Now is the time to start building up a ‘rainy day’ fund

WHAT a difference a few weeks can make. The rain has continued to fall here since the Galway Races.

Ground conditions even on a dry farm like ours have started to get tender, especially near the gaps.

Growth rate for the last week came in at a disappointing 54 kg/dm/day which resulted in farm cover actually falling to 652 kg/ha instead of rising.

This may be a consequence of the exceptional growth all year and nitrogen reserves in the soil may be a little run down. There was definitely a slightly pale colour on the farm last week so extra nitrogen may be required now to boost growth.

We will use urea on the next application as we have reached our target phosphorus (P) and potassium (K) applications for the year.

Our demand last week was 62 kg/day and this needs urgent attention. To reduce demand we will introduce feed now.

Our options are to increase meal from the 1.8kg we are feeding at present, introduce good quality bale silage or zero grazed grass. Having fed zero grazed grass during a feed deficit in April and being very satisfied with the outcome, it is my first choice.

However the only grass we have at present is a bit too strong and is waiting to be cut for round bales on the out farm. We fed a few loads and the cows are a bit hesitant so we will feed some round bales also for a week or two to reduce the demand and increase farm cover. This week the cows are milking 18.5 litres at 4.6pc fat and 3.85 protein which is 1.6 kg/ ms daily on 1.8 kg of ration. SCC is remaining stubbornly high at around 180 and the geometric mean reading 169.

Our milk solids in July achieved a very satisfactory price 7c above the co-op base. Milk cheques are strong at present and I believe now is the time to be proactive and build a ‘rainy day fund’ for the inevitable next downturn in milk price.

Fixed price

There is a flurry of activity by the co-ops towards fixed milk price schemes.

This has to be encouraged to remove the excessive volatility that has become the norm over the last few years.

A second initiative gaining momentum is the entry of a new loan provider through the co-ops.

My understanding from our own co-op, Aurivo, is that the money will be made available at the attractive interest rate of 3.75pc. The really interesting element of this money is the flexible repayment model over the 8 to 10 year duration of the loan.

It allows for repayments to reduce for a period if milk price goes below about 28c, cease below 26c and to be accelerated above 34c/l.

It also allows payments to vary over eight months of the year to match your milk income.

On farms with significant borrowings this could have a meaningful impact on cash flow during low milk price years.

Depending on a milk supply contract being signed between the farmer and the dairy, this approach can pave the way for money to be borrowed on the strength of the milk supply as distinct to the security of land.

This would be warmly welcomed by many of the new entrants operating on leased farms who have put all of