Presentation-Irish Farmers Journal-Jack Kennedy May 2014
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Transcript of Presentation-Irish Farmers Journal-Jack Kennedy May 2014
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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