Case studies

Dairy Australia's Tactics for Tight Times case studies showcase practical tactics implemented by dairy farmers across the country.

Click below to read the various case studies and learn how they can help your business.


  • Tactics for Summer - Brad and Kristie Missen (Owners), Darren Gee (Herd Manager)

    Macalister farmers - Brad Missen, Jim Missen, Darren Gee

    Farm Details

    Dairy region
    Macalister Irrigation District | GippsDairy region
    Milking area (ha)
    90 Ha
    Cows milked (numbers)
    315 this season, down from 335 last season. 50/50 split calving
    Milk Production (Kg Milk Solids)
    Last season 199,000 kg/MS
    Milk Production (Kg Milk Solids/cow)
    594 kg/MS/cow last season, down from 645 kg/MS/cow previous
    Home grown feed (t/DM/milking ha)
    Approx. 12.5 t/ha consumed
    Cows/ FTE
    Approx. 75

    Tactics for summer in a reduced milk price environment

    What have you done/are you doing to understand your current business situation?

    Using lessons learnt as a support group member on GippsDairy and Macalister Demonstration Focus Farms, we have assessed all aspects of our business looking at what is important in the short term and long term.  If something has a long term benefit we are willing to use equity to cover the cost to maintain current practice, i.e. herd genetics. If there are only short term implications such as concentrate feeding, we are more willing to change what we are doing.  We have completed a monthly cash flow budget and are updating it each month and as circumstances (such as step ups and grain prices) change.

    What is your plan to maximise value from home grown and purchased feed?

    We are expecting to improve our pasture utilisation by reducing pasture residual levels slightly and being more willing to conserve silage when pasture gets too long. We are maintaining urea rates and a strong focus on irrigation intervals, especially whilst we have Spill Entitlement available, to maximise pasture growth. We have culled all passenger cows so that more of the pasture consumed will go to milk production and less to cow maintenance - this should also reduce the need for purchased protein as more is available per cow from grass. We are split calving (50/50) which allows us more flexibility if we have a hot, dry summer. We can also dry more of the farm off for Jan/Feb to save water to guarantee our autumn/winter production when milk price is higher. This allows us to return more value from our brought in fodder from run off blocks.

    How are you managing your costs and budget?

    The main techniques we are using are a more rigorous cash flow budget and paying all bills as soon as possible to make sure there are no surprises. We have cut any capital expenditure and reduced some labour to reduce costs. Culled cows have been a valuable income stream also. 

    How are you managing your herd health and welfare?

    The only major change to herd health has been to cull cows that have little long term value to the herd, particularly if they have a clinical case of mastitis. All other practices have been maintained to ensure no long term effects to our herd.

    How are you looking after yourself and staff?

    We try to allow time for family throughout the year as all our staff have young children, and time with them is critical. We attend most Denison Discussion Group meetings for discussions with other farmers. We have had a long silage harvest this year so we will all need a break over the next few weeks. Each of us will have a few days off here and there to spend time with family and friends. 

    What are your tactics and plans for summer operations?

    Our business is set up to be flexible through the summer to maximise the autumn/winter production. We have high water use soils so extra water purchases are rarely economic in low allocation years. We manage this by drying a portion of the farm off over summer to save enough water to fully irrigate the whole farm from the first of March. We don’t need as much feed over the summer as the autumn cows are dry and this gives us the best return on our available water. We also generally have 150% of our silage needs budgeted for if we need to dry off more land than usual. This summer, with good water allocation and harvest and after doing a water budget, we will dry off around 20% of the farm, which will be prepared for pasture renovation whilst dry and sown to either annual or perennial pasture late February. We have a larger than usual autumn herd to calve this year so feeding them fully is the aim as seasonal price incentives increase.
  • Tactics for Summer: Sue and Brett McGinn | Belmore River, Dairy NSW Region

    Brett McGinn 240x180

    Farm Details

    Dairy region
    Belmore River, East of Kempsey, Dairy NSW Region
    Milking area (ha)
    60 ha
    Cows milked (numbers)
    100 (year round calving) + 100 replacements
    Stocking rate (cows/ha)
     1.7 cows/ha
    Milk production
    722,185 litres
    Milk production/cow
    7,222 litres/cow
    Cows/ FTE
    100

    Tactics for summer:

    What have you done/are you doing to understand your current business situation?

    We keep extensive farm records using computer based accounting software so we are always acutely aware of our financial position. Our records are always up to date within a few days because we choose to do a little bookwork every day. We do a lot of year-on-year comparative financial analysis and also graph our production and milk quality so we are constantly benchmarking our own performance. We have registered with DairyBase.

    Even though we are on top of our financial position, taking part in Taking Stock was an important step to our financial health. The process helped confirm some strengths and weaknesses in our business and we answered many of our own suspicions by going through the process with the consultant.

    We find that participating in as many relevant field days as possible keeps us up to date with current best practice as well as offering us time out off the farm. Fert$mart and Feeding Pastures for Profit (FPFP) have been the two most valuable workshops for us.

    What is your plan to maximise value from home grown and purchased feed?

    As a result of participating in FPFP, we removed some internal fencing to better utilise our home grown pastures. We focus more on utilising our pastures and seek to make silage from only genuinely excess feed.

    After participating in a Fert$mart workshop and developing a Fert$mart plan, we have been much more strategic in our choice and application of fertilisers. Our limiting factor was lime and we have addressed this as cash flow permits.

    Sue McGinn 240x180

    How are you managing your costs and budget?

    We keep a monthly cash flow budget from milk pay to milk pay so we are always in touch with our cash position.

    Some time ago we decided to apply for an overdraft account equivalent to one month’s milk pay and this has proven invaluable when cash flow is tight. The ability to use the draw down facilities on our loans also helps us to sleep well at night.

    During the worst of our financial struggles we ceased all capital improvements unless absolutely necessary and opted for repairs and maintenance spending only.

    How are you managing your herd health and welfare?

    As committed stud breeders we have veered away from breeding the extreme super dairy, show type animals to breeding more robust pedigree cows without compromising on conformation and production.

    We no longer chase extreme litres per cow with complex feed rations but aim for sustainable and efficient feed conversion and longevity.

    How are you looking after yourself and staff?

