Saturday, March 30, 2024

A risky business

Avatar photo
Manawatu sharemilkers Duncan and Kim Fraser came third in last year’s Sharemilker-Equity Farmer of the Year competition and picked up an award for risk management. They told Erin Hutchinson the secret to dealing with risk is planning and backing your decisions.
Reading Time: 6 minutes

For lower-order sharemilkers Duncan and Kim Fraser, dealing with uncertainty and risk is just part of farming.
They are in their fourth season on the 172 hectare effective property owned by Des and Marion Webb near Halcombe in Manawatu. Last year they won the Manawatu Sharemilker-Equity Farmer of the Year competition and came third at the national level, also taking out the Triplejump Risk Management Award.
For them, managing risk is not rocket science – it’s about having a plan and executing it. Their “simple” system is based on monitoring their feed wedge, average pasture cover, and cow condition. It has evolved to deal with some system boundaries – no feedpad or standoff infrastructure, two-speed soils, large areas of older pastures, and partial irrigation.
The nature of the soils – the platform is reasonably evenly split between heavy (Halcombe Hill) and light (Ohakea Silt Loam) soils – largely determine when and where that supplement can be fed. Average annual rainfall sits at about 900-1000mm and two-thirds of the platform can be irrigated through a mix of centre pivot, K-line and Southern Cross irrigation. Any supplement used needs to be fed out in the paddock.

Key Points

Lower-order sharemilkers: Kim and Duncan Fraser
Farm owners: Des and Marion Webb
Location: Halcombe, Manawatu
Production: 192,000kg milksolids (MS) (2013-14)
Herd: 440 Friesian cows (445 cows 2014-15)
Supplements: 240 tonnes drymatter (DM) maize silage; 60t DM hay
Support block: 65ha (DairyBase adjustment)
Operating profit: $1.02/kg MS (2013-14 via DairyBase, includes a labour adjustment)
Operating expenditure: $0.98/kg MS (2013-14 via DairyBase, includes a labour adjustment)

The Friesian dairy herd also acts as a source of beef cattle for the Webbs’ wider farming business, taking breeding options like crossing with Jersey off the table.
For the Frasers, pasture is well and truly king. Supplement – nearly all maize silage – is mostly used to buffer the summer, in conjunction with turnips, and early autumn dry. Just over 10% of total feed is imported, placing it in the System 3 category of the DairyNZ classification.
They target 240 tonnes drymatter (DM) of maize silage on-hand in the bunker, of which Duncan estimates about 180t DM is fed out in an “average” year; the remainder is kept up the sleeve to be fed out in early lactation if winter or spring isn’t kind. If not fed out it is simply stored with less maize silage harvested to get the total 240t DM the next season. If the silage bunker is empty coming out of spring, grass silage is harvested from support land to make sure there is feed in the bank to cover summer requirements up to maize harvest.
Kim describes this part of the system as keeping an eye on the big picture.
“People would argue from a cashflow point of view that feed being carried forward is money you have spent and not used in that season. Can you make the cashflow better? Yes, we might take a hit expenses-wise that season, but over a two-year period we’ve probably been the most efficient we could be.”
Duncan says the reasoning is simple – it’s about making sure they have feed for when they need it. Having that feed buffer entrenched in the system means they have the confidence to always fully feed the cows. The focus on managing pasture quality and rigorous monitoring against the feed budget counteracts the risk of feeding out too much supplement.

Regular platemeter walks are an essential part of pasture management.

