The two-day Positive Farmers Conference and networking event was attended by more than 400 farmers each day. On day one, Pat Hickey told the Hickey family story. When they got married in 1967, Pat’s parents Paddy and Joan had 50 acres and five cows.

When Paddy and J0an officially retired, they had built the farm up to 500 acres of debt-free land.

Pat says this was the springboard for subsequent growth. In 2003, Pat and his brother John bought their first farm, a 50ac block near the home farm in Kilkenny.

“It cost us €250,000 and we borrowed the money over five years, but ended up paying it back in two years.

"This gave us confidence that we were on the right road and it probably gave the bank confidence too,” Pat said.

Eager to grow but with the land market in Kilkenny heating up, the family started to look outside Kilkenny. In 2005, Pat and John went to Westmeath to buy a 255ac dairy farm with a large milk quota attached. Pat and his wife Elaine now operate this farm. They have since purchased other farms in Westmeath and Roscommon.

Pat Hickey speaking at the Positive Farmers Conference.

But the growth of the Hickey family’s farming business has not been confined to the midlands. Brothers Tom, Michael, Noel and John have bought and leased land in Kilkenny and Laois. Today, the five members of the Hickey family are farming 2,618 acres (1,923 owned) across Ireland and will milk 2,200 cows in 2019 over nine milking platforms.

“We haven’t a leaving certificate or a degree between the five of us.

"However, our parents made 12 land purchases during their lifetime and we were nearly always present during meetings with banks, solicitors and auctioneers so we knew what was going on.

“We learned the importance of financial discipline and work ethic early on. Plus, we have a very positive father.

“Growing up, he used to tell us everything was possible if you were prepared to work for it.

"We were also fortunate to marry very supportive women who are very hands-on so the team has grown,” Pat said.

Farming philosophy

“We feed silage in winter and try and feed as much grass as possible during the grazing year and fill any gaps with meal.

"We normally feed around 700kg to 800kg of meal per cow but it was a lot more in 2018 due to the weather. We had a feed crisis in 2018 but it wasn’t a financial crisis,” Pat said.

Most of the cows are Jersey crossbred but Pat says the herds are moving towards being more and more black and white. For the midlands farms, milk production per cow is around 460kgMS/cow or 1,200kg/ha.

When we moved to Westmeath first, we used to run a higher stocking rate but we found performance wasn’t as good

“Our policy is to stock the farm at around one cow to the acre. Dad used to say that if you do this you’ll never be under pressure.

"When we moved to Westmeath first, we used to run a higher stocking rate but we found performance wasn’t as good. The average stocking rate on the milking platforms for 2019 will be 2.67 cows/ha. We don’t chase the last 3% or 4% out of the farms. Instead we think it’s better to replicate what we’re doing on another farm.”

Pat says the next challenge for the business will be around people, as any future growth will be managed from a distance. At the moment, there is an average of 180 livestock units per labour unit across the farms. He says the majority of the machinery work is contracted out.

Debt

The Hickeys are currently operating at a 50% debt to equity ratio across the whole business. Average debt levels are around €5,000 per cow. About half of the debt is on a fixed interest rate for a three- to five-year term.

He says they operate on the principle of making a net profit of 15c/l and producing 5,000 litres of milk per cow. At their stocking rate, this is a margin of €2,000/ha and this is what is available for drawings, tax and paying back debt.

It really focuses the mind when you have to pay for something out of cash, so we don’t go over the top on buildings or machinery

He says their system of farming is robust and they rarely make less than 15c/l profit. Even in 2018 they made a net profit of 14.8c/l, while it was 21.8c/l in 2017. Total costs in 2017 were 19.2c/l while they increased to 24.6c/l in 2018.

Pat says that they only ever borrow money for buying land. All other investment is financed through cashflow.

“It really focuses the mind when you have to pay for something out of cash, so we don’t go over the top on buildings or machinery. After buying a farm, we prioritise building a good milking parlour and roadways. We have built five greenfield parlours. The lads’ preference is for a 24-unit herringbone and run 10 rows through this. If the farm will milk more than 10 rows, then we go for a rotary. After that, we build cubicles and usually roof them.”

A general view of the large crowd that attended the Positive Farmers Conference in Cork. \ Donal O'Leary

When assessing an opportunity, Pat says they will walk the farm and then meet up as a family to discuss their options. The average cost of a new investment is €13,000 per cow, including the land, cow and buildings. The return on capital is 6.6%. Pat says they have walked away from more farms than they have bought as they have strict affordability rules.

“My father always says that if debt keeps you awake at night don’t do it. We know how much we can afford to pay for a new block and we generally don’t go over that. That’s what probably triggered our initial move to the midlands as land is cheaper there.

“What we probably didn’t factor in is the friends for life that we’ve made since we moved to Westmeath. While we’ve had ups and downs along the way, the ups definitely outweigh the downs. If our children get half as much enjoyment from life as we do from farming then they’ll have great lives,” Pat said.

Cow efficiency

Also speaking at the conference was Waterford farmer Oliver O’Gorman. Along with two brothers, Oliver has grown their farm from 90 cows in 2009 to 760 cows in 2019. Oliver is a member of the Deise 1250 discussion group and in 2016 and 2018 they undertook a project looking at the efficiency of the cows in their herd.

Oliver said that as they have expanded rapidly they have kept nearly all cows, but now that the herd is settled they will be looking at the efficiency of their cows more. The parameter used for measuring efficiency is kilos of milk solids per kilos of liveweight (LWT).

Oliver O'Gorman, Ballymacarbery, Co Waterford, speaking at the Positive Farmers Conference.

Oliver said that at the same level of milk solids, for every extra 100kg of liveweight, feed eaten increases by 0.25tDM per cow, which is worth about €50/cow.

Oliver said there’s a big difference in cow efficiency within the group and even within farms.

Within his own herd, the average was 0.84kgMS/kgLWT. He said that the range was big, with the top 10% at 1.08kgMS/kgLWT. These cows weighed 505kg and produced 547kgMS/cow. The bottom 10% had an efficiency of 0.64kgMS/kgLWT. They weighed 618kg and produced 393kgMS/cow.

The difference in value of milk solids produced and extra feed eaten between the groups was €750/cow.

The top 10% of cows had an EBI of €128, with a maintenance sub-index of €40. While the bottom 10% had an EBI of €100 and a maintenance sub-index of only €9. Oliver said the target for his herd is to produce 500kg of milk solids from a liveweight of 500kg. He suggested that further investigation of cow efficiency measures is warranted.

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