Excellent farm management, low costs of production and a low farm purchase outlay four seasons ago combined to give them an extraordinary 16.6% ROC in the 2013-14 season.
The Coynes won the best Northland farm performance and the best ROC for a medium input farm nationally in the Dairy Business of the Year awards for 2015.
Their ROC was 3%-plus ahead of the other seven award winners around the country, including those farms that won best ROC for low-input and high-input.
For a couple who have just reached their 30s and relatively new to dairying it was an outstanding achievement, Intelact sponsor’s representative David Densley told a DairyNZ field day on the Hukerenui farm.
The farm is still under re-development, having been farmed semi-organically for 15 to 20 years resulting in poor soil fertility and pastures, milking a herd of 220 cows and producing an average of 50,000kg/yr MS.
Since the Coynes purchased in 2011, fertiliser, effluent irrigation, cropping with turnips and chicory followed by new grasses and very close attention to details have trebled milk production with only 50% more cows.
Michael is a mechanic by training and Natalie a registered nurse, but both had five seasons sole-charge relief milking on dairy farms around the Whangarei Heads while still employed in the city.
Full-time farming together began on Murray and Helen Jagger’s 550-cow Jersey herd in that district before moving to be herd managers for Mike and Michelle Konings in the Hikurangi swamp.
Their ASB rural manager suggested they look at the run-down Hukerenui farm, which they were initially reluctant to do, and Natalie’s parents helped guarantee the farm and cows purchase loans.
Four years on they have a gem, although still being polished, and young Kyro, aged 17 months, and another baby on the way.
The herd was put together from Jagger’s Jerseys and others from Waikato at an average cost of $1500/head plus GST, and breeding worth has now improved to 101, production worth to 108.
They employ two farm assistants, one full-time and the other on a casual basis and take advice from Paul Martin, an Intelact consultant and vet, who calls once a month.
“These guys get the most out of as little as possible,” Martin commented.
“Their strengths include attention to detail and making sure that all expenditure is focused on making a profit.”
In the Red Sky overall farm business assessment (for 2013-14) the Coynes scored excellent or very low risk in nine of 13 relevant key performance indicators or profit drivers.
The parameters were ROC, cost of production, operating profit margin, MS as a percentage of live weight, feed-conversion efficiency, core cow costs, core per hectare cost, forage cost and concentrate cost.
They were median quartile and average risk for percentage of pasture in the diet and pasture harvest and upper quartile and low risk for operating profit.
So strongly profitable with low costs of production when the payout was good, the Coynes were able to keep progressing through two low-payout seasons, Martin said.
They have deferred capital costs and repairs and maintenance, applied less fertiliser where possible and worked on increasing the effluent irrigation area from the current 18ha up to the optimum 25% of platform (36ha).
That was not easy to do, explained Michael, because a portion of the farm is flood-prone river flats and the railway line goes through the middle of the farm, with only two crossings.
State Highway 1 also splits the farm, hence an underpass.
The annual nitrogen use is 166kg/ha of nitrogen, made up of small applications at four- to six-week intervals throughout the year except mid-summer and mid-winter.
The Headlands environmental impact assessment of the farm for 2013-14 showed that 370kg/ha of nitrogen was applied through effluent irrigation on the small area (8ha) then reticulated.
Nitrogen leached over the whole farm was 50kg/ha, when good practice calls for something between 20 and 30kg/ha.
However, nitrogen is required to grow the pasture to feed the cows and make money because more than half of the milking platform still has run-out pastures.
“Nine tonnes of dry matter per hectare average harvested off this farm includes 40% renewed pastures, so you can guess how low the old pastures are,” consultant Martin said.
Sticking with palm kernel
Michael and Natalie Coyne will keep using an average of 3kg/cow/day or up to 5kg maximum of palm kernel expeller throughout the lactation.
Total usage in 2013-14 was 850kg/cow.
Pasture provided 82% of the diet and each cow consumed just under four tonnes total grass for the season.
Asked what plan B they had for supplementary feeding if Fonterra reduced allowable palm kernel use, the Coynes and consultant Paul Martin said other feed options weren’t as cheap.
“Significant milk production generates good returns from this low capital base but without palm kernel that wouldn’t happen,” Martin said.
“At present we don’t know the facts and numbers around PKE use, as Fonterra sees them, so we will keep using it.
“If a penalty cost is imposed we could either wear it or change tack – maize would be an option but a feed pad would be needed.”
Another limitation of the property was the small herringbone dairy, which meant 15 rows of cows and a long time spent milking.
As the new pastures and improved fertility work, an increase on the present 2.26cows/ha stocking rate would be indicated, but not without major expenditure on the farm dairy and yards.
