Dairy farming across the Atlantic

Argentinian dairy farmer Francisco Mihura keeps his operation profitable by practising economies of scale and using home-grown food to lower his costs. Denene Erasmus was there.

Despite his down-to-earth farming clothes, Francisco Mihura has the bearing of an aristocrat. Sipping a steaming cup of Yerba Mate, a popular herbal tea in many South American countries, he waits for the interpreter to translate.The tale Francisco tells of dairy farming in Argentina is similar to one described by dairymen in South Africa – continual expansion to maintain margins.

Early days
The Mihura family came from Sugarramurdi in Spain and Francisco’s forefathers started farming soon after arriving in Argentina in the early 1900s. He inherited his farm in Nogoyá in the Entre Ríos Province, from his grandfather. “This land has belonged to our family for more than a century. The original farm was over 10 000ha,” says Francisco. “Because of successive divisions among family members, the farms are now smaller and this farm, Mihura Dairy Farm, is 3 600ha.”

When Francisco took over the business in the early 1970s, he began to focus on dairy. With 1 800 cows in milk, milking an average of 27l/day, and five milking parlours, his operation is a substantial one by Argentinian standards. The average dairy in the area runs on 200ha.


Francisco Mihura. His family has been farming in Argentina for more than 100 years.

Forage for affordability
Dairymen in this region face challenges with feed costs and production. “We’re not in a high potential crop production area, but we have to produce forage and feed on the farm as buying in feed makes dairying here unprofitable,” says Francisco.
There is some seasonal variation in the herd’s diet, but 40% of total feed intake is in the form of grazing. Silage, which makes up 30% of the diet, is farm- grown. The remaining 30% is a high protein soya oilcake-based feed, with some of the ingredients also grown on the farm. In winter, the cows graze dryland oats at a stocking rate of about 1MLU/ha.

Breeding and calf rearing
Francisco explains that dry cows are kept in smaller camps where they can be easily monitored and fed. They are put on a diet of maize silage and 4kg high protein concentrate supplement with a phosphate lick daily. Newborn calves are taken to the calf pens after 12 hours with the dams. They are bottlefed 2l of milk twice a day and given a ration of calf pellets.

After six to eight weeks, calves are weaned and put on hay and a balanced ration until they are six months old and weigh about 180kg. At this stage the diet changes to maize silage and high protein feed. At 15 months, the heifers enter the breeding programme. Generally, they calve at 26 months. All breeding is done by artificial insemination (AI), using Semex sires.

“It is very important for us to improve the genetic potential of our dairy herd. AI allows us to choose bulls with specific traits and use it on specific cows,” says Francisco.In selecting breeding material, he focuses on fertility and other key attributes such as positive scores for protein and milk solids, a good dairy cow conformation, depth of body; and a large, wide and well-attached udder with balanced teat placement. The following herd is run on planted pastures.

Francisco has a seasonal calving pattern which is planned so that 90% of the animals have peak milk production during spring. Between 90% and 95% of heifers fall pregnant during the breeding season. To keep the focus on improving herd fertility, heifers that have not fallen pregnant by the end of the breeding season are culled. Bull calves are sold to feedlots soon after birth for an average price of 300 Argentine Pesos (R500) per calf.

Economic hardship
As in South Africa, the input-price squeeze in dairy farming has seen smaller dairy farms in Argentina disappear while cow numbers grow in the remaining farms as dairymen aim to benefit from economies of scale. The situation reached a breaking point last year when dairymen brought the country’s dairy industry to a halt, protesting in front of dairy processing plants in the provinces of Santa Fe and Córdoba. Farmers prevented milk from entering the plants and there was a five-day shutdown. The farmers’ main concern was the difference between the producer price and the retail price of milk.

An unfair differential
Francisco points out that when the protests erupted, farmers were paid about 1,45 Argentine Peso/l (R2,40/l) for milk. This was at a time when the average input cost was 1,80 Argentine Peso/l (R3/l), while the consumer price was roughly 7,60 Argentine Peso/l (R12,70/l).

The protests ended with a commitment from the Argentinian government to review the retail chain that absorbed the largest portion of the profits. The producer price for milk has since increased to just above 2,00 Argentine Peso/l (R3,40/l), but input costs for farmers have also increased. Francisco says the government has done nothing to improve conditions for dairy farmers.

According to the Rosario Stock Exchange, Argentina produced 11,6 billion litres milk in 2011, but due to dwindling confidence in the industry, this figure fell to 11,3 billion litres in 2012 and could be even lower this year.

For more information, phone Denene Erasmus on 084 548 4606.