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Developing the dairy farm business

Sam Thompson, Senior Dairying Adviser CAFRE

In N. Ireland we have many excellent dairy farm businesses which are a credit to all involved.  What sets these businesses apart from those which are ‘mediocre or ordinary?’  It will of course be impossible to cover all in an article for United News.  However, as I come to the end of my 40 year careers in DARD, I will call upon this experience to highlight in my opinion the key factors which account for the difference.

The People

It has been a pleasure to work with enthusiastic forward thinking dairy farmers.  These people are focusing on business issues on which they can impact.  They realise there is no point in getting consumed with issues outside of their control.  What strengths do they have in common?
  • They are not consumed by ‘work.’  They have realised that ‘hard work’ does not make a successful business (in many cases the contrary is true.)  They have built in free time and holidays.
  • When young people join the business they are allowed to be involved in decision making and to take responsibility.  They are encouraged to take time out for training and development.  I despair when I see 25-30 year old sons or daughters who are mere tractor drivers or milking operatives.  These businesses have no future.  Encourage the next generation they are full of good ideas and youthful enthusiasm.
  • They are people who are focusing on profit and the main issues contributing to this.
  • They keep and open mind and will adapt to change.  They will always make use of learning opportunities and professional advice.
  • They have a clear vision on where there business should be in both in the short and long term.
  • Finally and critically those who are developing successful dairy farm businesses are “business managers”.  If you are not sure how to be a ‘business manager’ then having another read at the points mentioned above may at least get you thinking.  
Hopefully I have made it clear that those in charge of our very many excellent dairy farm businesses are ‘business mangers’.  I will now expand on some of the management issues, which I feel have been critical to the success of their businesses.

Focus on Profit

More cows and more work do not necessarily mean more profit.  In fact the contrary can often be the case.  Expansion is one important aspect of developing a business. Virtually all of our top dairy businesses have expanded but in a way that was planned costed and controlled.  The bottom line has to be ‘how much can this business pay me for my input and how much is it generating for reinvestment?’
Successful businesses know this figure and the main issues which influence it.  If you have a herd of 120 cows would you be happy with £50,000 to cover your own labour and for reinvestment?  Many 120 dairy cow herds come no where near this figure.  Focusing on profit does of course mean keeping and using information.  Not popular with dairy farmers but most of the top businesses are now using some of the excellent computer packages currently available.  Remember get better before you get bigger.

Efficient use of Labour and Capital Investment

If you are spending over eight hours per day milking your herd your business is going nowhere.  If someone else is milking for you I can guarantee they are looking for other employment.  Successful businesses are constantly reviewing options to make good use of labour.  I have listed some examples;
  • Modern milking parlours and drafting arrangements are common place on progressive dairy farms.  Parlours have been installed to milk large herds in under two hours with automatic identification and drafting facilities well worth the investment.  Time and time again I have noticed herd performance improve as milking time reduced.
  • Contractors have made the big investment in machinery.  The top dairy businesses make good use of them.  By good planning the contractor knows exactly what is required.  There must be good communication and trust by the farmer and contractor.
  • Animal welfare and efficient use of labour go hand in hand.  Progressive businesses have invested in comfortable cubicles, adequate feeding space, well ventilated buildings and carefully planned cattle handling facilities.  All contributing to herd health and reducing the time spent dealing with problems.
  • Some of the larger businesses are using contract heifer rearing.  A partnership is required with clearly defined targets and areas of responsibility.
  • Automated calf rearing systems are proving popular with many siting them as one of their best investments

Quality stock

Full credit to all involved in our very best dairy farms. The quality and management of their stock is exceptional. Currently they are focusing on the following;
  • Breeding replacement heifers with the capacity to produce relatively high yields of quality milk capable of utilizing forage.
  • Calving heifers at 24 months with a target weight of 570-600 KGs.
  • Maintaining or marginally increasing milk yields while increasing compositional quality.  Targets have been set for butterfat above 4.1 percent and protein above 3.3 percent
  • Selecting for longevity with target life time yields in excess of 35,000 litres.
  • Improving fertility by selecting bulls with positive PTAS.
Fertility management is a major issue on even the very best farms.  Many admit they have difficulty meeting submission rate targets of 80-85 percent and a target pregnancy rate to first service of 55 percent.  But they are seeking how to harness the latest technologies to improve on current fertility performance.

Milk from Forage

Greenmount Dairy Benchmarking has shown that milk from forage has fallen by 900 litres per cow over the last eight years.  This does not surprise me.  I know a number of farms where cows producing less than 30 litres are housed 24/7 during April, May and June.  I have no idea why people are doing this.  One explanation I got recently ‘my neighbour keeps all indoors until July and he has cows giving over 10,000 litres.’  There is a misconception among some dairy farmers that high milk from forage is all about a low input spring calving system.  This of course is nonsense.  Milk from forage is also an integral part of high output systems.
Grazed grass and a 3 cut silage system are the cheapest feeds for dairy cows.  Some businesses are achieving annual yields of up to 8500 litres with 2-2.25 tonnes of concentrate.  This is close to 4000 litres from grazed grass and silage.  A challenging target which demands top class forage management.

Summary

This article is based on a number of well managed dairy farm businesses which I know particularly well. I have discussed five main areas which I feel make the difference between excellence and mediocre.
  • The people
  • A focus on profit
  • Efficient use of labour and capital investment
  • Quality stock
  • Milk from forage
The most important of the five is of course the people managing the business.  Finally can I thank all those farmers over the past 40 years who have supported me in my work and allowed me to thoroughly enjoy my career.  Continued success in the future.