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Expanding Dairy Farmers Have 2 Options: Get Better or Get Bigger

Expanding Dairy Farmers Have 2 Options: Get Better or Get Bigger

Dairy farmers thinking of expanding have two options: Get better or get bigger, according to Derry O’Donovan of the report ‘Opportunities for sustainably competitive Irish Agriculture’.

The report was launched recently, in association with Grant Thornton, and said that while Irish agriculture is at a ‘tipping point’ it must a adopt a ‘smarter’ strategy to ensure the equitable development and longer-term success of the sector.

O’Donovan said that the gap between the top 10% of farmers and the average dairy farmer converts into €400/cow or €25,000 on the average dairy farm in Ireland.

“There is a serious gap there and one has to post the question, why has this gap persisted over many years. Is it due to a technical or husbandry deficit?

“Why are people not achieving even half the level the top 10% are achieving? Is it business/financial skills constraints?”

The expansion options to dairy farmers, he said are to increase efficiency or increase cow numbers.

Increasing efficiency means increasing milk output, milk solids and paring costs to the minimum and that 90% of dairy farmers in Ireland can increase their profitability through increased productivity.

“Why are they not doing it?”

That, he said, is the least-cost route for many farmers.

Expansion in cow numbers, however, he said would be the route for many farmers looking at expanding but it will involve investment in cows, labour and infrastructure.

O’Donovan also that there had been a slight overhyping of the liquid gold revolution of the last few years.

“It’s fine to say there will 300,000 extra cows or thousands of new jobs, but who is going to pay for it? The persons behind the growth is the individual risk taker – the farmer and there has to be an incentive for the farmer to grow their business.”


Dairy Farmers Finances

He also said that Ireland is a wonderful country for making mistakes and into learning from them, but banks must play a role in eliminating this.

He said banks must take the initiative to have a standardized application form that will capture all the information needed. “Banks must carry out realistic evaluation and must also fund cash flow difficulties.”

However, there is gross under estimation of expansion project costs, he said, and the overdraft is the easiest available money.
“But if you rely on that you will run into ‘hard core’ problems as we call them in the bank.”

The investment must add value to the business and buildings and investments should be functional, not palatial, he said.


Price Volatility for Dairy Farmers

Price volatility is a major risk factory, O’Donovan said, and provides opportunities for people in suits. Dairy farmers, though, he said are now particular exposed to price volatility must manage it.

“It has been a permanent feature in the oil industry, in the stock market and commodity market and currencies. It continues to be driven by supply and demand and economics and politics and geopolitical issues, speculation and sentiment.”

Farmers must improve efficiencies and look at fixed price contracts, he said. “This is realistic farm planning.”

He also said that a successful expansion plan must include family buy in; spouse involvement and succession plans.

Milk Output Surges as Grass Growth Hits Record Highs

The unseasonably dry and mild October weather has delivered a farming bonus, with grass growth up to 30pc above normal and milk production up by as much as 50pc on some farms.

The surge in milk output is partially compensating for dairy and tillage prices that have dipped below the cost of production.

Met Eireann data shows that rainfall for the first half of the month is less than 10pc of the October average at Moorepark and Ballyhaise, while Athenry and Cork are at 13pc and 14pc respectively.

Temperatures are up to 1.5C above average for the month.

Teagasc's Dr Michael O'Donovan predicted that 2015 would surpass the record-setting grass yields of 2014.

"Grass growth last week was 30pc higher than the same week last year. We expect grass growth in 2015 will surpass that of 2014, which was an excellent grass producing year," he said. The shoulder periods of April and September to October were giving 2015 the edge on last year, he added.

Grazing

But Mr O'Donovan cautioned farmers not to lose sight of the need to close off paddocks over the coming weeks to ensure adequate grazing in February 2016.

Week-on-week milk intake at the dairy processors is up by 10pc in Kerry, with Glanbia reporting an increase of 29pc and supply in the Dairygold area up by 33pc. Processors are also reporting an increase in protein levels which is adding 1-3c/l to farm receipts. This balances out slightly lower butterfat because of the higher
production.

Respiratory Disease Accounts for 26% of All Cattle Deaths

Respiratory disease accounts for 26% of all deaths in beef and dairy cattle, the Department of Agriculture’s Laboratories Quarterly Surveillance Report has found.

The report refers to the third quarter of 2015 (July to September) which was characterised by a wetter than average July and August and a very dry, but cool, September.

The late summer months typically herald a reduction in carcass submissions to Department laboratories while animals are at pasture during July and August with an occasional rise in submissions of weanlings recorded, particularly with diagnoses of pneumonia, in September as the autumn sales begin.

The report found that the seasonal rise in respiratory disease submissions was not witnessed in this quarter which is probably, in part, due to the favourable weather conditions for stock at weaning this year.

