.

Jack Kennedy, Irish Farmers Journal, 1 May, 2014

Ambitious growth plan: dairy+ 50%

Huge farmer appetite

It’s not a race past the post in 2015

There will be weather shocks...

• Pic of Lisavaird collection

Balmangan Farm Scotland

Remember - starting off you could already be in trouble

• Pic of fodder

Late calving and scattered calving pattern

• Calf at grass pic...

Remember – recent developments still have to be paid for...

• Pic of recent investment

Next thing – a gate opens next door - ‘For Sale’

What helps with all of this....

A plan...

Yes, just a simple plan...

Written down and in use...

It can be a simple five point plan

or a

Detailed folder of information.

Both will work.

Plan - focus inside the farm gate

(1) Stocking rate & land availability

(2) Quality animal performance

(3) Labour

(4) Investment & Cash flow

(5) New business thinking

What can more grass deliver?

Grass production (t/ha) 9 15

Cow numbers 72 107Stocking rate (cows/ha) 1.8 2.6

Milk Produced (kg/farm) 370,371 546,707

Farm Net profit (€/farm) 35,709 70,450

Grassland plan

1. Adequate soil fertility- P, K &Lime

2. Apply best grazing management

3. Reseed underperforming swards

4. Invest in grazing infrastructure- including drainage

What doesn't help the Grassland plan

1. Out farms

2. Poor drainage

3. Poor species

4. Bad management

5. Poor infrastructure

Balmangan Farms, Scotland

Balmangan Farms, Scotland

Balmangan Farms, Scotland

Balmangan Farms, Scotland

Balmangan Farms, Scotland

The wheel of fortune...misfortune

Mark Cahill, South West Scotland

Mark Cahill, South West Scotland

Dairy Cow needs 5 tonnes dry matter less 700kg of meal = 4.3 tonnes of grass DM.

@ 75% utilisation on heavy soils.Need to grow 5.4 tonnes

@ 90% utilisation on dry soils.Need to grow 4.7 tonnes

Based on full grass and silage requirement – do your sums on 5 tonnes/cow. If growing 10 tonnes that’s 2 cows/ha if 15 = 3 cows/ha

Stocking rate – rule of thumb

Plan - focus inside the farm gate

(1) Stocking rate & land availability

(2) Quality animal performance

(3) Labour

(4) Investment & Cash flow

(5) New business thinking

Quality animal performance

Spring calving herds producing 450 to 500kg of milk solids per cow stocked at 2.5 cows/ha =

1,250kg MS/ha on grass & meal

1.Optimise calving pattern

2.Minimise replacement rate

3.Maintain high herd health status

4.High EBI herd - crossbreeding

What a lower replacement rate means?

Replacement rate (%) 20 30

Milk yield/cow (kg) 5,100 4,950

Replacement costs (€) 28,000 43,000

Net margin/cow (€) 630 490

Farm Net profit (€) 63,000 48,000

Plan - focus inside the farm gate

(1) Stocking rate & land availability

(2) Quality animal performance

(3) Labour

(4) Investment & Cash flow

(5) New business thinking

Labour – what we know

• Expanding soaks up time and labour – designing, planning, recording, quotes..normal

• In Ireland – not cheap and regulated• Different ways to operate – all owned/hired• Need one stop shop for sourcing• Need training & upskilling

Russian dairy farm – scale, cheap feed & labour - competitive advantage

1,000 cows per shed – indoors all year round – 3 sheds per farm

Calves all reared in individual hutches

Essential equipment – snow plough

Plan - focus inside the farm gate

(1) Stocking rate & land availability

(2) Quality animal performance

(3) Labour

(4) Investment & Cash flow

(5) New business thinking

How much risk are you willing to take?

Low rainfall area and dry soils

Farm reseeded, fenced, watered and new roadways installed

A new 30 unit herringbone

Silage pits beside feed face

Feed face (uncovered) scraped straight into slurry tank

Cows housed on a woodchip stand off pad

Woodchip – started cheap but now expensive

Pad working but too costly...however

Calf sheds for rearing

Calf pens....

Cows purchased 260 x €1,350 each from 7 different herds

Mostly black and white...

Rear plenty of replacements up to a point...

Heifers contract reared....

Bred to Ai....

No expensive quads...

Contractor does all machinery work

Investment in machinery small...

Lessons from Kilkenny• Set out a plan and stay as close as you can• Won’t work out as planned• Building in wet weather costs more• Know what you can afford to spend• Know what your repayments will be• Limit spend on unproductive assets• Keep herd health & grass management right• Staged development

There will be many balancing acts

Summary performance results - 2013Summary performance results - 2013

Cows milked at peak 320

Milk solids (kg/cow) 402

Grass grown 10 tonnes

Meal fed 644 kg/cow

% not in calf 10%

Cash margin €95,000

Summary financial position

• Total receipts = €725,910 (49 c/l)• Total expenses = €628,868 (43 c/l)• Net farm position = €97,042 (6.6 c/l) =

€303/cow

To compare to your own farm• Include land rental = €52,000• Include Bank & Interest = €81,000• Include labour cost = €85,000• Net surplus = €315,000/320 cows = €985/cow

Plan - focus inside the farm gate

(1) Stocking rate & land availability

(2) Quality animal performance

(3) Labour

(4) Investment & Cash flow

(5) New business thinking

Future successful expansion will require

• Profitable labour efficient systems are required

• Provide training & business management

• Joined up stakeholders: Contract rearing of young

stock, machinery contractors, partnerships

• More relationships: share milking, equity

partnerships, part time workers

Efficiency comes before expansionAdditional profit is required for expansion

Average dairy farmer has no additional cash for expansion

Successful expansion will require:• A plan• Skill in financial planning and budgeting• Don’t over capitalize in early stages• Stress test plan for profitability and cash

In Summary - conclusion

(1) Stocking rate & land availability – optimise for your asset & your resources

(2) Quality animal performance – use the information others don’t have

(3) Labour – realise the limitations

(4) Investment & Cash flow – staged development & planning

(5) New business thinking – just starting

Up to your neck inSH1T

Means one thing for one person and a totally

different thing for someone else