Dairylink: Kevin McGrade and Charles Clarke on looking back to look forward

25th February 2016

Dairylink: Kevin McGrade and Charles Clarke on looking back to look forward

In this article, Dairylink adviser Conail Keown reviews financial performance for 2015 for Kevin McGrade in Tyrone and Charles Clarke in Cavan.

Kevin McGrade: Farm investment

Kevin McGrade has been investing in his farm and buying land recently. Last year saw continued capital investment on the farm, with a £22,405 spend on a cow drafting area, which includes an automatic three-way drafting gate, a herringbone crush and associated slurry channels and gates.

This work was treated as a priority last year to improve labour efficiency and to reduce stress on cows when sorting for AI or health issues.

Additional land was also purchased late last year, with a new land loan adding to production costs on the farm. The land has allowed an increase in herd size to the current 140 cows. With heifers included, the stocking rate on the farm is 2.1 LU/ha.

Due to heavy soil and high rainfall, limited grass growth is a major challenge on Kevinís farm, which affects stocking rate and subsequent herd size and profitability.

Kevin measured grass growth last year at 9.3t DM/ha.

In total, he fed 1,430kg of concentrate per cow last year.

Extreme rain in July and August last year limited growth on the farm, with five-year average growth in the region of 10.5t to 11t DM/ha.

Gross output for the farm came in at £228,421. This includes livestock sales from cull cows and calf sales.

Total cash costs for the farm came in at £178,365 (21.43p/l) and this does not include capital and interest repayments on loans or personal drawings.

A breakdown of the main variable costs can be seen in the graph.

Purchased concentrate came in at £36,737 or 4.41p/l for the dairy herd and fertiliser accounted for £25,368, which is 3p/l of total costs.

Moving forward, Kevin is keen to continue improving milk solids and herd fertility through a focus on EBI-based breeding policy.

Better-than-average milk solids in 2015 added £25,000 to the farmís milk sales for 2015, with 567kg MS/cow produced.

Other options for Kevin to consider include contract-rearing heifers, which would allow further expansion in cow numbers.

While this is a viable option for Kevin, finding a suitable heifer-rearing partner has proved to be a challenge.

Charles Clarke: Focus on cost savings

Charles Clarke is milking 120 spring- calving cows in an eight-unit herringbone parlour, but recent land development means capital spending is on hold.

Charles decided to hold a parlour investment to ensure no added pressure was placed on farm cashflow. With the poor price outlook, other options are being considered to improve labour efficiency and reduce the time spent in the milking parlour.

One of the options being considered by Charles is the doubling up of the existing parlour and developing a manual drafting gate at the exit point of the parlour to allow for easier sorting of cows around breeding time.

The investment planned is only a fraction of what a new parlour and associated facilities would cost. While the smaller investment is not ultimately what Charles wants, it will deliver in labour-saving without the financial burden of a large project.

In 2015, gross output for the farm came in at Ä229,006. This includes livestock sales from cull cows and calf sales. Total cash costs for the farm came in at Ä139,152, but this does not include capital and interest repayments on loans or personal drawings, bringing the cash cost of production to 26.75c/l.

A breakdown of the main variable costs can be seen in the graph. Purchased concentrate and fertiliser accounted for the most significant costs on the farm at Ä44,375 or 8.47c/l.

This included purchased minerals for both dairy cows and dry cows for the 12 months and also purchased lime.

Moving forward for Charles is about developing efficiencies within the system of production established on the farm. With the restriction of quota now removed, more output can be achieved on this farm, but it must be efficient and contribute to farm profitability.

Holding the current level of supplementation on the farm and pushing output through improved fertility, better grass and grazing management and milk solids, Charles is targeting 600,000 litres at 4.20% butterfat and 3.50% protein for 2016 (424kg MS/cow). Cow numbers can increase slightly, but a 32ha grass platform will limit herd expansion as Charles aims for 3.5 cows/ha on the platform this year.

This article has been reproduced with the kind permission of the Irish Farmers Journal. Please click on the below Irish Farmers Journal logo to be brought to additional dairy articles

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