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News | Husbandry | Features | Milk League

October 30th 1999

Proved the banks wrong

By Con Hurley

Vincent Gorman has never had it easy. He left school in 1975, went to Ag College and worked on dairy farms in Holland. He was very keen to get into farming, but had very little capital.

Vincent's start came when he set up a sharemilking agreement with his brother on the 100 acre family farm in Laois in 1978. By 1983, he had built up to 70 cows and over 50,000 gallons of milk.

During the 80s, he got married, bought 20 acres, and went contracting as well as milking the 70 cows! A dwelling house was built on a separate site, in important decision when it came to selling on.

Then the opportunity came in 1990 to purchase 75 acres from his wife's aunt. Vincent and Mary cashed in their assets, bought the farm, and set up a dairy unit at Ballindrum Farm, Athy, Co Kildare.

"The banks told us it couldn't be done," says Vincent. "But now I have a developed dairy farm producing 72,000 gallons. All I want now is more quota to go to 100,000 gallons."

Additional income comes from tourism. The Gormans have a farm guesthouse and provide farm visits for CIE tours. Mary also works as a full-time teacher.

The farm in Athy was bought in 1990. "It was a new farm, and we had to build everything from scratch," says Vincent. "We built a new house, new milking parlour, reseeded all the land, laid down water and roadways, and put up a slatted dairy unit."

The 50,000 gallon quota was leased from his brother, and the cows were moved to Athy. A further 22,000 gallons has been bought since.

Looking back, Vincent had clear objectives he wanted to become a commercial farmer. The route was not straight, but he has got there, using various opportunities as they arose. The Gormans have now diversified successfully into tourism. This is bringing in significant income.

Vincent is now 42, and has clear plans for the next 13 years. Targets have been set for farm profits. "We want to clear all debts, have a good living and be able to retire from farming at 55," he says. `Retirement' might involve running a small business and plenty of travel.

Contracting should be considered

Vincent Gorman is farming a total of 120 acres - 75 owned and 45 leased. The 55 cow herd is autumn/spring calving and the 72,000 gallons goes into the Glanbia winter milk scheme.

One of Vincent's priorities is to supply high quality grass to milkers for up to ten months. A grass budget is set to ensure there is enough grass to graze by day from February 10 on by day and night from March 10. Grazing is scheduled to finish on December 1.

From May to the end of August, all grazing is precut. Vincent says this provides very clean regrowths and increases yield by almost half a gallon a day.

Average herd yield is around 1,500 gallons, and a target of 2,000 gallons at 3.4 per cent protein has been set.

Vincent does virtually all the machinery work himself, including silage cutting. There is an extra cost in keeping machinery up to date, but he says this is necessary to get through work sufficiently and fast.

The farm is in REPS. The £5,000 annual premium was not the main reason. There was a suckler/beef enterprise on the farm. "After BSE, I could see there was no future or money in beef," said Vincent. "REPS has paid off financially. It has reduced labour and allowed me to give more grass to the cows. It also ties in well with the tourism enterprise."

The judges were very impressed with the progress made by Vincent and Mary Gorman. Development to date has been massive. Concern is expressed over the high dependence on leasing, and the 2,000 gallon herd yield target.

The judges felt that the farm might be over-mechanised. Contracting should be considered. Perhaps costs can be further reduced and profits increased.

Looking ahead, the goals are clear. The judges suggest a focus on tax planning and capital allocation.

Focus on grassland management

Exceptional technical and financial progress are the key features of Martin & Margaret Carew's operation at Rusheen, Holycross, Bruff, Co Limerick.

Since the farm was taken over five years ago, the Carews have:

• Doubled net worth, and
• more than doubled profits.
• The farm is now throwing off a cash surplus, available for investment.
• Stock numbers have nearly trebled.
• Milk quota (owned and leased) has gone from 76,000 to 128,000 gallons.

• The grazing season has been extended by 60 days. Cows now graze from February 17 to December 17.

  Increased quota and a well-managed grass-based system have driven the operation forwards. The Carews own 60,000 gallons. The balance is leased with 180 acres, and total area farmed is 285 acres.

  Most of the investment has gone into reseeding, roadways, water supply, with very little into machinery and nothing into buildings. Extra stock are housed in existing buildings on own and leased land, but a long grazing season greatly eases the pressure on housing.

  Martin has focused closely on grassland management. Budgets are done to determine when to house, so that enough grass is available in spring. He will house the cows when total farm cover falls to 1800 kgs DM/ha, probably around Dec 1st. There is enough grass on an outfarm to keep some stock grazing right through the winter. The dairy herd calves compactly to grass and fertility is good. The AI season lasts from May 10th to June 17th. Then the bull goes in till Aug 17th. Martin says that only nine cows out of 147 did not go in calf. That's only six per cent.