    Like many farmers we hadn’t had a decent holiday in years and counted cattle shows as time away. When a local dairy farmer sold his farm an opportunity arose to employ him as a relief milker and we embarked on our first holiday to Thailand.  Our cows calve all year round and are nearly all AI mated, so as a result of being away there was another calving gap nine months later. We now plan for a holiday every nine months. These holidays are very important to our mental well being and are now an important aspect to our annual routine.

    For us, we found that networking outside the dairy industry helped us get away from our immediate issues, and searching out positive friends kept us encouraged.  

    What are your tactics and plans for summer operations?  

    We experienced five years of flood conditions, a 30% reduction in our tier one contracts and falling milk prices at the same time. As a result of squeezing our finances and becoming as efficient in every area we could on the farm, our recovery was faster when times improved. We were also able to begin making capital improvements again.

    This year we started rearing all our bull calves to weaning stage before passing them onto a beef farmer to grow out. The partnership arrangement is 50/50 of sale proceeds at time of sale. This will provide an additional income stream for us and doesn’t use any of our milking herd grazing land. 

     

     

  • Feedbase tactics: Dehne and Sarah Vinnicombe | Mitiamo, Murray Dairy region

    Dehne and Sarah Vinnicombe

     

    Farm Details

    Dairy region
    Murray
    Milking area (ha)
    253 ha
    Cows milked (dry + lactating)
    440
    Stocking rate (cows/ha)
     1.7 cows/ha
    Milk production (Kg milk solids)
    253,200 kg
    Milk production (Kg milk solids/cow)
    633 kg/cow
    Home grown feed (t/DM/milking ha) (including conserved feed from milking area)
    1.7-2.2 t/ML
    Feed from runoff/lease block 402ha which is our hay area plus young stock and grain production.

    Purchased feed (t DM/Cow)

    Concentrate

    Hay/Silage

    Other

    We buy some grain and concentrates.

    2014-15 we were 90% self-sufficient. In 2015-16 we purchased mainly grain totalling 26% of total purchased feed. That was due to high water prices so cereal wheat was cut for hay instead of receiving a final watering to carry it through to grain.

    Feedbase questions:

    Briefly describe your production system?

    Our feedbase is made up of annuals, whole crop silage, good quality vetch and lucerne hay. We direct graze both lucerne and annuals which works out to be about 45% of feed needs and the rest is cut and carried and fed out on our feed pad. We have a relatively low stocking rate of 1.7 cows/ha. The pad is a gravel base with concrete troughs and is usually in operation March to August and then again from November to February. The cows are on it part of the day, depending on pasture available, and other factors such as heat stress.

    We aim for a high level of self-sufficiency, and we spread risk and increase water use efficiency by growing a variety of forage types. We grow all our own wheat and barley and have a disc mill and grain storage to support this.

    We use water strategically, depending on climate and price conditions. For example we might pre-water winter crops and finish them as needed, as well as keep our summer crops, lucerne and annuals going. We aim for best practice across what we do, including focusing on correct grazing management and applying nitrogen to optimise growth.

    Last year we grew 1.7 t of dry matter per ML of irrigation water applied and we used 1.7 ML/ha. This is a little lower than usual due to last season’s high water price which meant we irrigated less. The year before we grew 2.2 tDM/ML of irrigation water applied and applied 2.2 ML/ha. This is an average across all our forage types over the year. We aim to achieve that again this year.

    We do a lot of our own forage conservation and own 90% of our hay gear. We do our own seeding and lasering and get contractors in for silage and grain harvest. Economies of scale is really important to make this work and we weigh up each investment in gear against how much it would cost us to contract against the total value of what we are making. This year having our own hay gear will help with our risk management as we will have it on hand and be able to work around the weather. We press 2500 bales a year.

    What are you doing differently this year to optimise your system?

    One of our key priorities to manage feed over the year is to conserve as much surplus as possible, carry over hay, grain, silage and even water from season to season so we can draw back down on it when times are tight. We have silage bunkers to allow us to do this. They hold 1,200 dry tonne of silage.

    We have had to feed out more than expected over the wet winter but we had it on hand. This is important to us as we don’t want to be forced into the market at the same time as everyone else. Sometimes we also forward-buy feed on the market if it’s good quality and a good price, and we put that in the feed bank. But most of the feed we carry forward is what we’ve grown, as it’s our cheapest source.

    Our average home grown feed costs are usually around $107/t. This is spread across a mix of high value summer crops and lucerne as well as winter cereals and our grazed annuals to make sure we get return on investment for our water and so we have a well-balanced diet to sustain high milk production. That went up to $176/t last year, but it is still cost effective.

    Another focus we had this year was to preserve our paddocks as much as we could over winter to make sure we could minimise damage and optimise growth in spring. Our feedpad got a really good work out and mostly handled the conditions. We have also been lucky that we’ve had some other hard dry areas. Overall we’ve lost some opportunity in grazing management but preserved paddocks and soils so we can drive it in spring. This means we are reducing our need to go out to the feed market later on.

    We are keeping a close eye on costs and expenditure across the board. It’s been fortunate that water and feed prices are coming back a bit, which means we haven’t had to cut back too much on things that will drive production, such as fertiliser. We try to maintain that as much as possible so we preserve our productive capacity in the future. We look where possible to cut back on things that don’t have as much long term impact, so we weigh up each cost with this in mind.

    Who else have you involved in helping formulate/implement your feedbase plan for this year?

    DehneWe use a spray agronomist and we also do a lot of soil testing with Bridgewater Farm Supply. We have a nutrient program set up and we adjust it if soil tests and conditions suggest otherwise. We have used a lot of trial and error, and we try to get information from the best person we can find for the particular topic or issue we are looking at. We try to look for something new and people that will challenge us. This leads us to a whole range of people from different backgrounds and ideas to get advice and assistance from.

     

     

     

  • Tactics for summer: Casey, Bonnie, Peter and Wendy Taylor | Heathmere, WestVic Dairy region

     

    Farm Details

     Dairy region
    Heathmere, WestVic Dairy region
     Milking area (ha)
    305
     Cows milked (dry + lactating)
    407
     Milk production (Kg milk solids)
    233,593
     Milk production (Kg milk solids/cow)
    492
     Home grown feed (t/DM/milking ha) (including conserved feed from milking area)
    5.4

     Cows/ FTE

    132

    Tactics for summer

    What have you done/are you doing to understand your current business situation? 

