Top tips to prepare your farm for 2022/23!

It is amazing how quickly things can change in agriculture. It’s not that long ago I wrote about how it was still worth investing in nitrogen to maximise homegrown feed despite skyrocketing fertiliser prices. At that stage I wasn’t concerned about a late season break, nor about the price of grain sky-rocketing, and that’s without a change of government and the potential implications that may have. So the enthusiasm for a record milk price has certainly been offset somewhat by rising input costs.

So what can you do about it?

Well, the first thing is to not bury your head in the sand and say we will just do what we’ve always done and see what happens. This is the year to have a plan, and make sure that you stick to it as best as possible. Having a plan is what is going to take most of the stress out of the situation for you.

Two things remain critical in any year, but in tougher years particularly:

• You need to dilute cow maintenance (a significant fixed cost on a dairy farm) – by getting them to produce enough milk to achieve the financial budget whilst also taking care of cow health, body condition, and fertility.
• Optimise consumption of homegrown feed – as much as soil moisture and temperature will allow.

Here are some key considerations for this year given the above 2 goals…

This means that cows still need to peak on target to set peak intake. Once their intake peak is set and you are past joining, you will have a lot more options – namely, the option to reduce the grain feeding level. If you cut back grain too hard now and peak milk is effected, the intake peak will also be affected. This will mean that when you do have plenty of pasture around in spring, the cows won’t be able to eat as much of it, so the opportunity to really cut back on grain (without severely impacting on milk production in the lowest point on the annual milk price cycle) will be lost. In addition, you will reduce your chances of getting cows back in calf and will potentially lose more body condition that will be more expensive to replace in the dry period. Ultimately this strategy will extend the recovery period from this year. If you do a financial budget for this coming financial year and work out how much grain you can afford to feed, you might consider feeding three quarters of it between calving and joining, and the remaining quarter for the rest of lactation. This will undoubtedly give you the best value.

You only get one chance to set up the pasture base (build the feed wedge) for the year.

This means pushing as hard as you can afford with seeding, fertiliser, gibberellic acid and pasture management (residuals and rotations), despite the late break. This means all seed should be in the ground already, a minimum of 1 kg nitrogen per hectare per day (as per previous article) applied, monthly applications of gibberellic acid (or at least when you are spraying for weeds), and making use of sacrifice paddocks and strip fencing where possible to hold the cows up and avoid pasture damage. Once you have done all of these things, then fill the cows up on other forages to reach milk production targets.

Don’t carry any passengers in the milking herd.

Whilst homegrown food is in short supply you can only afford to feed purchased feeds to cows that are working hard and donating body condition to help pay for it. It is vital to know what it is costing to feed each cow so that you know where the cut-off is. What is the break-even point or cost in terms of litres of milk to cover the cost of the ration? Outside of selling them as either milkers or choppers, you might also consider drying them off early, particularly if they are young cows with good genetics and good potential but have had a rough run. This would rely on you having adequate homegrown feed for them as dry cows though.

Don’t carry any excess young stock.

Many dairy farmers have reared more than they normally would due to the opportunities around export heifers and also bull calves for beef given the current prices. Make sure if you plan on exporting heifers, you do it soon so that you don’t have to pay to feed them, and to ensure that the market doesn’t get shut down before you do. It is also important to budget for the forage requirements of the young stock that you are keeping. It is easy to forget about them when doing forage budgeting and that can leave a large hole in the plan.

Make sure that you have your forages sorted.

That is, once you have done everything you can do maximise the production and consumption of homegrown feed, know what else you have to feed them to meet production, health, and fertility targets. For many farms this might mean that you have to heavily feed them right through until the spring. The first option is to go for the homegrown silages and hays. Even if you do a back of the envelope calculation to determine how much you need, it will get you in the ballpark (Reid Stockfeeds can assist with feed budgeting). Work out your monthly average cow numbers (once you have pulled out passengers) and then build their diet assuming they need 12-14 kg dry matter of forage to be full each day. If there is only a ‘pick’ of grass once per day, that is probably only 1-2 kg dry matter (half to an hours grazing). If there is a ‘pick’ both morning and night, you might be looking at 3-4 kg dry matter (2 hours grazing – 1 hour each feed). Then if you allow for a maximum of 3-4 kg of almond hulls as well, you can work out how much silage/hay would be required. Nearly every farm can handle almond hulls if they have a front-end loader and either a spare bay in a shed, or some square bales that they can make a bunker out of and cover with pit silage plastic. At $120-130/t for 11 MJ ME with good fermentable fibre they are hard to go past as a forage extender i.e. allows you to stretch out your homegrown feeds as long as possible. At several of our stockfeed mills, Reid Stockfeeds can supply almond hulls in the grain ration. Any hay that you buy should be based on a feed test result, unless it is bought off a neighbour as grass hay at a reasonable price. All professional hay growers now understand that they have to sell on a hay test result so they shouldn’t be surprised when you ask for it. You should also consider buying your hay requirements now if your cashflow allows it. The key to acquiring the best quality hay at a favourable price is to secure requirements early.

It might be a good idea to do an annual report on your business.

As we approach the end of the current financial year this can easily be done through Dairy Australia’s Dairy Base, a web-based tool that allows you to enter your own data and will deliver you a review on physical and financial attributes of your business. This report can then be used to develop a cashflow budget for the coming year as well. There are plenty of consultants/service providers that can help with this. Most businesses that have their money invested would expect a financial analysis each year and have a report (and use it to build a forward plan) other than just what the accountant gives them at tax time.

We are being asked now if it is worth contracting grain still.

This is a decision that only you can make and depends on how much risk you are comfortable with. If you still take a grain contract now, at least you can budget on the grain price. I can’t see why the prices will ease much if at all between now and the next Australian harvest. In fact, we probably need a good crop somewhere in the northern hemisphere as well as in Australia if we really want to see some easing. To me this suggests that there isn’t much downside to contracting even now but you will need to bear in mind that there will be a $3/t/month carry change on anything that you lock in. You might like to contract requirements for 2-3 months at a time and see how that goes. This will mean that if something miraculous happens and the grain prices come down, you won’t be stuck with above market-priced grain for too long. The other perspective is that once you have contracted and have budgeted for it, you can forget about what the grain price does because it won’t affect you anymore. This is potentially a stress saver.

If you normally mill your own cereal grain and you don’t currently have your grain price locked in, you might want to consider feeding pellets as an option.

You can currently buy a range of pellets for well under the wheat/barley price and they will include protein (at varying levels), buffers, and vitamins and minerals, in addition to starch (what you are buying cereal grain for). If you are happy to think outside the square, there are also some co-product opportunities for those that are adventurous. These are probably best suited to farmers with mixing wagons but given the cost saving available, anyone with a spare bay or two in a shed and a front-end loader might be able to figure out a way to feed them.

Remember that there is still competition for milk

If you aren’t happy with your current company or you want to explore your options there is bound to be someone else who will give you an income estimate. Unless you are locked into a contract you are not trapped where you are in terms of a milk processor.

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