  Milking performance is not as good. Delivery per cow comes to 850 gallons with about 70 gallons to calves. All cows have been bred from bull of the day over the years, with no culling.

  The judges feel that improved genetics are needed to take full advantage of an excellent grazing system. Martin has switched to NZ bulls this year. "The NZ cow is more suitable for a grass system," says Martin. "I expect them to be more aggressive graziers, easier to get back in calf, and produce higher solids."

  The question is, should he adopt a more aggressive approach to improving the herd even more quickly. This could involve culling, and bringing in better bred animals.

  Caution on investment needed

  Martin & Margaret Carew are planning to use their present strong position as a springboard to fulfil their long-term goals. "We want to be in a position to retire in 20 years," says Martin, who will then be 55 years old."

  "We intend to give our children a good standard of living, a good education and pass on to them our knowledge and principles. We feel under no obligation to set them up in farming or business."

  "We want them to be free to make their own decisions based on education and knowledge. Of course, if we have the resources, we will help them achieve their ambitions."

  Given Martin and Margaret's track record and their plans, the resources should be there to both provide a comfortable retirement and also help the children.

  The plan is to double net worth every five years. A profitable, efficient dairy unit is the engine, which provides the resources to achieve this growth.

  The dairy unit will be expanded if possible. A partnership agreement is under active investigation. If it happens, Martin intends to move back from milking cows in five years.

  Time released will be used to improve education and skills, spend more time with the family, and focus more on off-farm investment. A start has already been made with a significant purchase of shares.

  The Carews have established a position where the farm is delivering an investment surplus. This is the money left after all drawings, tax, and necessary farm investment is taken away.

  They intend to use this surplus to grow the business. The judges felt that some caution is needed. More competence is needed before taking on bigger challenges.

  Exceptional progress has been made on the farm, and this should be consolidated before moving on too quickly. Investment is needed in the parlour and farm yard to improve labour efficiency and environment.

  Massive progress

  Milk value up by 9.19p! Meal and fertiliser costs down by 14.85p! These two figures represent the huge progress made by Denis and Christine O'Donoghue of Bolomore, Rathcoole, Mallow, Co Cork.

  They were married 5ø years ago and took over the farm in 1994. Since then, they have revolutionised the farming system. Technically, massive progress has been made in the following areas:

  • Grassland management. Cows have gone from spending 263 days on grass to 301. Start of grazing used to be late March. Now, cows go out by day as they calve from Feb 10th on.
  • Farm Structure. Roadways have gone in, and 40 acres of the 60 acre home farm have been reseeded.
  • Milk protein has risen from 3.15% to 3.39% last year. The target for this year is 3.48%.
  • Calving pattern is very tight. This spring, the 43 cows and heifers calved in ten weeks, beginning on Feb 10th.

  This is a classic case of compact calving to good grass delivering the goods in terms of higher milk price and lower costs.

  Average milk price should hit £1.10 a gallon this year. "Kerry dropped the milk price by 3p this year, but I pulled 2p of that back," says Denis. This comes from the protein lift from 3.39% to the 3.48% forecast. Last year's milk price was £1.11 p, and that was 10p a gallon ahead of the average gallons supplied to Kerry.

  Good breeding policy is responsible for the high protein as well as a recorded milk yield of 1131 gallons, and expected sales this year of 1220 gals/cow. Herd RBI is high at around 119 for the cows and 130 135 for heifers. These are bred mainly from Munster bulls.

  Fertility is excellent. Last year's 72% conception rate was lowered this year due to a lepto problem. Nevertheless, all but two cows went in calf in a ten week period to DIY AI.

  Access to quota needed

  In the last five years, Denis and Christine O'Donoghue have built a dwelling house, a slatted unit for the cows, improved land, bought more quota and a 4WD tractor. Capital expenditure has been high. However, the farm is now well positioned to produce more milk.

  "I'd love to be milking 80 cows producing 100,000 gallons," said Denis. This will depend on the availability of land and quota.

  Progress to date on milk output has been mixed. Owned farm quota has increased from 30,389 to 41,352 gallons. The amount leased has varied a lot from a high of 28,500 to a low of 6,000 gallons.

  The judges were impressed by the tremendous progress made by Denis and Christine since taking over the farm in 1994. Investment has gone into more quota, machinery, buildings, land improvement and a new dwelling house.

  The judges felt that they now need to maximise profit on what they have already done, before further investment is undertaken, especially if money has to be borrowed. Technically, they are top-class performers. This gives them a definite edge. Longer term access to quota would be desirable.

  They also need to develop skills in financial management and planning.