    We met with our bank to assess our business when the milk price was reduced. We use DairyBase for our annual data and we are also revising our budgets monthly. We also have a consultant who we meet with bimonthly to analyse the farm business.

    We were a WestVic Dairy Business Focus Farm for two years to mid-2016, and the Focus Farm process and group members supported us to gain a stronger insight into our business 

    What is your plan to maximise value from home grown and purchased feed? 

    We have dropped herd numbers slightly for the short term (back to 453 milkers). We have flow meters in the dairy coupled with individual feeding so we can review responses to feed weekly and adjust accordingly. With a much better seasonal outlook we are looking at more summer crop options to provide the herd with quality feed over summer/autumn and rely less on purchased fodder. 

    We have grown maize over the past few seasons and we now understand how it can maximise the value of our home grown feed and support milk production in our business. We aim to plant around 28ha of maize this year which is an increase of 12ha from last season. We are looking at brassica options in the paddocks we had cereals and annuals in for the autumn/winter. We will manage our pasture and lucerne rotations as we have in other seasons, and as always any surplus pasture will be made into silage. 

    How are you managing your costs and budget? 

    In order to break even on opening milk price we made the decision to only put out capital fertilizer other than nitrogen where it is absolutely necessary. We have an excellent fertility base to work from so most areas have only had nitrogen so far this season. We have calculated that our fertiliser decisions will save us around $0.12 kg/milk solids. There are a few small capital projects working towards our irrigation plans, but they will only happen if our budget demonstrates that the money is available.

    We feel that we can ‘tread water’ with a final milk price around $4.70 kg/milk solids with no major breakdowns and seasonal conditions on our side.
     

    How are you managing your herd health and welfare? 

    No changes have been made to our breeding program as we felt that any short cuts here would catch up with us very quickly in the future. All preventative measures have still been applied to herd health (e.g. wood chips on tracks to help prevent lameness). Cow numbers have been trimmed, and preg. testing is booked in early to identify empty cows and heifers as soon as possible and plan what to do with them. Calves are still getting the same feed ration as they have any other year - they are the future of the herd!

    How are you looking after yourself and staff? 

    Staff are still getting their regular time off, and are still encouraged to attend off-farm training days and discussions that are of interest to them. We (Bonnie, boys and myself) have just returned from two weeks touring around outback South Australia and are still actively involved in our boys’ sports and hobbies off farm.

    What are your general tactics and plans for summer operations?  

    So far this year (to October) we have had 300mm more rain than for the whole of last year. We feel that this opens up plenty of opportunities for fodder crops and less irrigation. This will lift our t/DM/consumed per ha and lower our cost of production, as well as increasing per cow production. While we expect farm gate milk price to remain low for the remainder of the financial year we feel that we can capitalise on the season and increase cash flow with reduced costs.



  • Feedbase Tactics: Ken and Jill Lawrence | Westbury, Northern Tasmania, DairyTas region

     

    Farm Details

     Dairy region
    Westbury, Northern Tasmania, DairyTas region
     Milking area (ha)
    236 ha (209 ha irrigated).  526 ha non-milking used for young stock and other enterprises
     Cows milked (dry + lactating)
    920 milking (970 calved reducing to 920 over the season)
     Stocking rate (cows/ha)
    3.9
     Milk production (Kg milk solids)
    425,000 kg MS in 2015/16 season (up from 406,000 kg MS in 2014/15 season)
     Milk production (Kg milk solids/cow)
    459 kg MS/cow (5,071 L/cow)
     Home grown feed (t/DM/milking ha) (including conserved feed from milking area)
    14.6 t DM/ha (increased from 13.6 for 14/15 season)
     Feed from runoff/lease block
    497.4 t DM of silage and hay fed on milking platform

     Purchased feed

     Concentrate

     Hay/Silage

    1.1  T DM/cow

    0.3 T DM/cow

    What is your feed production system?

    We are a spring calving farm that focuses on growing and consuming as much pasture as possible.  Grain and other supplements are only used to top up the diet and compliment the irrigation when necessary.

    We target a 300 day lactation (making 282 days last season) and use options such as changes to milking intervals from twice a day to three milkings in two days to help look after cows and their condition towards the end of the season.

    Currently we are looking at the source of our nutrients and considering changing this to non-traditional sources.

    What are you doing differently this year to optimise your system?

    This year we have trimmed every known extra cost out of the system.  Our main energy will be spent on growing and consuming as much grass as possible.  Pasture will be measured two to three times per month and effort put into having a post grazing residual of 1500 – 1600 kg DM/ha.

    This year we will also be reducing the amount of concentrates fed and harvesting only genuine surpluses on the milking platform.  In previous years we have held the level of concentrates over the spring period to ensure that we have silage to harvest off the milking platform.

    We are also look at reviewing our fertiliser strategy moving to different sources of fertiliser for the pastures.

    While no cropping will be done on the milking platform, turnips will be grown for the young stock and oats grown for hay on the run-off blocks.

    Who else have you involved in helping formulate/implement your feedbase plan for this year? 

    We have enlisted the help of our two consultants (one for the business and one for the soil management).  As well as this we are involved in a local business discussion group that allows us to bounce ideas off other farmers as well as hear about what they are doing to manage in this season.


  • Feedbase Tactics: Murray Fowles | Bena, GippsDairy region

      Murray Fowles

    Farm Details

     Dairy region
    Bena, GippsDairy region
     Milking area (ha)
    113
     Cows milked (dry + lactating)
    200
     Stocking rate (cows/ha)
    1.8
     Milk production (Kg milk solids)
    120,000
     Milk production (Kg milk solids/cow)
    600
     Home grown feed (t/DM/milking ha) (including conserved feed from milking area)
    9
     Feed from runoff/lease block
    126 t/DM

     Purchased feed

     Concentrate

     Hay/Silage

     

    1.8

    0.8

    What is your feed production system?

    Pasture is our main source of feed, supported by grain at between 5 and 7kgDM/cow/day.

