Friday, March 29, 2024

Make grass sexy again

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Kiwi farmers have been following some dangerous trends of their United Kingdom counterparts. Farm consultant Richard Snell told Sheryl Brown farmers needed to get back to loving pasture.
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New Zealand dairy farmers need to curb their spending culture by reviewing every product and action taken within their business, farm consultant Richard Snell says.

Doing a thorough investment analysis and understanding the physical and financial implications of every decision is pertinent, particularly in the current dairy downturn.

Richard returned to NZ last year after six years working as a farm consultant with English and Irish farmers, educating them on the NZ pasture system.

He has been alarmed at some of the practices from the United Kingdom that have infiltrated the NZ dairy industry.

Farmers in the UK were often getting sales-based advice based on commission, which was a flawed system and a dangerous trend that has started to creep into NZ, he says.

Kiwi farmers were being sold products in isolation, from blanket weed sprays, to teat seal, housed barns to CIDRs while the advice doesn’t always consider the overall operation.

“The implications of that spending longterm, to rein that in again is hard. I’ve seen it in England and the damage it’s caused to farm businesses.

“It’s okay to say no. You have to spend money to make money, but spend money in the right areas.”

Farmers should work closely with their rural professionals to set up a plan for the whole farm operation, considering everything from physical onfarm targets to strategy, finances and human resources.

Richard works as a consultant for 30 farms, with varied systems and cost structures. The 32-year-old was raised on a dairy farm at Te Awamutu, where his passion for the industry started. He studied agricultural science at Lincoln University before working as a consulting officer for DairyNZ.

He then set out to be an independent farm consultant. He was offered an opportunity to speak to visiting English and Irish farmers in 2009 and was later encouraged to set up a consultancy business in the UK.

Richard worked with a vast range of farming systems, from early adopters of the pasture system, to farmers who had never grazed grass before.

A lot of UK farmers have grown so reliant on bought-in supplement that one farm owner Richard worked with genuinely believed cows would die on a grass system with no grain.

It was alarming NZ farmers were getting trapped into that same mental reliance on bought-in supplement, Richard says.

When he came home he was shocked by the huge increase in the number of installed in-dairy meal systems.

NZ farmers have a strong desire to expand and many people have capitalised by building feedpads, barns or installing in-dairy meal feeders to increase production rather than buy more land.

Drought and environmental pressures were also valid reasons to install meal feeders, but farmers had to be careful not to rely on feeding meal.

The problem was farmers were struggling to turn the meal feeders off and focus back on pasture, he said.

“That will be one thing I’ll be very strong with NZ farmers on. I’ve seen the other side and it’s a hard problem to fix.”

Another dangerous trend that has crept into the NZ dairy industry was calling nitrogen a fertiliser instead of a supplement, and not understanding fertiliser requirements, Richard says.

NZ farmers have to regain their competitive edge by understanding their soils and maximising the pasture they can grow and harvest onfarm.

“Grass needs to become sexy again.”

Farmers in the UK who changed from a high-input system to a pasture system found a lot of enjoyment in going out and measuring grass, Richard says.

That’s where NZ farmers needed to get back to and stop relying on supplements to bail them out when they get pasture management wrong.

“You don’t have to be a rocket scientist to be good at pasture management but you do need the will. The will to go out and measure grass, to do feed budgets and use tools like the spring rotation planner to hit key cover targets and round lengths at the right date.”

But if people get more enjoyment out of a high-input system then they should continue to do that.

“People are allowed to farm the system they want to farm and farming is allowed to be fun.

“Any system can be profitable, but you have to very skilful at pasture management, financial management and cost control. Those are the non-negotiables.”

If people do want to change their farm system and decrease the amount of bought-in supplements they have to give their business time to adjust, he says.

“Farms are big things and they’re actually quite slow-turning ships. To turn around momentum takes a lot of support and there are going to be dark days.”

People had to be careful about not being production-focused, but become immersed in their budgets and make realistic goals. They need to know where to cut costs and where to make money, he says.

“The ability to spit cash out of your budget is crucial and it’s quite a skill.”

It’s not good enough that only one partner pays the bills and the cashflow budget is not discussed on a regular basis. Farmers need to have a strong emphasis on their profit margin and take ownership of actual versus budget cash flows.

Having realistic targets and achievable debt servicing is also paramount.

People who have converted dairy farms in marginal country, for example, have to accept they can’t match the grass grown in prime land and have to tailor a system to suit because the land is less forgiving than traditional dairying areas.

People have to go into those farms with realistic production targets and a stronger balance sheet.

All farmers should be trying to drive down their farm working costs to be able to cope with any payout.

“I believe a low $3 farm working expenses cost structure is sustainable and repeatable. It’s a much lower cost of production than my best English or Irish clients, which makes New Zealand still a special place to dairy farm to me.”

NZ farmers have to remain low-cost producers to be competitive in the global market, because farmers in Europe are not going to slow down their milk production any time soon, Richard says.

“It’s emotive. They’ve been told for 20 years they can only sell 500,000 litres but their farm can do a million.”

For the smaller owner-operator a relatively easy expansion was quite lucrative and there will be some good gains in the short term for some European farmers.

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