Three calving systems can produce a profit
By John Burns
FOCUSING on ways to reduce milk production costs must continue, insists a Barclays Bank agricultural specialist. And those ways are well-known and clearly documented, says New Zealand-trained consultant Paul Bird.
At a meeting in Tiverton, Devon, organised by Barclays and New Zealand Genetics, the banks Paul Tatam said the current margin over quota cost was excellent, but it would be much lower next year. Then, once again, there would be a major emphasis on reducing production costs.
Mr Bird said three distinct production systems could be profitable. The first was block spring calving – February to April – with milk produced mainly from grazed grass. An alternative was block autumn calving – September to November – with low machinery costs, simple winter feed system and flat rate parlour feeding. And the final option, all-year-round calving, producing 10,000 litres/cow or more.
He was satisfied the first two were basically profitable, but he believed only a minority of herds operating the third were making good profits.
But whatever system was chosen it must be clearly defined, he said. Key information on all the systems was freely available. "Pick a system and read the manual."
Simplicity remained important in all of them, added Mr Bird. Tight block calving could save2-5p/litre on labour costs.
He also suggested rearing calves in groups or contract rearing as ways to cut costs. For cows, feeding systems must be simple, but investing in infrastructure, such as tracks for all-weather access to grazing, may be beneficial.
Savings could be made by not paying people to calculate useless measures such as margin over concentrates, milk from forage, yield/cow, and milk and blood urea levels, he added. Choosing individual bulls for individual cows was also said to be pointless.
Examples of factors worth measuring for a spring calving herd producing milk from grazed grass were cow condition at calving – ideal score three; pasture cover in February with a target of 2200kg of dry matter/ha; compactness of calving with an 85-90% service rate and 60% non-return rate and weight of replacement heifers at calving.
Once the chosen system was underway, focus on getting the basics right, advised Mr Bird. "Dont tinker with the details too much."
Current record milk prices in New Zealand were tempting producers there to tinker with well-established profitable systems. "Make sure your system is profitable at a range of milk prices and be wary of changing it for a few thousand £s extra in an unusual year, such as this one. And never try to extract the last 5%."
When aiming to reduce costs from the system in operation, Mr Bird recommended concentrating on bought-in feeds, heifer rearing, replacement rates, labour, private drawings, machinery depreciation and finance charges.
It was possible to negotiate on loan size, interest rate, fees, and security margins. "I see many producers getting a poor deal on all four counts because they are not approaching the banks in a professional manner. Prepare budgets and business plans to show you are a low-risk client," he said. *