    We usually increase grain just prior to joining then reduce it at the end of joining - we are talking about a 1kg difference. We feed a dairy pellet all year as this is the easiest way for us to get additives into the cows when we need to, and we usually use pasture quality as an indicator for adjusting the amount of grain we feed.

    We generally keep our grain at 5kg/cow/day and adjust for pasture quality in other ways.  We use the bank concept over spring to maintain pasture quality. We have a very simple system and are not highly stocked so our cow condition doesn’t really shift much over the lactation.  If we notice a significant change we might adjust grain or purchase quality fodder.

    What are you doing differently this year to optimise your system?

    This spring pasture was getting away from us so we ‘banked’ paddocks for silage, the weather turned bad so we pulled them back into rotation. This year we will stick to 5kg of grain per cow per day and use more urea to build a surplus that we can cut for silage instead of purchasing hay. During summer, rather than increase grain we are likely to source some quality hay to fill any gaps. We especially don’t like to adjust grain just prior to or during joining as we don’t like changing routine at this time.

    In an average year we would use around 20T of urea. This year we will increase that by 5T, this equates to one extra round. Urea will be applied as per usual and the paddocks will present themselves as a surplus at which point we will harvest for silage.

    At this stage it is too early for us to notice a difference in production or herd condition as we are only just half way through calving.  We are anticipating a lower peak than last season but are hoping the season holds so that production doesn’t drop too quickly. We do not have any plans to increase or decrease stocking rate.  Our system works well with the current stocking rate.

    Who else have you involved in helping formulate/implement your feedbase plan for this year?

    We are pretty self-reliant but do speak with providers such as our stockfeed rep on occasions.

  • Tactics: Nick and Simone Renyard | Timboon, WestVic Dairy region

      Nick and Simone Renyard

    Farm Details

    Dairy region
    Timboon, WestVic Dairy region
    Milking area (ha)
    270 ha
    Cows milked (dry + lactating)
    540
    Milk production (Kg milk solids)
    295,000 kg
    Milk production (Kg milk solids/cow)
    546
    Home grown feed (t/DM/milking ha)
    6.2
    Cows/FTE 125

    Tactics for winter

    What are you doing to understand your current business situation?

    Currently we are reviewing our DairyBase data and working closely with our farm consultant. We are concentrating on areas that will drive revenue and reduce cost such as continuing to improve cow performance, pulling back on repairs and maintenance and having a careful look at feed costs. We participate in an open book business focused discussion group, and we are support group members on a Focus Farm, and this assists us to make informed decisions about our current farm business challenges.   

    What is your plan to maximise value from home grown and purchased feed?

    We will continue to soil test annually to understand soil fertility. This year we will be extremely careful with our feed budgeting and only purchase what we really need to feed. We are continually reviewing our feed budget as the season evolves, and we are ensuring regular use of nitrogen with the grazing rotation.

    How are you managing your costs and budget?

    We are undertaking monthly revision of our cash flow, and we are doing a line by line interrogation for any possible savings. We also maintain a milk price calculator to carefully map our milk income and better understand OUR milk price. Whilst we will keep a close eye on our costs we have to be careful to not affect our long term productivity by making short sighted decisions.  

    How are you managing your herd health and welfare?

    We are ensuring the herd is well fed and maintaining expected body condition – we will not sacrifice future herd fertility or healthy milk production. We are carefully monitoring cows post calving to quickly identify any ill health issues. We will continue to maintain decent track condition to limit any lameness or feet issues.  

    How are you looking after yourself and staff?

    It’s always been important to us that our staff work sensible hours and have regular time off weekly.  Over worked and tired people can be unsafe and it is not ideal for wellbeing. We try to take at least one day off a fortnight and will have a few days off farm every few months.  The time away helps to maintain fresh perspective and renews energy again. We believe that in our business good communication is the key ingredient to ensuring we are all OK and continue to be so.

    What are your early tactics for spring?

    At this stage we aim to maintain fertiliser application to drive home grown feed. We are carefully monitoring our autumn sowings to identify any re-sowing needed. Like every other spring, we try to grow and utilise as much home grown feed as we can. 

  • Tactics: Tim and Lyndal Humphris | Tongala, Murray Dairy region

      Tim and Lyndal Humphris

    Farm Details

    Dairy Region

    Tongala, Murray Dairy region

    Milking area (Ha)

    150

    Cows milked

    330

    Milk Production
    (Kg Milk Solids)

    178,000

    Milk Production
    (Kg Milk Solids/cow)

    540

    Home grown feed (t/DM/milking Ha)

    7.33

    Cows/FTE

    130

    Tactics for winter

    Spreadsheet What are you doing to understand your current business situation? 
    Our Budget is done monthly with our farm adviser and final annual figures will be loaded onto DairyBase. Figures will be put into the Murray Dairy Business Tool to enable us to assess the impacts of making changes in management and to assess the impacts of changes in both milk price and input costs. We are speaking to our bank manager on a regular basis and even more so over the next few months 

    Plant What is your plan to maximise value from home grown and purchased feed? 
    Difficult question to answer. This year home grown feed has been more expensive than bought in feed due to high water prices. 

    Our business is very exposed to the temporary water market. We will use less water next season, and try to minimise the corresponding fall in pasture harvest. Presently this means we will water in the spring and summer. A new stand of lucerne will be the only pasture watered through the summer.

    We will keep a very close eye on Lake Eildon inflows to assess the likelihood of water allocations and hence temporary water price. If water is cheaper we will irrigate longer into the spring. Summer crops will be on the agenda again if water price reduces.

    Cost of home grown feed will be evaluated in line with water price. Decisions will be made comparing bought in fodder and the likely cost of home grown fodder.


    Bag-o-money How are you managing your costs and budget? 
    We have made a decision that we must keep farming. Stopping milking is not an option without selling the farm. Therefore so long as there is a margin over feed cost we need to maximise the number of cows we milk to cover our fixed costs, or more particularly to minimise our losses.

    CowHow are you managing your herd health and welfare? 
    Animal health costs are already very low. There will be some adjustment to dry cow regime. We are actively trying to source agistment for both dry cows and young stock. This is far cheaper than supplementary feeding.

