The focus was on production rather than profit. The operation had crept up to a DairyNZ System 5 with more than $2/kg milksolids (MS) spent on imported supplements alone.
“Our business was sick,” Alan says. “We were making all this milk, but had a massive high cost structure. We were making milk from money, not money from milk.”
Despite growing up and working on the farm during his childhood, there had been significant changes in the industry during his time away.
Farming has become a complicated business model with various operation systems and multiple levers to pull, Alan says.
“Cows used to eat grass, there was no palm kernel, nobody did split calving or had HerdHomes – the systems have changed so much from my perspective.
“As NZ farmers, we certainly make way more milk than we used to, per cow, per hectare and in total, but do we make more profit compared to years ago?”
To get up to play with the latest in the dairy industry Alan completed the PrimaryITO Level 5 NZ Diploma in Agribusiness Management.
He does a lot of reading and research, attends discussion groups and industry events and has a good networking group of farmers.
“I’ve come in with limited knowledge and no preconceived ideas. Farmers are happy to share with you and there is a lot of free advice.
Two generations – Les and Alan Syme.
Molasses and distillers grain have since been dropped out of the system. Last season Alan planned for the forecasted El Nino summer and planted 23ha maize and 30ha chicory.
“As it turns out it was a mistake. It was El Raino for us. All those crops I committed to grew brilliantly, but so did the grass, so they became expensive exercises.
“My mentality was crops are a cheap supplement. But they’re not as cheap as grass. When the grass is there nothing can compete with it.”
Despite growing and harvesting an extra tonne of pasture thanks to the regrassing programme they still weren’t getting pasture allocation and residuals right, Alan says.
Alan had budgeted on doing 300,000kg MS with the drop in imported supplements. But a cold winter, a cold spring, adaptation to change, some management issues and facial eczema problems dropped milk production to 252,251kg MS.
His farm working costs remained high at $5.20/kg MS because of high labour costs and capital expenditure on the farm, on top of falling well behind the budgeted and targeted production.
The capital expenditure was unavoidable. Alan has continued to put funds into capital improvements over the past few seasons to improve infrastructureto suit the larger milking platform.
Some of the water lines were still 15mm when he came home, some of it was galvanised pipe, and it couldn’t cope with the increase in cow numbers.
“When I turned up it was madness, there were water leaks everywhere. We had to run three herds all year round and we couldn’t put certain herds on some blocks together because of water supply.”
They were also carting calves and milk to two different calf sheds that were both more than 1km away in either direction from the farm dairy. It was all an inefficient use of labour and time.
“Why is everyone trying to replicate the UK where about 80% of farmers wouldn’t make any money without subsidies.”
Alan organised a new water system including storage tanks and new water lines put through the entire farm with shut off taps, loops and additional troughs.
He centrally relocated and added on to an existing calf shed and is working his way through the farm to re-fence paddocks, and widen and reposition gateways and races to cope with the bigger herds.
This season he hopes he will be able to reduce capital expenditure costs and bring farm working expenses down to about $3/kg MS, excluding drawings.
He does not plan on any regrassing this season, but may have to if the pasture damage is significant in what turned out to be a wet Waikato winter.
As a result of the summer growth last year and not having to feed out in autumn, Alan had 1100t maize silage in the bunker at the start of this season, which will automatically save $140,000 in cropping costs from his farm working expenses for the 12-month financial period.
Alan still put on capital fertiliser last year, but with high average Olsen P levels and the fertile Tirau Ash soil he will be able to go without this season, saving another $40,000.
Another key to dropping his farm working expenses is labour. Appointing new contract milkers this season at a more viable rate is already making a big difference to the bottom line, he says.
Finding contract milkers who aligned with his journey to a more sustainable system was important to Alan.
Contract milkers Tom and Ruth Jeyes were 2IC on the farm last year. They are onboard with the pasture-first concept and are on the same page as Alan to reduce imported supplements in the system.
Tom and Ruth were surprised to see what was happening on some NZ dairy farms when they emigrated from England two years ago.
The pair couldn’t understand the move towards intensification on NZ dairy farms.
“Why is everyone trying to replicate the UK where about 80% of farmers wouldn’t make any money without subsidies.”
In the UK, there are a percentage of farmers converting to traditional NZ pasture systems and while the farm’s milk production and income would immediately drop, the profit margin improved, Tom says.
“People have this false idea that more milk is more money. People have to remember that every dollar spent has got to earn you money.”
To improve pasture utilisation, Alan has bought a C-Dax pasture meter. They measure the farm’s cover every week and use the Minda Land & Feed app to make supplement decisions based on what is in the paddock and what is being left behind.
Grazing to 1500kg DM/ha residuals and protecting pasture through good management practices is a key goal.
Alan is planning on increasing nitrogen this year from historical levels of 100 units to 140 units a hectare as a cheaper source of feed.
He has also highlighted an opportunity for increased pasture harvested through better use of effluent irrigation. They irrigate effluent over a 50ha area, but it will be applied more strategically this season.
Having efficient contract milkers onfarm gives Alan the flexibility of keeping his weekends free for family. Alan and his wife Liz live on the Kaimais with their four young children, and Alan travels 30 minutes to the farm from Monday to Friday.
“It is a choice that I made when I came back farming so that I could have time with my kids. I pay a premium for it, but my family are more important to me than the farm.
“I was also used to 12 weeks holidays a year as a school teacher, so working seven days a week can’t compete with that.”
There is no silver bullet to creating a more sustainable business overnight and it will take several seasons to turn it around, he says.
“I look back and what we were doing was not sustainable. Some decisions were good and some were not, including my decisions. They all have a knock-on effect and you have to deal with the consequences.
“I don’t want to pretend I’m a great farmer, I’m not currently. We have lots of problems and areas to improve on, but hopefully I am learning from my mistakes and improving the operation to be better than before.”
Related tables: Mataora-Dairy-tables.pdf
FARM FACTS
Owner – Alan Syme, Les and Gwen Syme
Contract milkers – Ruth and Tom Jeyes
Location – Tirau, Waikato
Area – 220ha effective
Cows – 730 Friesian crossbred
Breeding worth-production worth – 75-86
Farm dairy – 54-bail rotary, in-dairy feeding, milk meters, ACR, weigh scales, auto drafting
Nitrogen leaching 2014-15 – 37kg N/ha/year
