Wednesday, April 24, 2024

Pushing production to dilute costs

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Higher production on grass feed is the key to production costs on Rotopai Farms in south Wairarapa. Stewart Weatherstone told Martin Freeth his production costs could fall to $3.15/kg milksolids next year if milk volume can be increased 9%.
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Stewart Weatherstone, and wife Ally, with his parents Bryan and Sherry Weatherstone, farm 1450ha in the lower Ruamahanga Valley. They have rapidly scaled up in recent years, confident of having the water and the grass needed to feed more cows and to produce milk at costs significantly below the Fonterra payout, even at its current level.

Rotopai milked 2850 cows in five herds at the peak of 2015-16. That number is up from 2100 three years ago, after expanding the milking platform and adding a second, large dairy. The Weatherstones’ $2.4 million investment in an 80-bail DeLaval rotary dairy – the cost included extensive site preparation, a large effluent pond and a road underpass for cows – is paying off in increased milk volume and higher levels of productivity.

The dairy, in operation since July 2013, was built on land acquired two years previously from an adjacent sheep farmer. Irrigation across much of this land has  increased the size of Rotopai’s milking platform to 730ha.

“We decided that to really farm economically, we needed to push it more,” Stewart says.

He planned the location and size of the dairy to make the most of Rotopai’s layout – it straddles Lake Ferry Road south of Martinborough and extends across low rolling hills and flat to the Ruamahanga River – and to reduce walking time for cows. Jerseys are favoured for their mobility and their relative suitability to the farm’s light soils. The remaining 25% of his cows are Kiwicross.

Three of Rotopai’s five herds use the 80-bail dairy, with 85% of the cows on twice-a-day milking through most of the season.

That’s a big step up from the previous one-dairy operation where more than 60% of the cows were coming in once-a-day only and some were walking 6km each way. The older dairy is a 60-bail DeLaval rotary.

The big driver for production growth on Rotopai is more grass on more irrigated land. This season, 62% of the 730ha platform has had irrigation with water from the Ruamahanga River, which runs 10km along the property’s north-western boundary.

“The soil here is generally good with naturally high pH but we definitely need water to get the productivity we’re aiming for,” Stewart says.

South Wairarapa tends to extreme dry in summer, and the farm’s irrigation take can be limited by water depth in Lake Ferry downstream and river flow in the Ruamahanga upstream. Stewart says his irrigators have been turned off only one week so far this season, and three weeks during the previous season.

“For us, it is about getting all the grass we can and as much production as possible up till Christmas and thereafter, making careful decisions on feed allocation and the size of milking herds dependent mainly on pasture growth.”

The Weatherstones strive to make Rotopai as self-sufficient in feed as possible, buying in limited amounts of barley grain only and never palm kernel. They make some grass silage on paddocks the furthest away from the milking platform.

The farm has extensive grazing off the platform – about 750ha including a leased block near Greytown – and this is used mostly for wintering animals and raising herd replacements. The self-sufficiency theme applies here too, with Rotopai growing around 80% of its replacements.

Also critical to Rotopai’s performance is its efficiency at milking time, thanks to the 80 bails, and to the skill and dedication of farm staff. Staff turnover is very low by industry standards for the 10 full-time employees and two part-timers. The two longest-serving staff, Byron Hegglin and Brad Legge, have been on the farm for 12 and 10 years respectively.

Stewart and Bryan make a real effort to treat employees like extended family members, supporting them to attain industry qualifications and providing plenty of on-the-job responsibility at an early stage. In return, their staffing ratio, at 285 cows per full-time employee in 2015-16, is well above industry average.

In fact, afternoon milking in the big dairy is done by one person.

“The older guys said we couldn’t do it but we now have 1100 cows milked by one team member in two hours,” Stewart says. A second person is rostered on in the morning, mainly for safety reasons.

Stewart has a no-nonsense approach to recruiting and developing young employees. “You’ve got to really want to come into the dairy and to enjoy taking responsibility,” he says.

Seamus Murnane is a good example.

At 19 he is effectively one of Rotopai’s herd managers and the Weatherstones are supporting him through a Lincoln Diploma of Agriculture by distance learning through nearby Taratahi Agricultural Training Centre.

Staff also have excellent scope for recreational fishing and hunting, with the Ruamahanga River on one boundary and deer-stocked Aorangi Forest Park on another. Remoteness is not an issue, with Martinborough 15 minutes up the road from Rotopai, Pirinoa Village much closer and two thriving primary schools nearby. Stewart is chairman of the Pirinoa School board.

The Weatherstone family has been here four generations, since 1931 when Bryan’s grandfather bought an initial 40ha and joined the Lower Valley Co-op. Bryan put the first irrigation on in 1972 when the property was 80ha. Today’s Rotopai is an amalgamation of 11 farms acquired or leased over the past 40 years. Bryan refers to all this as “a journey, not a race”, each step taken with a focus of maximising the value of available grass. Father and son are strongly of the same mind on this.

Stewart returned to the farm with Ally in 2000, after completing a Bachelor of Applied Sciences at Massey University and spending some years’ working and travelling overseas. The couple now have four children. On his return, he wanted to dispense with an existing bull beef operation alongside Bryan’s 630 cows, and instead dedicate Rotopai entirely to dairying.

This season he expects to produce 1.1 million kilograms of milksolids (MS) at a production cost of about $3.40/kg MS.

The unusually warm Wairarapa autumn is putting some pressure on Rotopai’s herds with a much higher than usual incidence of facial eczema, but Stewart is sticking with his target. In 2016-17, he will be aiming for 1.2 million kg MS, and that should bring the production cost down to between $3.10 and $3.20/kg MS.

More grass will be the main driver, with plans to have 75% of the platform under irrigation while maintaining the farm’s long-established stocking rate at about four cows a hectare. Putting irrigation across the whole platform would be uneconomic, Stewart says.

“It would make more sense to buy supplementary feed in for the very few times you would actually need so much water.”

Lower Fonterra payouts are a spur for the Weatherstones to pursue further onfarm efficiencies although these will probably be at the margin of today’s operation.

“Yes, we’ll work on cost of production by refining the current system however we can,” Stewart says.

“If we can grow more grass, it might require higher capital outlays (on irrigation) but we certainly reduce input costs over the long term.”

Nothing in today’s environment is going to change this fourth-generation dairy farmer’s basic approach.

“You’ve got to do everything in your power to increase production as cheaply as you can. There’s no point in us, for instance, going back to 2100 cows. The best way to improve our profitability is to keep pushing up our productivity.”

Long-term, he expects the payout to average between $5 and $6/kg MS.

“The payout always has and always will go up and down, but we’ve always managed to grow.”

PPP applause

Rotopai Farms is an excellent example of dairying best practice, Shane McManaway, chairman of Platinum Primary Producers (PPP) Group says.

“Stewart and Bryan Weatherstone exemplify the foresight, innovation and hard work that make New Zealand agriculture so competitive and successful,” Shane says.

“We applaud their commitment to constantly improving productivity on Rotopai while maintaining the highest standards of animal and environmental management.”

Rotopai was featured during a PPP Conference held in Wellington in March.

PPP members visited the property on a field trip that also included the nearby Turanganui Romney Stud of the Warren family.

The PPP membership of about 130 farmers and other agricultural professionals from throughout NZ and Australia meets annually to discuss key issues affecting the primary industries of both countries.

“Visiting Rotopai and hearing Stewart’s enthusiasm for the future is inspirational for others in the dairy sector during the current period of reduced payout,” Shane says.

Stewart is a PPP Group member.

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