Increased butterfat and protein levels, coupled with a lower feed rate, delivered extra cash for John Oliver’s dairy enterprise last year.A review of physical and financial benchmarking by Dairylink Ireland adviser Aidan Cushnahan shows that average butterfat levels stood at 4% last year, up from 3.90% in 2019, while protein levels rose from 3.25% to 3.34%.
Increased butterfat and protein levels, coupled with a lower feed rate, delivered extra cash for John Oliver’s dairy enterprise last year.
A review of physical and financial benchmarking by Dairylink Ireland adviser Aidan Cushnahan shows that average butterfat levels stood at 4% last year, up from 3.90% in 2019, while protein levels rose from 3.25% to 3.34%.
The improvement in milk quality was worth an extra 0.5p/l on John’s milk price, which equates to an additional £3,352 over the course of the year.
John has been selecting sires based on breeding values for milk components and the introduction of 30 first-lactation heifers helped contribute to higher butterfat levels from September to December 2019, as Figure 1 outlines.
Figure 2 shows that protein levels last summer were considerably higher than the year before and this is being put down to getting more, better-quality grazed grass into cows’ diets.
Better use of grazed grass, as well as higher quality silage and improved herd fertility, allowed John to reduce his average feed rate from 0.34kg/l in 2018 to 0.29kg/l last year.
Aidan points out that feed rate on the Oliver farm is now well below the Northern Ireland benchmarking average of 0.32kg/l. “Had feed rates remained at 0.34 kg/ l in 2019, then an extra £7,708 would have been spent on feeding the herd,” he said.
Table 1 shows that overall milk output was up by 81,748l, or 14%, last year, due to a 7% increase in herd size and a 6% rise in average milk yield per cow.
All of this combined helped John’s financial margins in 2019. He monitors margin over concentrate (milk cheque minus meal bill) on a monthly basis and it averaged £1,470/cow last year.
This is up from £1,410/cow the year before and is an impressive result, given that his average milk price dropped from 28.9p/l to 26.9p/l year-on-year.
Finances
Aidan’s financial benchmarking exercise includes a breakdown of production costs for each Dairylink farm. For John’s business, concentrate costs are the largest single expense, equating to £44,358 or 6.6p/l last year.
Fertiliser and lime totalled £12,969 (1.9p/l), contractor costs came to £12,543 (1.9p/l) and £10,215 (1.5p/l) was spent on repairs and maintenance. Excluding loans, drawings, capital costs and tax, John’s farm working expenses equated to £156,791 (23.4p/l) last year.
Total income on John’s farm in 2019, excluding CAP payments, was £204,995. A standardised figure of £30,000 is used for personal drawings on all Dairylink farms, which means the total amount available for loan repayments, capital expenditure and tax last year was £18,204.
What’s next?
Since converting to dairying in 2015, John Oliver has put significant investment into improving land for grass production and developing grazing infrastructure.
However, he is now in the process of moving from a block autumn-calving system to a spring profile, so that he can make better use of these investments.
This is because measuring data suggests that grass is underutilised on the farm from mid-summer onwards when autumn-calving cows are dried off.
Dairylink adviser Aidan Cushnahan also points to margin over concentrate (MOC) figures, which show favourable results from April to June, compared to December.
As Table 2 shows, although MOC in December 2019 (£6.20/ cow/ day) was higher than that recorded in May (£5.52/ cow/ day), producing more milk in the spring could yield a higher margin.
“For example, if the average yield in May had been 30l/cow/day and all other factors had remained the same, the resultant MOC would have been £6.85/cow/day,” Aidan said.
Cash impact
Moving calving back a few months will reduce the amount of milk produced in 2020 and impact cashflow in the short-term. Financial projections indicate it should be possible to overcome this deficit within 18-24 months.
“Important factors in achieving this include variations in milk price, maintaining a compact calving pattern, upholding high feed efficiency and not compromising milk yield and solids output,” Aidan said.
To assist with this, John has recently purchased some replacement heifers. Genetic indices supplied with the stock showed an average EBI of €166, milk yield of +175kg and combined fat and protein yield of +20.8kg.
The plan is to introduce these animals into the milking herd in 2021.
Increased butterfat and protein levels added £3,352 to John Oliver’s milk cheque in 2019.A further £7,708 was saved by more efficient use of concentrates.John is in the process of moving from an autumn to spring-calving profile.He plans to maintain milk output while making better use of grazed grass in the summer. Read more
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