Milking the extra cow at Yannathan

The number of cows milked and therefore the stocking rate at Redan Partners at Yannathan has been at times a contentious issue amongst the Focus Farms support group and wider dairying community.

Being an Equity Partnership arrangement, the members have at times competing challenges of cashflow, access to finance, aims and ambitions.

The goals of Focus Farm been to:

Remain as a single seasonal spring-calving herd.

To consume 9tDM/ha by year 2 of the Focus Farm.

To increase the equity of the individuals and keep Redan as a financially self-supporting entity.

Achieve efficient production of 1kgMS/kg liveweight.

At this point of the Focus Farm program, all these goals have been achieved. However, to really see growth in the equity of the two smaller equity partners (Dean and Bek, and Evan), increasing cow numbers is essential.

Growth in stock numbers and therefore equity growth in stock is where the dairy industry really kicks goals. The more Redan cow numbers can increase, within reason, the more this goal will be achieved.

There is a direct correlation between pasture directly consumed and profitability on a dairy farm. But we also know that achieving around 3.44tDM/cow consumed home-grown feed this have helps us to achieve strong pasture consumption but also efficient cow production, both goals of Redan.

With 9tDM/ha consumed pasture (4tDM/cow) likely this season (actual 2018/19 was 8.2tDM/ha), we are close to the maximum cow intake possible given the size of the cows (460-480kg liveweight).

So, more pasture consumption is going to have to come from more cows per hectare.

A key support group member said at a recent meeting “when a farm is highly stocked, the decisions become easier.”

“ou have no choice but to apply nitrogen, pastures need to be top-notch and if cows are short of feed, you just have to get the feed to feed them. Being understocked means it is sometimes harder to make these decisions.”

There are quite a few support group members (low stockers), cautious about milking more cows, with justifiable arguments being the wetness of the farm in winter, limitations of the yard and dairy and stretching the very efficient labour further.

The “higher stockers” in the group argue that measures can be taken to minimise the impacts of a wet winter or spring, when it happens, and some of the extra profit made can be invested back into infrastructure or the feed to deal with it.

The “in betweeners” say you can always drop cow numbers if things alter (season, milk price, feed prices), so that margins and profit are maintained.

Milking the extra cow in this coming season at Yannathan Focus Farm is likely to be extremely profitable. There is fodder on hand, with a likely carryover stack of silage containing 375tDM (just under 1tDM/cow).

Further good seasons will see fodder stacks growing, pasture quality declining or inputs being wasted unless cows can eat the feed being grown. Assuming 9tDM/ha pasture consumption is achieved again (typical seasonal conditions) then the ‘extra cow equation’ looks like the following:

Assumptions: medium cross-bred in-calf cow for $1800, 480kgMS produced at $7/kgMS at the same milk price as this season, 1.4t/cow pellets fed at similar grain price as this season.

Whilst this is a partial analysis, as you could quite fairly argue there will be additional costs other than the above from milking another 50 cows (power, wear and tear on machinery, tracks etc), the above table shows clearly that while there is a surplus of fodder on hand, if the existing labour can manage the extra cows and there is the ability to consume more home-grown feed under typical or better seasonal conditions, then there is a lot of additional profit to be made.

We won’t need more fertiliser, nitrogen and pasture renovation, as these are already being applied and we are not seeing the full return from the investment (farm is slightly understocked).

The overheads will be the same and therefore there are some efficiencies to be made, and crucially, the farm doesn’t carry any young stock, so all area is available for milking cows.

In addition to the extra return from the extra cows in milk income, there are additional young stock, which means the equity of Dean, Bek and Evan is increasing even more.

These don’t grow and get fed for nothing, and these costs need to be considered, but these are carried by the individuals at their own cost, not by Redan.

The extra cow at Yannathan Focus Farm this coming season makes absolute sense. There are profits to be made and this will see the farm operate more efficiently as well as profitably.

There will be increased equity growth by the two smaller partners, helping them to achieve a major goal of this Focus Farm.

There will be a final Open Day to review their decision and see how the pathway has developed for young players in the industry. To a large extent, it is all about the partners’ appetite for risk!

- Matt Harms, OnFarm Consulting