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

Irish Independent - Farming - - FARM OUR - HENRY WALSH

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

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