    People connections How are you looking after yourself and staff? 
    We continue to attend our Dairy Business Network discussion group. We talk regularly with our colleagues in dairying, and we are maintaining our usual rosters (i.e. same time off). 

    Leaf What are your tactics for spring?

    Last year our cheapest feed source was bulk chopped silage purchased standing in the spring. Currently we are actively sourcing standing crops to purchase and cut in the spring. Bank assistance and/or milk company finance will be used to fund these purchases (assist with cash flow).


    Spreadsheet Business assistance
    Our farm adviser will be used to update budgets and prepare submissions to the bank under the Murray Dairy Tactic for Tight Times business analysis & assistance.

    We will look at restructuring loans to utilise farm concessional loans. The option of changing finance institutions will be considered to achieve this goal. We need more clarity about the criteria before we go forward.

    Finally we are in the process of applying for the household farm allowance. This is a controversial area, however we see this as an important piece in the puzzle of navigating our way through the months ahead. We intend to be in business for many years to come, and to be successful. Hence we will be paying lots of taxes in the future. If we have a viable business in the future it is much better for the district and the community that we continue to operate now.

  • Tactics: Richard and Melissa Duniam | Sisters Creek, DairyTas region
             Richard and Melissa Duniam

    Farm Details

    Dairy Region

    Sisters Creek, North west Tasmania, DairyTas region

    Milking area (Ha)

    150

    Cows milked

    490

    Milk Production
    (Kg Milk Solids)

    252,000

    Milk Production
    (Kg Milk Solids/cow)

    514

    Home grown feed (t/DM/milking ha)

    11.8 (projected)

    Cows/FTE

    180


     Tactics for winter

    Spreadsheet What are you doing to understand your current business situation?

    Budget, budget, budget! We are working closely with our accountant to aid with financial and business support to ensure we are on top of all our business figures, and we are using DairyBase to collect and analyse farm business data. We also utilise our milk company for income estimates to create accurate cash flows and monitor monthly. As we are a growing business cash is always king so we feel we always need to know our position for good or bad.

    Plant What is your plan to maximise value from home grown and purchased feed?

    We aim to feed about 300 kg per head less grain this season to reduce supplementary feed costs. We developed a Feed Budget in a DairyTas managing the season program, and we are confident we can increase pasture utilisation and avoid any cow condition or milk production losses associated with reducing grain. We are closely monitoring our stocking rate and will cull any milkers we can’t carry.

     
    Bag-o-money How are you managing your costs and budget?

    We have adjusted our budget based on the season’s opening milk price, and we have calculated our own farm milk price to budget monthly across the season. We have budgeted to milk price, but seasonal conditions will have a big influence on our profitability this season. We will be establishing a nutrient budget which enables us to adjust our fertiliser plans based on specific pasture area needs. We are intensely monitoring our pasture growth, which is allowing us to streamline our use of grain in line with pasture growth and availability.

     
    Cow How are you managing your herd health and welfare?

    We are managing the herd as we always do to ensure milkers are in optimum body condition, particularly for calving in August/September. We work on the cows being in an excellent and healthy condition by the end of lactation which seems to make wintering them easier if we only have to maintain their condition. We will cull any underperforming cows and assist any cows that need support.

    People connections How are you looking after yourself and staff?

    We provide a supportive environment for our staff. We have provided them with the opportunity to have more time off, we encourage them to establish household budgeting routines and we share dairy industry information with them to increase their understanding of their role and the dairy industry. We will have a couple of small breaks with our kids, but the problem with low payout years is there’s no spare cash, plus it takes a lot of focus to stay on track and it doesn’t pay to take our eye off the business at any stage.


    Leaf What are your tactics for spring?

    The key focus right now is to monitor cow condition at drying off and through transition feeding (drying off and pre calving). A major focus of ours is to ensure all stock are fully fed at all times. Monitoring pasture cover and growth rates weekly is enabling us to balance any effects reduced supplementary feeding might have on cow condition and production.

  • Tactics: Grant and Leesa Williams | Hallora, West Gippsland, GippsDairy region

     Grant and Leesa Williams Hallora, West Gippsland, GippsDairy region

    Farm Details

    Dairy Region

    Hallora, West Gippsland
    GippsDairy region

    Milking area (Ha)

    225

    Cows milked

    500

    Milk Production
    (Kg Milk Solids)

    255,000 (projected)

    Milk Production
    (Kg Milk Solids/cow)

    510 (projected)

    Home grown feed (t/DM/milking ha)

    8

    Cows/FTE

    142

    Tactics for winter

    Spreadsheet What are you doing to understand your current business situation? 
    We are looking at doing Taking Stock with GippsDairy. We have completed cash flow budgets and we are logging into DairyBase a bit. The milk factory has also provided milk payment budgets. We had a quick chat to our banker, he’s aware of what is happening and he has no current concerns. 

    Plant What is your plan to maximise value from home grown and purchased feed? 
    We are using the feed pad as a way to reduce pugging and this will help us grow a bit more grass and grow a bit more silage. The feed pad was only finished last winter so it’s the first full winter using it. It’s working well at the moment and has given us a chance to get the cows off the paddock during those days of poor weather. We’ve done a brief feed budget and because of the low milk price we will reduce our concentrate feeding a bit. We are trying to follow a similar feed pattern to last year, but just tinkering with it a little bit.

    Bag-o-money How are you managing your costs and budget? 
    Going forward, we will use a bit more urea. We have never been really high urea users but will apply a bit more while it’s at a good price as it’s the best way to grow cheaper feed. We are keen users of DairyBase and do like it. By analysing past year’s figures we have calculated a break even milk price and cost of production which is higher than what we are being paid, so we either need an early step up or we will need to trim expenses further. One area we will be reducing is capital infrastructure spending like laneways and building repairs, and also reducing phosphorous and potassium fertilisers. Our recent soil test shows that we have reasonable levels of P and K so we are able to pull back for a while.

