Their 200 hectare effective, 580- cow farming enterprise, spread over three properties, tied for first place in the Waikato region for the 2014 Dairy Business of the Year Awards.
By developing a simple, low-cost system honed through experience, the Gordons focus on finding a balance between seasonal variation, cow variation, feed availability, and costs. Combining these factors results in a “multiplier effect” with lower cost of pasture (-26% compared to the Red Sky Farm Analysis top 10% benchmark group for Waikato), a higher proportion of pasture intake (+17% against the benchmark), and a higher feed conversion efficiency (+3.5% against benchmark).
Focusing on “farming to the average” with a strict eye on costs enables them to achieve an enviable balance between lifestyle and farm profitability.
Brett and Rachael operate three leased farms – two properties near Eureka of 70ha and 80ha respectively, each with 20-aside herringbone dairies, and one 50ha property near Morrinsville.
At the time of winning, about 240 first-calving heifers and smaller framed cows were milked through one of the units, with the other mixed-age cows milked on the other two blocks.
Cost of production consistently sits at about $2.87/kg milksolids (MS), and for the 2012-13 season analysed for the award, their operating profit was a healthy $3637/ha. For context, the Waikato region top 10% operating profit benchmarked at $3181/ha for the Red Sky Performance Analysis dataset. Production for the season averaged 361kg MS/cow or 1066kg MS/ha.
For capital invested their return was 6%, against the Red Sky top 10% in the Waikato region with an average return on capital of 5.2%.
‘Success is measured by the annual holiday at the beach – both Brett and Rachael love to fish.’
Rachael points out their low farm working expenses are not because of one single factor, but rather because of a combined approach. For example, they do not use CIDRs or inductions, and use the LIC sire proofing scheme to reduce artificial breeding costs.
Brett says they have used CIDRs in the past but believes that if the cow would get in-calf only through the CIDR programme they would rather not have her in the herd. They have recorded and watched cows that would have entered a CIDR programme, observing that they cycled on an even split 10 days either side of what the CIDR programme would have achieved, if it had been in place.
A standout measure from the financial perspective is the cost of production at 71% of that for Red Sky Waikato top 10% benchmark group. Cost of production is a clear focus for the couple.
“We can’t control the milk price, but we can control our costs,” Brett says.
Rachael says they don’t spend on wants but have the “need” items fixed in the budget, which rolls over with minor tweaks.
Any additional spend is closely scrutinised by both members of this team, and if they don’t agree the expenditure doesn’t happen.
Controlling feed costs is a key strategy in achieving a low cost of production. The Gordons have a total feed allowance that is 15% less than the top 10% Waikato benchmark.
Based on the rule of thumb that 65 megajoules of metabolisable energy is required for 1kg MS, the expected relative drop in milk production should be about 18% less, but with their higher feed conversion efficiency that relative milk deficit is actually closer to 11% less with respect to the top 10% benchmark group.
The Gordons’ focus on early season production pays off with the feed allowance more heavily distributed to the early- and mid-lactation cows, where the feed is more efficiently converted into milk.
Maize for silage is part of the regrassing programme.
Feed conversion efficiency in the Gordons’ enterprise is 3.5% greater than the top 10% Waikato benchmark group, effectively achieved by leveraging the lactation curve and the naturally higher feed conversion efficiency of early lactation.
All blocks are operated under low-input systems (DairyNZ System 2) and the couple adopt an aggressive approach to the operation of their pasture-based system.
For example, Brett says one point of difference for their business is that the planned start of calving (PSC) in mid-June is relatively early for the area. Qualifying that, he also says having an early PSC means there is minimal pressure on the calving pattern.
“We would struggle to feed them if we had a condensed calving pattern.”
The early calving date has evolved with the spate of dry periods. Brett regards early season production as both more profitable and easier to achieve than late lactation autumn production.
“In June, we can underfeed the cows and still get 1.8kg MS/cow while in May we would struggle to get 0.6kg MS/cow even if they were fully fed.”
The emphasis on milk production pre-Christmas is a key part of Brett and Rachael’s search for an efficient low-input system but lifestyle is also a big factor in most of the decisions they make. The Gordons and their managers work hard from March until Christmas and then their focus shifts to lifestyle. Success is measured by the annual holiday at the beach – both Brett and Rachael love to fish.
They target early milk in the vat and see production post-Christmas as a bonus. With that in mind, to protect cow condition they place one herd – the heifers and smaller cows – on once-a-day milking after Christmas. Brett is reluctant to buy in supplement to put condition on cows.
‘In June, we can underfeed the cows and still get 1.8kg MS/cow while in May we would struggle to get 0.6kg MS/cow even if they were fully fed.’
As part of the pasture renewal programme up to 10% of the farm goes into maize for silage every year. Brett does as much of the groundwork as possible, as well as the fertiliser applications. By doing this they have tighter controls on the cost, with the maize silage costed at $0.16/kg drymatter.
Two-thirds of the farm is under-sown each year with a hybrid tetraploid ryegrass. Emphasis is placed on optimising grass growth during the early to mid-spring period.
They apply up to 200kg of nitrogen/ ha, following the cows around in spring and adopting the “little but often” application strategy. Three-quarters of the annual nitrogen fertiliser is applied pre-Christmas, with the remainder ear-marked for autumn.
People are another focus for the couple. They have developed a mentoring and training programme to develop up-and-coming contract milkers. Recruitment is based on staff with a strong desire for progression through the dairy industry.
Brett and Rachael work on developing them to become effective managers who take ownership of “their” farm with sole-charge management.
This is supported with a weekly scheduled farm walk run by Brett and the respective farm manager, followed up by a discussion about the decisions resulting from that walk.
Both Brett and Rachael relief milk for the managers, and take instruction from the farm manager regarding the unit’s operation while they’re there. They treat it as an opportunity to get an overview of the farms and pass on any issues or training opportunities to the farm managers.
After two or three seasons the farm managers typically move onto contract milking roles, and new farm managers are developed. Brett sees it as a win-win scenario –they are assisting up-and-coming farmers on the progression pathway while also controlling staff costs.
