Herd housing pros, cons revealed

Farmers invest in barns or a covered feed pad for a variety of reasons.

They can be an extremely lucrative dairy farm investment but there were plenty of fish hooks, DairyNZ told about 70 farmers at a workshop in Morrinsville.

The workshop was for farmers to learn more about whether they should invest in cow housing.

Such an investment often cost in excess of $1 million.

It resulted in an intensifi- cation of their farm business and farmers needed to do their homework before making any decision, DairyNZ people and business project manager Geoff Taylor said.

Farmers needed to be clear on their goals and understand what they are trying to achieve and why.

‘‘Make sure that intensification will achieve those goals for you.’’

It needed to be treated as an investment decision and any intensification analysis had to be farm specific. What worked on a neighbour’s farm may not work on your farm, he said.

It was not always about money but he recommended establishing what the potential costs and benefits might be so an informed decision is made.

‘‘And your eyes are wide open.’’

A high skill level of management was required by farmer and staff.

Poorly managed highinput systems generated less cash compared to lowinput systems under the same management.

‘‘If you are going to get into high levels of feeding, high levels of intensification, you do need to be sharp on a whole lot of aspects on your farm. It’s not the place to be if you just want to cruise.’’

Intensification changed a farm’s risk profile and it was likely the farmer would not achieve the projected benefits.

A DairyNZ case study of seven farms that had invested in cow housing showed after three years, only one farmer achieved targeted production.

This was hardly a prise, Taylor said.

In the business world, 85 per cent of all mergers and acquisitions failed to achieved the projected benefits.

‘‘You can do budgets, but be really careful how optimistic you’re being.’’

Intensification meant it was highly unlikely a farmer would breach animal welfare standards because they had better control over the body condition of the stock.

‘‘But we do know that if intensive farms go wrong, they can go very wrong and if you do breach welfare standards, those are the sorts of things that can end

sur- your business overnight.’’

There was also a risk of the farmer over- spending because the infrastructure often came with hidden costs.

Taylor had talked to farmers who have installed cow shelters to gather feedback.

‘‘The farmers love them and they wouldn’t go back, but they have just spent $ 1 million plus and it’s really difficult to talk to people who have spent the money and get them to critically evaluate that spend,’’ he said.

Cow housing was a depreciating asset that required ongoing maintenance costs, he said.

‘‘It becomes really critical to think about what the impact of it is on your business over time.’’

There were

perceived

benefits that came with housing cows in barns or shelters, former DairyNZ regional team leader Duncan Smeaton said.

These included the belief that it helped farmers meet nutrient limits because it allowed them to capture phosphorous and nitrogen in the barn.

Standing cows off pastures could reduce nitrogen leaching by 25-55 per cent depending on the farm system and time of the year. This was most effective during the autumn, he said.

However, the intensifi- cation that came with a barn could potentially undo these nutrient loss gains because of the increase in cow numbers.

Less than 5 per cent of farmers are able to run these highly intensive systems successfully, DairyNZ farm systems specialist Chris Glassey said.

‘‘I think they can do it because they relentlessly monitor their feed supply.’’

They were in daily control of the whole system and were flexible and disciplined about the use of supplements.

These farmers make good profits in high payout years, but were disadvantaged when the feed- to- payout ratio went against them.

‘‘ Last year those guys would have made great profits. This year, they will be taking a real hit, I suspect.’’

Off-paddock facilities can also reduce supplementary feed waste and summer heat stress, and prevent over- grazing in the summer.

But Glassey urged farmers to compare the costs of barns with alternatives such as summer grazing and trees for shade.

Photo: FAIRFAX NZ PERCEIVED BENEFITS: There were perceived benefits that came with housing cows in barns or shelters, former DairyNZ regional team leader Duncan Smeaton said.