Alimentary tract disease was diagnosed most frequently as the cause of death in all ages of cattle in the second quarter with respiratory disease considerably less frequently diagnosed.

This quarter recorded a reversal of this trend with respiratory disease recorded moderately more frequently than alimentary tract disease.

The Most Common Causes of Death in Cattle

Pneumonia was the most common cause of death in cattle of all ages in the third quarter, with 90 deaths.

Enteritis was the second most common cause of death in cattle with approximately 27 deaths, followed by poisoning with 17 deaths.

Blackleg was the next common cause (approximately 17 deaths), followed by septicaemia.

In calves aged less than one month the most common cause of death was alimentary tract disease, accounting for almost 40% of all deaths in this category.

In calves aged greater than one month but less than three months 33% of calves in this category died from respiratory disease. This was closely followed by alimentary tract disease (almost 30%).

Housing is One of the Best Times to Treat Cattle for Parasites – Teagasc

Housing is one of the best times of the year for treating cattle against some of the more common internal and external parasites, according to Teagasc.

Housing is one of the best times of the year for treating cattle against some of the more common internal and external parasites, according to Teagasc.

Most beef farmers treat their cattle around housing, but there are so many products now on the market that it can be confusing as to which product to use and how best to use it.

Some farmers also have products left over from earlier in the year and these also need to be considered, it says.

Products vary in price, in what they control and in how they are given to the animal.

Key questions to consider when selecting a dosing product at housing:

• Will type II stomach worms be controlled?
• Will lice be covered?
• Do I need to cover for liver fluke?
• How convenient is it to give the product?
• How long after housing do I need to wait before giving the treatment?
• Will I need to give a second treatment and when?
• Could rumen fluke be an issue?
• How long is the withdrawal period with any of the products used?
• What will the overall cost per animal be?

According to Teagasc, all of the avermectin (any product that has an active ingredient ending with ‘mectin’), and all of the benzimidazole (mostly white drench products) will control type II stomach worms and lungworms.

The levamisole products (mostly the clear or yellow drenches) will not kill type II stomach worms and should not be used.

Some of the combination worm/fluke drenches are levamisole based and so should not be used for a housing dose.

The avermectin products will also control sucking lice. If you are using a benzimidazole wormer you will also need to give a lice treatment.

Depending on the amount of lice present, many of the lice only treatments recommend a second treatment a number of weeks later. On farms that have to treat for fluke, the key thing to watch is the product used, says Teagasc.

Some products only control adult fluke, whereas others will also control immature fluke.

Only a small number control early immatures. Know which type you are using; otherwise, you may only be killing a proportion of the fluke present.

According to Teagasc, many farmers will treat for fluke a couple of weeks after housing (along with their stomach worm and hoose treatment) and again later in the winter to pick up those not covered.

Otherwise, you have to wait too long to give the fluke treatment to make sure that they are all killed with just one treatment.

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Farmers Across the Country Asking if it's Worth Producing Milk into the End of the Year

Dairy farmers are asking if it is worth continuing to produce milk into November and December and when spring-calving cows need to be dried off, now that milk quotas are not limiting. They are also asking if cows are to be milked, how does this affect autumn grassland management?

The simple answer to the first question is that the calving date and condition score should decide when the dry period starts. Cows finishing their first lactation and predicted to calve for the second time in early spring need at least 10 to 12 weeks dry to regain lost condition score. Mature cows in good condition will suffice with six to eight weeks dry, but if they are due to calve in early February, this means they need to be dried off by the end of November.

Again, if cows are in poor condition score, it is better to dry them off for two to three weeks in addition to the eight-week basic treatment.

One of the golden rules for spring grassland management suggests the first paddocks targeted for grazing in early February need to be closed in early October.

The rest of the paddocks should be closed in rotation from then onwards. If you graze the first paddocks for the spring in November and December, you won’t have grass on them in February.

So, if late calving cows are being milked then the autumn grassland plan should not change.

You need to stick by the plan to have spring grass available and that means starting to close in early October.

1. Feed meal or round-bale silage to fit the autumn feed budget and to supplement what grass is left on-farm.

2. Autumn clean-out is important and cows should, if at possible, clean out the paddock so that there is no carryover of old clumps of grass that will die off over winter and cause bare patches in the sward next spring.

3. Start drying off cows from mid-October. The first cows to be dried will be those finishing the first lactation, thin cows and those milking less than 8kg per day

4. Only late-calving cows can potentially be milked on into December and January. Whether this is worthwhile or not depends on the quality of forage available, the price of concentrate purchased and the value of the extra milk. Don’t compromise condition score for spring-calving cows.

Article by Jack Kennedy in The Farmers Journal 1st October, 2015.