“A lot of people would say we’re not pushing the system, but I think ensuring you are hitting the targets, you are probably more efficient,” Kim says.
Getting pasture management right is critical for the system – it’s risk with a great deal of upside for both production and profitability. They identify winter as one of the riskiest periods on the farm because of the lack of a feedpad and standoff facilities. The system has evolved to reflect that.
“If we get it right going into winter then we should still reach our pasture targets. If we have an easy winter then we just go into spring in an even better position,” Kim says.
Duncan does regular pasture walks with a platemeter throughout the year, comparing the results against their feed budget and cover targets.
“The pasture monitoring is key, it’s the start of risk management. If you can look forward and can see issues coming up, you can plan in advance. And then you measure again just before it happens – if it hasn’t happened because it’s dry or because it got too wet, then you can adjust your plan,” Kim says.
“You’re never scrambling.”
The pasture monitoring assists them to proactively manage any looming pasture issues – there are no surprises.
“The less drastic the action you have to take, the more likely you are to get to where you want to be,” Kim says.
They stick to the trigger thresholds in their feed budget. While they might hold off a few days if there is rain on the horizon, they won’t wait weeks.
“You do have to be hard and brave. You have got to back yourself, and if it’s the right decision at the time then do it. If you dry your cows off and it rains, never beat yourself up.”
A key strategy is getting cows to peak milksolids production quickly and then sustaining that peak. Partial irrigation and a sometimes fickle summer and autumn rainfall means the system is designed around getting as much milk in the vat prior to Christmas as possible. Having the cows in good condition at calving is critical to achieving that.
Partial season once-a-day (OAD) milking and a progressive drying off approach are in the tool box to drive cow condition with the added benefit of minimising supplement wastage if autumn is wet. The herd goes on to OAD milking when they finish grazing the 10ha turnip crop, usually early March.
“It gives us extra leeway. If we need OAD plus supplement, that still gives us time to get cows up to condition, whereas if we milk twice-a-day right up to the end of lactation then the window to put condition on is heaps smaller,” Kim says.
The progressive drying-off policy is based around cow condition and estimated calving date for the coming season. They split the herd into three calving blocks – early, mid, and late – then on March 1
any cows calving in the early block that are under a condition score of 3.5 are
dried off. The procedure is repeated every three weeks with the condition score thresholds progressivelyincreasing for each calving block.
Duncan reckons these techniques pretty much pay for themselves.
“The first year we started here it took us almost 50 days to get to close to 2kg milksolids (MS) per cow per day. Now, with the cows being in the right condition, it takes 10 to 14 days, tops – and they’re over 2kg MS/cow/day.”
“We might lose a bit at the end of the season but we certainly make it at the start – the easiest time to make milk, the cheapest time. The cows are firing at that stage.”
They ran the numbers on the policies again last season in the face of the high 2013-14 milk payout. Duncan says the $20,000 difference calculated between lost production under the OAD policy and continuing twice-a-day but putting extra feed in is a tiny fraction of overall milk revenue, and cows were in better condition for the next season.

Laying the foundation

Improving the fertility and calving spread of the herd is an ongoing project.
When the Frasers arrived mating length was 16 weeks yielding a 51% six-week in-calf rate and an empty rate that sat between 15% and 17%. Not being able to generate enough home-grown replacements meant carry-over cows were routinely kept to maintain the milking herd size, compounding the fertility problem within the herd.
This season the mating plan involved seven weeks of artificial breeding with shorter gestation-length semen – LIC’s Compact Calving product that yields replacement-level genetics – used for the last 10 days. Hereford and Friesian bulls are rotated as tail-up bulls for a further five weeks. This season the interim six-week in-calf rate is a much improved 67%, achieved without intervention. The herd empty rate from the much shorter mating period is unchanged though the younger cows in the herd have significantly improved reproduction outcomes.
This is the first season carry-over cows have not been kept and with 150 replacement heifers due to calve this spring, the Frasers are hopeful of greater culling pressure on traits other than pregnancy status.

Better systems make better employees

The Frasers employ one full-time staff member onfarm, 18-year-old Jacob Beamsley, and a relief milker.
In terms of human resource risk management, Kim and Duncan were very careful to employ someone they thought would be a good fit for the business – someone who knew what they wanted to get out of the job and recognised the areas where they needed to develop skills.
The Frasers have a farm policy manual for employees outlining processes like the milking plant wash and other day-to-day tasks like colostrum cow management and mastitis detection and treatment. In conjunction with employing the right person, this means the couple are comfortable in the knowledge that even in their absence tasks are done to the standard they prefer.
They involved Jacob in developing the farm’s health and safety plan, which helped with getting buy-in to the safety measures identified as being necessary.

Cover the bases

One of the biggest risks Kim and Duncan Fraser are currently managing is finding the right next step for themselves.
They are planning to move into a
herd-owning sharemilking arrangement
for the 2015-16 season and are determined to find the right one – one that will set them up for their next career step while allowing them to build equity.
Kim says they are not afraid to be particular about choosing a job because it’s a big financial commitment.
“One of our goals was to get ourselves into a position where we were never backed into a corner, having to take a job.”
They hope their success in the Dairy Industry Awards (DIA) puts them well on the way to achieving that goal.
They have made a list of criteria for their ideal job – cow numbers, system, location. And it must eventually help them get their next job.
The Frasers are happy to stay where they are if the financial benefits of 50:50 sharemilking do not match their current circumstances.
Another benefit from their DIA involvement was a review of their business-related insurances by risk management consultancy Triplejump. A big risk for sharemilking businesses is personal injury to the business principals.
Duncan and Kim thought they were covered, but the review found the income protection insurances they had in place were inadequate. The policies they had catered for salaried workers rather than self-employed sharemilkers.

Total
0
Shares
People are also reading