John Roche questions part 2

Published 20 June 14

“Eat the elephant in small pieces” is piece of advice the advice Dr John Roche gave while answering questions at DairyCo’s grassland meetings in the north of England, in the spring. In the second part of this Q&A series, John answers questions on management and infrastructure issues.

 

How does the 5% of milk solids payout rule in NZ, in relation to concentrates fed, convert into ppl?

The 5% of payout rule in NZ recommends you can pay up to 5% of the price you are receiving for a kg milk solids for each kg of supplementary feed, and still make a profit (it assumes all feeds have 11MJ metabolisable energy). This is equivalent to paying 60% of the milk price in litres (eg for a 30p milk price, you can afford to pay 30 x 60% = 18p/kg supplements. You multiply this by 1,000 to get price/t. This rule takes the cost of feed and feeding into account, and assumes that pasture is not being wasted (ie grazing residuals are 1,500-1,000kg DM/ha).

Unless grazing residuals are well below 1,500kg DM/ha, you cannot afford a ‘tactical’ top-up of supplement when the milk price is low and supplement when the price is high. If residuals without supplementation, for example, were to decline to 1,200-1,300kg DM/ha,  the price at which supplements would be financially viable would be much greater (100% of milk price)

Below are two tables demonstrating what the “5% rule” and the “60% rule” mean at different MS and milk price levels, and an example to show how they are calculated.

“5% rule”

Milk solids price, £/kg MS

“5% rule” £/t of supplement

2.50

125

3.00

150

3.50

175

4.00

200

4.50

225

 

Example – At £2.50 a kg of MS (equivalent to £2,500/t), under the 5% rule you can afford to pay £125/t for supplement and still make a profit (5% of 2,500 = 125).

“60 rule”

Milk price ppl

“60% rule” £/t of supplement

20

120

24

144

28

168

32

192

36

216

 

Example – At 20ppl milk price, under the “60% rule” you can afford to pay £120/t of supplement and still make a profit. (60% of 20ppl = 12p, 12p/kg becomes £120/t).

Note: Although the rules assume a certain level of profit from the additional feed, UK and Irish data show that the total cost of feeding more supplement is 50-60% greater than the cost of the supplement (ie costs which would not normally be associated with feeding also increase). Therefore, the 5% milk solids or the 60% of milk price rule are a breakeven cost for feed on an average dairy farm. You must buy feed for less than these prices to make money.

 

What are your top tips for a young person entering dairy farming today?

  • The most important thing, in my opinion, is to find good mentors – financially astute, successful dairy farmers. I have been very fortunate to have had wise counsel most of my life. I can’t say I always listened. But when I didn’t, I usually wished I had
  • Define your goals and write them down. Re-assess regularly and “eat the elephant in small pieces”
  • Learn the difference between “need” and “want”. If you buy what you need in your 20s, you’ll be able to afford what you want in your 40s
  • Take qualified risks when you’re young. Use compound growth to your advantage
  • Pick your partners wisely (both business and life partners). Ensure that everything is considered in contracts. There is no faster way to destroy a family or a friendship than to go into a partnership without assets, responsibilities, and expectations legally contracted. By writing it down and spelling it out, all parties will have to consider the proposition and ‘surprises’ are much less likely
  • Don’t overestimate the number of friends you have. If you’ve got more friends than fingers, you’re counting acquaintances. Think about it – “who has got your back”. Friends are like parachutes; if they are not there the first time you need them, you are unlikely to need them again!
  • Take time every week to self-assess. Ask people to judge your skills set. Look to improve your skills in areas that you are not strong. Many receive advice; only the wise profit from it
  • Remember always: “no man is an island”. If you need help, seek it. Failure to do so because of pride, is stupid!
  • Honesty is non-negotiable – if you have to consider whether it is right or ethical to proceed, it very likely isn’t
  • Have a hobby – but in your growth phase, you’re allowed only one hobby AND that hobby should help you stay healthy (both physically and mentally)
  • Don’t sweat the petty stuff!
  • Above all else, have fun. We’re here for a good time, not a long time, and the sun cannot shine every day.


When starting from scratch what type of cow track is most appropriate for 200 – 250 cows? Concrete sleepers or hardcore topped with dust?

Concrete Sleepers – cost has become a bit prohibitive and you need to include the laying cost. However, they are very good for heavy traffic areas, have low maintenance when down and can be moved. But you do need to be aware of stones on the sleepers.

Soil – is okay in the low traffic areas (ie extremes of tracks).

Rubble and dust on top – if it is well laid to start with, there’s minimal maintenance. The design is important and they need good camber and drainage. However, it can be very economical if stone is available nearby.

Astroturf – is great at start. It becomes compacted and slippery when wet after a couple of years. Not always easy to sorce.

 

How far can cows walk per day without losing milk production?

We don’t really know. In theory, you will lose 1 litre of milk when they walk 3km on flat land or when they walk 1.25km on very hilly land. However, when I’ve looked at on-farm data, milk in the vat hasn’t changed despite cows walking between 1 and 4km to pasture. We don’t know the reason for this, irrespectively, further walking requires more energy – they either eat more or they produce less milk.

Long distances, more than 2km from the parlour, also probably reduce the time available for grazing. This reduces DM intake and adds to the loss in milk production.

 

How much milk do you lose by once-a-day milking?

Once-a-day milking reduces milk production by 20% at the time of milking and by 7-10% when (if) you put the cows back on twice a day. The problem is worse for Holstein-Friesian cows and less for Jerseys.

However, a system can be built to be successful on once-a-day, provided cows can be vigorously selected for milk yield under once-a-day system. There are some very good farmers who are very profitable on once-a-day. However, it isn’t a crutch. A poor farmer on twice-a-day, will probably be worse on once-a-day (only observes the cows once a day).

 

If you were dairying in Northern England what system would you practice? Cow size – Concentrate usage – stocking rate?

Obviously, this is only my opinion and I am a grazing enthusiast.

I believe it is far easier for a simple man, like myself, to make money in a simple system. UK Milkbench+ data suggests that the top 25% of farmers in either a seasonal calving grazing system or a more complex all-year-round calving system are equally efficient. However, for the average farmer, the simple system is three times as profitable.

Crossbred cows, approximately 500kg live weight, seasonally calved (50% calved in two weeks and 100% calved in 10 weeks), and supplemented with 300-500kg supplement/cow during spring and late autumn, and wintered on grass silage harvested at home, would be my dream system.

 

From a tenant farmer/ share milker point of view, where the equity lies in the cows, what would be the optimum stocking rate? Should they be aiming to stock according to fodder grown on farm and matching the two, or how far over that line before buying in feed from outside dare they go?

The optimum stocking rate from a cash return perspective is the same as for owner operators. However, there are equity gains to having a marginally higher stocking rate, because of the extra calves born.

 

We have a 60ha platform but a 156ha farm; more cows and zero graze, or less cows and grow silage or wheat to sell?

This really depends on the individual. If your benchmarked performance is in the top 25% of your peers, I think the intensive system could be very profitable. If your performance is not at this level, the more intensive system is likely to undermine the productivity you have.