    CowHow are you managing your herd health and welfare? 
    We have dried the cows off slightly earlier than in the past mainly because of the lower milk price for July and August, and this will give the cows a bit of an opportunity to put some condition on. We will be using cheaper AI bulls in our breeding program this season. It’s something we do reluctantly but feel it won’t hurt too much. Something we haven’t cut back on is dry cow treatment where we are still blanket dry cow treating. Also we are still using any vaccinations that we normally use in the belief that it will reduce animal health expenses down the track. If it’s essential it is still being done. We are comfortable with our current cow numbers, meaning we don’t want to make too many changes to our milk flow. Overall, we don’t want to change the type of farmers we are and we’re trying not to make too many overall changes, just tinker with the system we have already got.

    People connections How are you looking after yourself and staff? 
    Currently we employ two of our sons and are hoping to limit any changes to their jobs. In terms of holidays for us, it’s not really a priority but maybe a weekend or two off throughout the year will occur. It’s just one of those years when you have to pull back on costs a bit.

    Leaf What are your tactics for spring?

    Making sure we can grow enough silage. By using extra nitrogen and maintaining a slower rotation we are hoping to grow a surplus and cut more silage than last year. We are planning early for turnips, so as soon as they are right to go in, we will get them in as they are another cheap feed option.

  • Tactics: Karen and John Hunt | Allendale, South East SA, DairySA region

    Karen and John Hunt, Allendale, DairySA region   

    Farm Details

    Dairy Region

    Allendale, South East SA
    DairySA region

    Milking area (Ha)

    170 (150 Ha irrigated)

    Cows milked

    600

    Milk Production
    (Kg Milk Solids)

    270,000

    Milk Production
    (Kg Milk Solids/cow)

    450 (1800kg MS/Ha irrigated area)

    Home grown feed (t/DM/milking Ha)

    20

    Cows/FTE

    200

    Tactics for winter

    Spreadsheet What are you doing to understand your current business situation? 
    We developed budgets for the business as soon as the opening milk price was released. We are looking to be involved in any activities that support business capacity, and we are working closely with our accountant and bank. We have been utilising a farm financial and physical business management program for some time, and we have registered for DairyBase

    Plant What is your plan to maximise value from home grown and purchased feed? 

    Our business has always had a strong emphasis on growing and utilising home grown feed, and we will continue that routine. We undertook some analysis of the effects of reducing grain or altering stocking rates on the business, but calculated that we won’t make changes around feed practices.


    Bag-o-money How are you managing your costs and budget? 

    We are working hard to manage our costs and budget in the current challenging industry conditions. We have calculated our break even milk price and we are adjusting our budgets and cash flow monthly. We run main and working budgets, and we can regularly make changes to the working budget.

    Intensive monitoring of water is essential for this business, and we are maintaining weekly water updates. We will continue to soil test because soil test results are essential to make the most efficient decisions on fertiliser and nitrogen applications. 


    CowHow are you managing your herd health and welfare? 

    It is standard practice for us to carefully monitor and manage herd health, and we will continue that routine. The key criteria for culling cows will be those with lower production and fertility.


    People connections How are you looking after yourself and staff? 

    Communication is an absolute key, and we run regular meetings with staff to keep them informed and reassure them that the farm is viable and their jobs are still important. We manage ourselves by making sure we know where we and the business are at: the good, the bad and the ugly! Currently it is an emotional time and it’s crucial to look after the farm, the stock and the people.



    Leaf What are your tactics for spring?

    We are spring calvers so having the herd and farm in best possible condition for calving is our focus. Right now we are carefully monitoring any animal health issues and getting the herd into ideal condition for calving and the new milking season.

  • Farm Business Management: Brody Kennedy | Forge Creek, GippsDairy region

     Brody Kennedy

    Brody’s planning to succeed

    Brody Kennedy reckons the next 12 months will be tough enough without having to deal with any unwanted surprises.

    The dairy farmer from Forge Creek near Bairnsdale is trying to nail down every cost on his 330 hectare farm to give him an accurate picture of where the business stands at the moment and where it will be placed every month for the next year.

    Brody has developed a month-by-month spreadsheet that tracks costs and income, giving him a clear picture of his finances and how decisions will affect the monthly balance sheet. 

    His forensic assessment of financials gives Brody confidence that he can keep the farm operating at a sustainable level, even with the current low milk price.

    “We are too close to the line for gut feel,” he said.

    “We think we are pretty good at what we do, but when you have high levels of debt, you need to do better than gut feel.”

    “We have made up our own program that has all our monthly costs and income and in the column next to it, you have the next month. We’re running 12 month scenarios of what is going to happen under a certain management system.”

    “I can be sitting here and see that if we change the litres and feeding in February, I can straight away see what effect that will have on March. I’m pretty much running the farm on the computer.” 

    “At the end of the year we enter our annual numbers into DairyBase and can start to further scrutinise and compare our total farm business performance.”

    Brody and his wife, Allisa, lease the property at commercial rates from their family at an annual cost of $180,000.

    The couple owns their farm machinery and 350-strong Holstein and crossbreed herd, and provide themselves with a family income of around $80,000.

    Keeping costs down this year has meant making decisions across the farm, although Brody believes he is better off finding a series of small savings, rather than looking for major cut-backs in farm expenditure.

    “We are going through and finding $100 here, $500 there or another $1000 somewhere else, and all of a sudden you have $50,000 saved,” he said.

    “For instance, we have would normally have doing AI for a bit longer, but we cut that to be shorter. There’s a shorter calving period and more bulls put out. Those bulls are then choppered to free up cash flow.”

    “Instead of having three bulls and having them out there for longer, we have five bulls for a shorter time and then chopper them all. That’s one thing that can make a small difference.”

    Jobs like fencing are still getting done, but Brody and his staff are doing a lot of the work themselves, rather than engaging contractors.

    “We’re aiming to do jobs that are time consuming but not major costs,” he said.

    “So where we might have spent money to get someone in to do a job, we might do half the job ourselves.”

    “It chews up a fair bit of time, so therefore we are pretty busy, but it means we don’t have to pay out as much for those jobs.”
    While the extra workload puts a physical strain on the 30-year-old, he said he can cope better with that than having the mental and emotional stress of unsustainable farm costs.

    “If you have a handle on things, you can sleep a bit easier at night knowing that, if you stick to the plan, it will be looking pretty good on the computer,” he said.

    “It works better than getting up in the morning and asking ‘what are we going to do next’ and not really having a plan of attack.”

