 14 Mar. This was a week earlier than the last two years and our earliest yet.
We have stopped all silage and concentrate feeding and production has held steady at more than 24 litres of milk/cow. Its great to be free of yard scraping, feeding and bedding. By my calculation, each day we are saving £15 on straw, £40 concentrates, £30 silage and £20 labour, which totals £105/day.
To optimise efficiency, we are trying to graze fields earmarked for grazing first, followed by first cut silage fields. We will then graze Italian ryegrass which was under-sown with maize before returning to grazing paddocks.
My previous experience is that if we graze fields intended for first cut before 1 Apr the yield does not suffer much. Having said that I expect fast early growth this spring will mean lower than normal growth later on. In other words high growth rates now makes it less likely that we will get such high growth rates as normal in early May.
We are currently sowing 10.5ha (26 acres) of spring wheat, which we have under-sown with a long-term grass ley. This should be ready for late summer grazing. We need more grazing area because heifers are back home this year due to us giving up my fathers 20ha (50 acre) farm when he sold it. In any case linseed which wheat is replacing certainly looks less attractive this year.
I am really pleased to see that Milk Link, our new milk marketer, is off to a good start. The sign up has been tremendous and considering the £s strength the starting price for our milk is better than expected. I hope the extra demand identified continues. *
Stephen Brandon farms
100ha (250 acres) at New
Buildings Farm, Stafford,
with another 30ha (73
acres) of grazing taken
annually. He has 170
pedigree Holstein Friesians
and 110 replacements.
Recently he took on a
contract farming agreement
involving a further 160 cows
on 80ha (200 acres)
GLORIOUS weather and fantastic grazing have made an irresistible start to spring here. Milking cows have grazed day and night since 7 Mar without a single hitch and two weeks later, almost all stock were out grazing full time.
Our plate meter and grass budget are invaluable: Without them I would never have had the confidence to stop feeding silage so soon. Concentrates are being fed at a flat rate of 4kg a cow, down 2kg since full time grazing started, for an average production of 31 litres/day.
Dry cows are tidying up one or two paddocks that milkers didnt graze too well in wet conditions during February, and yearling heifers are grazing well and looking fit after a short winter on silage and 1kg of maize gluten/day.
Half of this years February born heifers now have access to grass, the others are waiting for modifications to the shed to allow them to run in and out. We continue to feed them milk and will wean them as they start to graze.
By mid March, the dry second cut silage made last year was beginning to heat in the clamp so I made the decision to seal it. But I expect the weather will have changed by the time you read this and we may be forced into feeding silage again. This winter cows only ate half the silage available, giving us the opportunity to sell some surplus silage bales.
Changing the parlour for the second time in five and a half years has been worthwhile; although cow throughput isnt as high as I expected, litres/hour are up by more than 50% at 1500 litres. All we need to do now is to cull slow milkers.
The dramatic drop in milk price for the next quota year has pushed us to question certain fixed and variable costs more than ever. As we have surplus silage, extra grazing acres we normally take each year will not be needed, reducing rent. Milk recording and pedigree registration are also difficult to justify in our drive to reduce production costs, so they have also been dropped. *