Great grazing and first quarter financials

Tom Rawson is joined by Dr Patton as they work though financials at Houghton Lodge Farm and explore how tight managemnt of the business has resulted in profits early in their journey.

Increasing cow numbers will be main focus for Houghton Lodge Farm over the next quarter.

That was the key message to the 60 farmers attending a meeting at Houghton Lodge in Leicestershire in early July.

Attendees were given an update on the farm’s financial and physical performance figures, which showed that milk production stood at three quarters of million litres at the end of May - 275,000 litres less than budgeted due primarily to lower than planned herd size.

The farm still returned a profit of almost £33,000 by tight management of costs and benefiting from a higher milk price.

Izak van Heerden, AHDB’s Senior Knowledge Exchange Manager who facilitated the event said: “Being open and honest about the key performance data is a great opportunity for farmers to follow the development of a new dairy while encouraging farmer-to-farmer learning and benchmarking.”

Run by Evolution Farming in a joint venture with Farmcare Limited and financed with £1 million of seed capital, the project has brought life back to a redundant dairy unit.

The money has allowed investment in farm infrastructure including two new 24:48 swingover parlours, reseeding the ground previously laid to arable and 20,000 sleepers for cow tracks.

Funded separately by Evolution Farming, the 585 cow cross-bred herd is smaller than the 650 budgeted for resulting in 82 less cows in milk than originally planned.

Tom Rawson from Evolution explained: “We started buying cows the day after the referendum vote when prices were at their lowest, picking up the bulk of herd for £740 a head. The herd includes some autumn calvers rather than the fully spring herd we wanted.

“We set a fixed budget to spend on cows. If we’d waited a few months later when prices were around £1,200 per head, the herd would only be half the size it is now.”

Tom explained that milking began earlier than planned to help ease cash flow and make the most of a rising milk price. Falling yields have been balanced by high fat/ protein levels.

“We have 450 springs for 2018 and expect the farm to be close to budget of 3.8million litres. Increasing the herd is one of areas we need to address.”

Costs for concentrates, water rates and vets/ meds were all higher than planned but these are expected to fall over the coming months. The farm has lost 60 calves over the year, in part due to a rotavirus outbreak, which Tom described as “unacceptable”.

“Reducing reliance on cake, drawing water from our new bore hole and dedicating a member of staff to get the calf management basics right will help bring costs down” continued Tom.

Houghton Lodge Farms sits with the Stoughton Estate, which grows combinable crops, including wheat, barley and rape seed oil on the remaining 1800 hectares bringing benefits to both enterprises.

“The landlord provides the straw in exchange for muck and the arable side muck the sheds out every 21/24 days when they have time over winter. In return Evolution will spread muck when they’re busy.” said Tom.

“Hitting the numbers is key to making the project a success and being a Strategic Dairy Farm pushes us to get the figures up-to-date every three months. It’s going to take us three years to get the farm to where we want it to be. Making a profit in year one is a good result.”

As well as being updated on the farm’s financial and physical performance, attendees also learned about great grazing from Teagasc’s Dr Jo Patton, who leads their dairy production systems research.

Dr Patton, gave an overview of the Irish dairy industry explaining that 85% of the 16,000 herds are spring block calving with an average herd size of 87 cows. Yields are around 5,100 litres, producing 6.67 billion litres overall – an increase of 43% since 2010.

Dr Patton said: “We don’t have access to cheap grain so the grazed grass model helps to keep costs of production low. As such grass utilised per hectare is the most important measure. ‘Grow it, graze it, save it’ is my key message”

“In the spring every day is a grazing day even when it’s raining. Farmers should aim to graze out 30% of their pasture in February to get the grass back in April. This sets the farm up for the rest of the year.

“You might lose 1 ½ litres output but you’ll gain it back in future rotations. Aim for 3.5cm grass height in the first grazing rotation and then target 4.5cm for mid-rotation to maximise your kg milk solids.

“For a spring system the target for peak cover should be 2,700kg DM per hectare by late September/ early October. For autumn calvers you should bring the cover back by 300kg to 2,400kg DM per hectare by 25thSeptember; achieving this by taking the surplus grass covers out as silage through August.”

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Dr Patton explained that the best farms focus on four areas:

“A high stocking rate of 2.55 cows per ha, low feed costs, kg milk solids – aiming for 460 kg fat/ protein per cow – and getting machinery costs under control are traits of the most profitable farms.

“The drivers are the same for winter and spring milk. Do the right thing and do it every year rather than changing your system due to a low milk price.”

Dr Patton then joined a panel of grass based farmers for a question and answer session. The panel consisted of Mark Housby, herd manager at Houghton Lodge Farm, Johnno Hughes from Market Bosworth, George Brown from Cumbria, Richard Dayment from West Sussex and Chris James from Pembrokeshire

Topics covered included pre-mowing, which the panel felt wasn’t necessary and paddocks should only see a blade in the third or fourth round of a rotation. They said many farmers often pre-mow just to keep a tidy farm or where the grass has grown over. When pressed on whether they thought it was better to grow the grass on another couple of weeks and then bale, they said that mowing helped to maintain quality for the next round.

Attendees wanted to know when it was too dry for a spring calving farm. The panel said important to monitor rainfall and growth patterns over a couple of years and then match stocking rates to growth. Dr Patton said: “The east coast region around Dublin gets 750mm of rain each year and there are plenty spring calvers there; they simply make provision for 2-3 weeks forage buffer in summer.”

When asked whether farmers should take a different approach to clover management, the panel said they should treat it the same and don’t see a difference in performance. “Even if it looks like it’s entirely clover, it’ll may still be over 60% rye grass” added Dr Patton; “25-30% clover on average is optimum. There will be variation from 20-50% between swards but for easier herd management it is advised to try to have a clover inclusion across all paddocks on the platform.”

 Finally they were asked for their thoughts on whether it was better to reseed in the spring or autumn. While some were in favour of reseeding in April, Dr Patton said the key was turnaround times and overall management. “People often struggle to get in early enough, but when it needs to be done, it needs to be done.”

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