    A long-term program to improve soil fertility has seen Brody adding minerals like calcium and magnesium to his paddocks. This has meant that fertiliser and feed additive costs have not been major issues and herd health has remained stable.

    “This year we didn’t lead feed, we didn’t have any major calving issues or milk fever or anything like that,” he said.

    Brody said that the latest milk price set-back has reinforced his ideas on developing plans for reaching goals in the short, medium and long term.

    "I learnt pretty early on that you have to make a decision and stick to your plan of attack and you have to keep moving forward,” he said.

    “If you stop and let things build up, you can start going backwards quickly. You have to be positive, know your destination and keep striving for it each day.”

  • Farm Business Management: The Whitehead Family | Timboon, WestVic Dairy region

             Whitehead family

    Farm Details

    Dairy Region

    Timboon, WestVic Dairy region

    Year

    15/16 (Actual)

     16/17 (Budget)

    Milking area (Ha)

    303

    303

    Support Area (Ha)

    191

    191

    Cows milked

    631

     735

    Milk Production (Kg Milk Solids)

    437,800

     515,000

    Milk Production (Kg Milk Solids/cow)

    694

     700

    Home grown feed (t/DM/milking ha)

    6.3

     6.3

    Cows/ FTE

    90

     105

    Focused to meet dairy challenges

    The learnings gained by the Whitehead family over the past two years as a WestVic Dairy Business Focus Farm could not have come at a more important time, with the current combined challenges of difficult seasonal conditions and a lower milk price for 2016/17. 

    Mat and Renee Whitehead and Mat’s parents John and Leeanne combined two properties and herds, and made significant capital investment into a new rotary milking shed prior to commencing the Focus Farm program in 2014. During the Focus Farm program investment and major changes continued with an 600 cow feed pad established, calf rearing facilities renovated, a mixer wagon purchased and the calving pattern changed from split calving to calving most cows in January/February.
    Also the milking herd will increase from 600 cows in 2014/15 to 800 cows by March 2016/17.   

    As the Timboon Business Focus Farm the Whiteheads engaged Tom Walsh veterinarian/farm consultant from the Timboon Vet Group as a facilitator, and established a support group of around 30 local farmers and service providers. The Whiteheads outlined their key business challenges and met monthly with Tom and the support group to address these business challenges and the family goals.

    “Our main aim has been to improve farm business performance, and ultimately our return on what we have invested in the business,” Mat said.

    “To achieve this we needed to move to a single calving pattern and the decision to calve in January/February was based on maximising the autumn/winter milk incentives offered by our milk company, while also calving in the drier months.”

    “However, this also meant we were at peak cow numbers during winter and being a farm that can get wet the decision was made to construct a fully concreted feed pad that could stand 600 cows.  Regardless of the weather conditions the feed pad significantly reduces the amount of feed wasted.”

    Mat said that while early on in particular the regular Focus Farm meetings were somewhat daunting the input from their support group members and Tom was invaluable. 

    “We were entering a period where we needed to be more across our numbers. Being a Business Focus Farm has meant that we have developed a much better understanding of all the important numbers in our business and have become more disciplined in developing budgets on both a monthly and annual basis, and then tracking these against actual performance,” he said. 

    Tom Walsh said that as well as having monthly budgets to track against the farm’s annual physical and financial data, business details have been entered into DairyBase and this has given the Whiteheads and the support group members a clear idea of the relative strengths of the business and where efforts should be focused.

    The Whitehead’s two year Focus Farm program finished in June 2016, and as they prepare for a challenging 2016/17 season how will they utilise their Focus Farm experience?

    “We run a relatively high input, high production system and it’s important that we get the corresponding milk production for the inputs of both purchased and home grown feed. Through the work we’ve done with Tom and the support group we now know our numbers intimately,” Mat said. 

    “What this has told us is that we have a relatively low cost of production that has been tracking lower as we build cow numbers, and we’ve improved production per cow as we bedded down a new calving pattern and continued to fine tune the other changes.

    Cost of Production has come down from $5.20/kgMS in 14/15 to $4.85/kgMS in 15/16 and with the improvements and an average season the Whiteheads are aiming for $4.40-4.50/kgMS in 16/17.

    Tom said there are many farms in the Timboon region with similar levels of feed inputs. 

    “In the Whiteheads case this is resulting in high levels of milk production of 650-700 kgMS/cow, and they maintain a focus on improving home grown feed consumption while maintaining overhead costs per cow that are comparable to district averages,” he said.

    “What the DairyBase numbers have highlighted is that while feed costs are quite competitive on a per kgMS basis it is the major cost. No surprises there but it did highlight that if the Whiteheads can reduce feed costs while maintaining milk production there are significant gains to be made.”

    The Whiteheads are still looking at further opportunities to fine tune their farm business and with the lower milk price they have looked for opportunities to improve profitability and trim costs that will have minimal negative impact on the business. They believe there are potential pasture performance gains through ongoing pasture renovation, addressing soil fertility and fine tuning the use of nitrogen. The last two springs have been well below average resulting in lower silage and hay yields coupled with less days grazing, and has meant the business has been more reliant on purchased feeds than preferred. They will look for opportunities to increase home grown feed, decrease costs but maintain production. They are confident that they will see improvement in performance as this will be the first year the majority of cows calving when they want and the first year they will have full use of the feed pad. 

    Mat said that while maize silage is not a cheap feed at an estimated cost of $260/tnDM, they had found it fits in with their plans and similarly they were looking for areas to improve cost per tonne of dry matter consumed by the cows. 

    “The feed pad plays a big role in reducing wastage and improving yields for the inputs that are going in,” he said.

    “We’ll also peel back our PKS fertiliser inputs. Ideally this will be supported by soil tests but most of the milking area has a long/strong fertiliser history and when we work out whole farm nutrient balance there are definitely opportunities to reduce PKS fertiliser expenditure by concentrating on the sections of the farm where soil fertility levels are likely to be lower.”

    It is tempting to take more costs out of the business however the Whiteheads decided that with the improved growth from new pastures they will continue with their pasture renovation on home and runoff blocks to increase home grown feed. They will look for areas where the business can reduce R&M costs, however with the large number of cows and wet winters, track maintenance is an expense they are reluctant to pull back on. Also as the herd numbers have grown they are feeling underdone for stock water reserves and a new dam is capital expenditure they believe they can’t defer. 

