Six years into their dairying career 50:50 sharemilkers Cole and Ginny Groves are facing their toughest season yet as the near-perfect storm of drought and low milk prices collide.
On February 25 the tap was turned off on the water Maze Farm receives from the Opuha irrigation scheme which meant plans C and D had to swing into action.
They were already using plan B – it came with the payout drop and lower advance rate payments and then as drought began to really bite.
With little respite from the dry weather by early March they’ve had to send their 190 in-calf, rising two-year-old heifers more than 420km away to Winton in Southland, get their culls off earlier than usual, reassess winter feed budgets and accept this season will put them two years behind in their equity growth plans as their costs go up and production doesn’t achieve their budgets.
“That’s the problem with a drought on top of a low payout – you can cut costs to a certain extent because of the low payout but in a drought you have these extra costs you just can’t avoid,” Cole says.
They’re faced with higher grazing costs and extra cartage and are working through the options for how they’ll best feed cows that are dried off early given crop yields on the runoff have been reduced by less irrigation.
The Opuha dam in early March – water for the irrigation scheme was cut off on February 25 when the dam reached its lower limit.
Sharing information with staff helps bring the whole team on board with the cost-saving culture, Cole says.
“If they understand what’s happening with the milk price, where our budgets are at and what it means to the business they understand why it’s important to look after gear, why we haven’t got that second tractor.”
Cole and Ginny have also agreed to be a DairyNZ Tactics for Tight Times farm, opening their farm and their books to others in the district on a regular basis through to spring.
The couple say they’ve fared better than some on the Opuha scheme thanks to their groundwater consents on the milking platform and at the runoff that they’ve never used before.
They’re consented to take 31 litres/second but even the wells were stressed by the very hot, dry conditions this summer and have been running at closer to 12l/second.
They started drawing on the groundwater after the Opuha scheme went onto 50% restriction in January. It had been on 25% restriction since the start of December.
But groundwater came at a cost – a cost they hadn’t budgeted for in terms of electricity pumping costs. Meanwhile they still had to pay for their scheme water as if it was running to full capacity.
As the Opuha restrictions took hold and well water also declined the decision was made to move water allocated for the adjacent runoff to the milking platform.
It helped but the very hot days followed by high night temperatures meant they probably didn’t see the full benefit.
The water stress has highlighted gaps in K-line irrigation coverage this year and the plan is to GPS where lines should be moved to.
About 95ha is under K-line in areas not reached by the four pivot irrigators.
The farm is still very much in a development phase with a high percentage of older pastures a limiting factor along with the 42-aside herringbone and distances of up to 1.8km from the furthest paddocks to the dairy.
“In a good season we can get the drymatter but you have to look at the quality of that feed too. It’s hard to get cows to eat those older species right down whereas in the paddocks we’ve regrassed they graze down to the right residual and it’s better quality,” Cole says.
Regrassing is therefore a priority on the farm with a summer rape crop used on 15ha to enable a double spray and good weed and old species kill.
They’ve normally got 6 tonnes drymatter (DM) a hectare out of the rape but this year the heat pulled that back to 4.5t DM/ha.
This season they’ve also had about 13.5ha where they could get just two grazings. It had been prepared for earthworks for a storage pond for the Opuha scheme that was then moved to the other side of the Te Ngawai River.
The area has become part of their response to the difficult season with oats sown so that 100 body condition score (BCS) four cows can be dried off at the start of May and wintered at home, taking the pressure off the lease block crops that have been affected by the dry.
‘It’s hard to get cows to eat those older species right down whereas in the paddocks we’ve regrassed they graze down to the right residual and it’s better quality.’
The cows on oats will also be fed balage and hay and can be fed grain through the farm dairy to minimise wastage and help lift condition.
Cole says the poorer pastures mean supplementary feed levels, at 800kg DM/cow, are probably higher but to give more certainty over their costs they contract feed early.
Palm kernel was contracted before spring while a new in-dairy grain feeding system was installed in time for this season too.
The grain was bought on a three-year contract with a local arable farmer for a three-year set price of $400/t and comes straight off the header.
Payments are made on a monthly basis over a full 12-month period, easing the pressure on cashflow.
This year they have 450t and next season will take 475t.
Cole says long-term relationships are important to the couple so they haven’t considered backing out of the contract.
Those relationships are even more important in times of both input and product price volatility.
Fodder beet is also used as a supplement in the spring and autumn on the milking platform and is mostly lifted from the support land where it’s grown. On occasion they’ve grazed in there too.
They begin transitioning cows onto it on May 1 feeding it out in the paddock and by the end of May cows can go straight to their winter ration of 8kg DM/cow without problems.
In a typical year the crop yields at 25t DM/ha which dilutes the higher establishment costs so that fed to cows in situ it’s 10c/kg DM.
The economics compared with other supplements and good cow response mean they’re planning to sow a greater area later this year and considering growing it on the milking platform.
Cows were being condition scored from March so lighter cows could be put onto once-a-day milking or dates set for them to be dried off early so they reach their BCS targets at calving.
Some rain during March meant while the dam still wasn’t supplying water, river levels were high enough to support irrigation for a couple of days here and there and groundwater takes picked up a little.
They were watching crop yields on the support block and were finalising plans E and F so they were ready to act in any eventuality.
In a year like this planning and thinking through the what-if scenarios is critical – taking the alternative approach of hoping or putting your head in the sand could make problems a whole lot worse and push this season’s anguish into next season, Cole says.
“The big thing is to talk to people.”
Key points
Location: Pleasant Point
Owners: David and Jayne Timperely
50-50 sharemilkers: Cole and Virginia Groves
Area: 264ha milking platform, (150ha owned and 114ha leased)
Cows: 900 Friesian and Friesian-cross
Production: 360,000kg MS
Supplement: 800kg DM/cow including palm kernel, silage and 420kg DM/cow grain
Farm working expenses: $2.64/kg MS
Farm dairy: 42-aside herringbone
