WHY TOP HERD SALE ADDED UP
WHY TOP HERD SALE ADDED UP
IF YOU had one of the top 10 herds ranked on PIN, producing a margin over purchased feed of over £2000 a cow, would you sell it?
That is exactly what brothers Andrew and Peter Chadwick did with one of their three dairy units this June. They took the decision to close their Bretton Hall dairy, Chester, and that meant dispersing the 150-cow herd and 140 followers.
There were many contributing factors towards the units closure, explains Andrew Chadwick, who says that it was the most difficult decision the family has ever made.
The main reasons for the units closure were that its four staff were all at retirement age and the 30-year-old parlour needed replacing; closing one of three units will release capital, improve efficiency for the future and add flexibility to the business.
Full budgeting
Mr Chadwick admits that to make this decision three or four full budgets were calculated with many variations considered on each.
The Chadwicks ADAS business consultant, Mark Roach, explains that to have refurbished the unit to take it through the next 15 years could have cost over £100,000. But all the staff were close to retirement and there was the option to extend facilities at another unit – Gorstella – which had a new parlour capable of higher output.
This way capital has been released through the sale of cows and a small amount of quota – although enough quota has been kept for the farms future needs, says Mr Chadwick.
"Although this was not a decision driven by economics, it does consider the economics in the long term and the drive to become more efficient."
Most of the financial benefits of fewer tractors, less machinery, and lower electricity and labour will not be lost when the Gorstella herd is expanded to cope with an extra 60 cows. The third 140-cow unit at Two Mills will not be expanded.
Freedom for manoeurve
"Initially income will come down, but we are trying to put ourselves in a more flexible position with more freedom for manoeuvre," he says. Running one less unit will also lower production costs a litre.
Land at Bretton Hall will not be sold. The farm is adjacent to the Gorstella unit which, when building work is completed, will supply the forage needed. There will be excess land because cow numbers will not increase to the current level, so alternative cropping is being considered, but the land is not registered for arable aid payments.
Mr Chadwick will continue to zero-graze his cows so distance to grass fields causes few difficulties. Zero-grazing ensures the high intakes needed to achieve the herds high yields. And once committed to a high cost feeding system, maximising yields is the best way to justify those high costs, he maintains. *
Selling the Bretton Hall herd was the most difficult decision Andrew Chadwick has ever made. But it was one that will improve effeciency for the future.