What the numbers say about top dairy farmers

Agricultural consultant Penderis validates with statistics that the spending habits of successful dairy farmers in KwaZulu-Natal are skewed toward putting money into genetics – an expense that shouldn’t be sacrificed. Robyn Joubert reports.

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Since 1988, agricultural consultant Allan Penderis from Tammac Consultants has analysed the financial results of dairy farmers in south and central KwaZulu-Natal. It’s given him invaluable insight into which farm management strategies translate into the highest financial rewards.While farmers who come out in the top third of Allan’s client base have slightly bigger herds at 478 cows, compared to 403 cows as the group average and 314 cows in the least profitable group, they record a significant difference in milk production. “The top third of farmers sell on average 19,5â„“/cow in herd daily, the group average is 17,3â„“ and the bottom third 14,9â„“.

Milk sales, cattle sales income and total income are much higher in the top third group at R1 606,18 gross income/cow in herd/month, with 390,65 for the group average and 167,81 in the bottom group,” says Allan.

To Allan the answer is clear. “If we look at month-on-month net farm income, and which farmers are making the most money/cow/ha and per litre, the same guys are consistently in the top third and in the bottom third,” says Allan. “The difference is that the guys in the top third are spending more on semen and artificial insemination than the guys in the bottom third. We see it over and over again. The figures tell the story.”

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In 2007, top farmers were consistently spending a monthly amount of R24,48 on artificial insemination per cow, while the semen/cow in herd costs were R21,68 and R19,96 for the group average and lower group. The top third was also prepared to spend more on veterinary bills and medicine. “This points to the importance of herd health and genetic quality in achieving high production levels,” says Allan.

There is no question that farmers should go for the best genetics they can afford. “If you put a genetic ceiling on breeding, you’re going nowhere. You can improve the feed and the condition of the animals, but you put a lid on what your herd is able to achieve. know a farmer whose herd never produces more than 22â„“/cow a day even though they have feed to produce 27â„“. His neighbour, who spent money on genetics and artificial insemination producers 27â„“/cow. Bull semen is cheap and the financial
difference is enormous,” he adds.

Trevor Dugmore, Cedara animal science specialist researcher, agrees. “Farmers can’t afford to sacrifice genetics. It’s such a small cost in the whole equation. Even with crossbreeding, you should be using the best bull in that breed with the characteristics you want, not just a guesswork bull off the street. You have to test the bulls, and to do that you need milk records to see which bulls are suitable for your system, be it total mixed ratio or pasture,” says Dugmore.

Allan currently consults to 30 dairy farmers on predominantly grazing farms of mostly irrigated ryegrass and dryland kikuyu, with maize silage and hay, fed at strategic times and dairy meal fed at an average of 6,5kg to 7,5kg/cow in milk daily, ranging from zero to 10kg of meal/cow daily.

The financial figures also reveal that the top third spend less per cow on farm-produced feeds (including fertiliser, seed, herbicides, pesticides and contractor costs), as well as mechanical costs, labour and other fixed costs. All the groups spend the same on farm-produced feed as a percentage of their total feed costs. “That figure is in the region of 30%, which is good,” says Allan. “This is something we encourage all farmers to do.”

As an indication of efficiency, for every R100 that Allan’s top clients spend on the milking process, they make R41 profit. For the bottom group, this figure sits at R10. “The essential difference between the top third and the bottom third showed the importance of production per cow in herd, herd fertility and the relative unimportance of herd size. In New Zealand, they say the more profitable a farmer is, the bigger he is – not the bigger the farmer, the more profitable he is. This is something we agree with. Work towards becoming more profitable before looking at expanding herd size to improve profitability.”

Contact Allan Penderis on (039) 834 1405 or 082 872 8681 or e-mail [email protected] |fw