    “While the savings aren’t huge we will grab the smaller opportunities as well by utilising milk meters, genomic semen, and we’ll maintain a three way cross breeding program with 40% of the herd to breed a more fertile, lower cost cow,” Matt said. 

    “We will continue to make principal repayments on our major farm loans, and we will probably look to go interest only for at least part of the next 12 months. We may look to redraw some of what we’ve paid off to fund essential capital works such as the dam. Having made these principal payments in the better years, the bank is comfortable to provide some redraw options.”

    The Whiteheads believe their time as a Business Focus Farm has definitely improved their understanding of their business and prepared them for current industry challenges.  

    Mat said the regular meetings with the support group and the scrutiny that comes with this has driven the Whiteheads to have a better understanding of all aspects of our farming business. 

    “Not only can we put plans together with a higher degree of confidence but we also feel we have the systems in place to track our actual performance and make the necessary fine tuning adjustments as the year progresses. One of the absolute priorities that we identified was the need for clearly defined business and succession plans. Having clear plans and targets that we can communicate to each other is proving invaluable as we work through the current challenges,” he said.

    To find out more, download The Whitehead Family's Cash Report.

  • Discussion Group: Central Dairy Business Network, Murray Dairy region

    Central Dairy Business Network -small

    Group name
    Central dairy Business Network
    Dairy Region
    Murray Dairy
    Main locations
    Kyabram, Tongala, Cooma, Wyuna East, Waranga shores, Koyuga, Stanhope and Gillieston
    Group leaders
    Chair, Scott Fitzgerald. Executive group James Shepherd, Brendan Hehir, Brad O’Shannesey
    Group facilitator
    Tom Farran
    Years of operation
    3 years
    Key group focus
    Farm business management
    Meeting frequency Every month/ 11 times a year

    Key issues currently facing group members

    Knowing cost of production, what are our businesses strengths and weaknesses and also what our plan is moving forward.


    Briefly outline how the group operates

    Usually, a member of the group hosts the meeting with the topic based around an issue facing their farm or a number of people in the group. Or the focus could be based on something the host is planning on doing in the future. The consultant who helps facilitate the group visits the host farm a week before we meet and spends a day preparing for the discussion. We meet for four hours and we also have a number of service provider sponsors who come and work through specific issues we are looking at. Those involved with our group include a vet, water trader, accountant, banking professional and feed nutritionist. Farmers pay to be group members, and Murray Dairy Discussion Group Support funding contributes to group operation.

    Briefly outline what happens at a group meeting

    A good example to illustrate this was earlier this year at the beginning of autumn, it was pretty tight with water and the group wanted to address the best way of securing water for potentially another dry year to come at that stage.  The options were to take up a three-year lease or borrow money and buy water to carry it over for the next year. The worry about leasing the water was you wear the entitlement risk. If you lease water for $180 plus charges and then only get 80 per cent allocation (for example), it is expensive per mega litre – up to the $250/ML mark. We had a couple of our sponsors/service providers on hand to dissect the situation as well. This helped the group understand what it would cost per mega litre at 80 per cent allocation if leasing water, compared to borrowing money at low interest rates, which would not lock you in for three years. I went in that day no knowing what we would do. The next day I implemented a plan to borrow money for carry over water, which was based on the discussion group analysis. 

    What tools/resources does the group use to collect, analyse and review farm business data?

    We basically bench mark ourselves against each other and we also put our current numbers up next to the previous year’s data to see how we’ve faired. If we’ve done our homework, normally that involves a couple of hours with our consultant to pull it all together and then he puts it on DairyBase for us. This keeps it all consistent for the group so we can compare with each other off the same platform. We also use the Murray Dairy Business Tool which is in a spreadsheet format and allows us to enter our own data. It has a series of budgets which address specific strategies we might want to use to increase our profitability, and provides costs and benefits of a strategy such as increasing or decreasing cow numbers.

    How do group members benefit from being involved in a discussion group?

    The biggest benefit for me is broadening my horizon and challenging our thought process on what we are doing. I find it’s a real trap when you are busy and you get tunnel vision, just focusing on the road ahead, rather than everything going on around you. The Discussion Group provides a great opportunity to learn from each other and implement various aspects of other businesses to suit your own and improve profitability. When we benchmark our businesses against each other at the end of each financial year, it is a big help because we get to understand our businesses and budgets better rather than just “having an idea”. I think it has opened our eyes to the fact you are far better spending time in the office or with the group and getting an employee to take care of the daily jobs. That way you can sort out a “battle plan” for the months ahead.

    What are some of the past activities the group has conducted that have assisted members to prepare for current industry challenges?

    When the first milk price crash first happened, we manipulated one farm’s budget in a number of different scenarios to see what would be the most profitable option/set-up for the year, i.e. running more or less cows. It was a fair way out from the opening milk price announcement but we used a figure everyone was comfortable with, along with hay and water prices. Most of the group have utilised Tactics for Tight Times, which has been helpful. Our group facilitator has also emphasized the importance of keeping in touch with friends outside the dairy industry to give us a break from everything that has and is happening.

    What are some of the key activities the group is conducting/planning to conduct to prepare members for current industry challenges?

    We will sit and do our annual analysis/benchmarking of our businesses in August. This helps us quickly learn what our break-even price for the last three years has been. Going into next season it gives us more confidence that we might only have to tweak a few areas a bit harder than normal. This annual process gives us a bit better way of tracking the future. After this meeting, our facilitator/consultant always runs a session covering the seasonal outlook, including inflows for Eildon and closing milk price trends.

    What do you think are the key factors that lead to successfully operating this discussion group?

    It’s important to build a strong foundation of trust, which we have over time, and then you find you call on each other to discuss different things at different times, rather than go to your neighbour or good mate down the road. We have a fairly young group, so there’s also an element of competitiveness. If someone has done well at something, then it pushes the other members to match it. You build off everyone’s enthusiasm and then you find the next day after a meeting you go home and adopt those “one percenters” others use. Being involved in this group has encouraged me to look at my farm from a different perspective.