Finding ways to boost income on your dairy farm

There are a number of ways to boost your current income, such as keeping milk quality up to optimise your milk cheque, selling excess silage or selling surplus calves. Use this information to find out more.

Back to Coronavirus: support for dairy farmers

Review your milk contracts

It’s important to recognise the effects of contract penalties for high Bactoscan and somatic cell count (SCC) readings, and the financial impact on your business, and then to realise the benefits from resolving. Support on controlling SCC can be found in QuarterPRO and, for Bactoscan, can be found on the DeLaval Milk Production website.

How can you make the most of what milk buyers want in terms of butterfat and protein? Check what your contract is rewarding you for – it may not always reflect where your milk is going. Milk solids can be manipulated through feeding, but be careful to ensure that the additional feed costs are generating sufficient additional income.

The Milk Price Calculator can help you to look at what changing your Bactoscan, SCC, butterfat and protein may, or may not, do to your milk income.

Sell excess forage

Doing a feed and forage budget will allow you to work out whether you have excess forage that you could sell. The Milk Forecasting Calculator looks at the number of milking cows you have in the herd and shows how changes to this can affect production.

You can also watch our webinar Taking stock – Forecasting feed budgets and milk volumes. This explains how to create a new feed budget or adapt your existing plan to suit your current situation, forecast milk volume expectations, and assess how this could affect your income.

Sell surplus stock

Culls

Bringing forward culling dates can reduce milk production. Selling these cull animals saves money in feeding and housing costs, as well as generating income. Optimising cull cow value is important and will be influenced by access to a market, as well as your stocking capacity on the farm. It is important to assess costs if keeping culls to gain condition is of benefit to you.

Dairy youngstock

Work out how many dairy replacements you need to satisfy your herd size. Understand why you are losing cows out of your system and see what improvements could be made to appropriately reduce the replacement rate.

Could you calve replacements earlier (22–24 months) so you have fewer heifers? If you bought better quality feed, the overall costs of rearing might stay the same but allow you to do a better job with fewer heifers. This could also reduce the cost of rearing replacements.

Talk to your local auction market because, if they are not holding live markets, many are offering a matching service for sale of stock between farmers.

Sell excess machinery

Dairy farms can often have too much kit on farm. They often use modern tractors that are too big for the job, or take the expensive route to machine ownership through repayment schemes. Do you really need all of the machinery you have, or could some of it be sold?

This webinar, Machinery for farming or farming for machinery, reviews the idea. Although it focuses on arable kit, the thought processes are just as applicable for dairy-based units.

Explore other income sources

Diversification

Diversifying your business can make it more resilient – but it needs to be properly planned for success.

Our webinar Diversification or distraction? can help you assess when is the right time to diversify, what you should consider and which tools are available to plan a farm diversification.

Read more about diversification

Rear heifers for others

Rearing heifers on contract for another dairy business can take advantage of your skills and infrastructure. Heifers are usually delivered to a contract rearer at 2–6 months of age, and returned to the farmer at 4–6 weeks prior to calving.

Contracts should define each party's responsibilities, and the rearer should be insured for any third-party claims involving the contract-reared heifers. It’s essential that you understand the costs of heifer rearing so that you price your service correctly. A template contract and guidance note can be obtained by emailing Levy.Publications@ahdb.org.uk

Hire out cows

A cow hire agreement allows the owner of dairy cows to hire them out to another dairy farmer for a fee. Ownership of progeny from the hired cows usually remains with the farmer hiring them in (the lessee), but the owner may have the right to buy them.

Should any of the cows die, or become unproductive, the owner will replace them. A template contract and guidance note can be obtained by emailing Levy.Publications@ahdb.org.uk

Work as a contractor

Agricultural contracting can be a viable option, provided you go in with your eyes open, do the right research and ensure there is a market for your proposed services.

Contracting can take a number of formats, from specialist farming services (such as drilling, harvesting, crop spraying or livestock services), to more complex contract, whole farm and joint farming arrangements.

Getting the costings right is a vital step to making it work. Overheads can be crippling and, with machinery replacement costs escalating each year, it is critical that jobs are carefully calculated, to make certain that capital is wisely invested and a return is possible.

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