Nigel Corbett is the first of our Dairylink project farmers to be reviewed and he milked an average of 87 cows for the 12 months in 2016. To summarise, farm output from milk sales excluding the basic farm payment totalled £127,183 to the business. This is down £8,000 on the previous 12 months due to milk price and lower cow numbers. Other farm income from stock sales represented £23,816 made up from sales of Angus calves, and a significant culling in the dairy herd due to infertility and under-performing cows. Key performance information can be seen in the graphics.

From a cost perspective, Figure 1 highlights the total and the top four costs recorded on the farm. Nigel has been pro-active throughout the year in cutting cost, and while he has not cut cost significantly in any one cost category, he has lowered cash production costs on the farm to 17.25ppl before drawings and loan repayments. Fertiliser and lime cost totalled £12,282. This allowed Nigel spread his target chemical nitrogen of 210kg/ha and also target low index potassium (K) fields with potash.

The decision was made from the start of the year to focus on improving soil fertility rather than spending money on reseeding specific paddocks. He also targeted to spread lime on low pH paddocks on the grazing platform.

Purchased feed is still a major cost on this farm, coming in at £45,554 (down £11,500 on the 2015 figure) this figure includes concentrate for heifers and cull cows. A total of 172t of dairy cow concentrate was fed, which equates to 1.9t/cow or a feed rate of 0.27kg/litre. The remainder of the purchased feed cost was allocated to replacement heifers including some meal fed to cull cows during the year. A total of 16.5t was fed to heifers of both age groups, with a further 4t used on cull cows.

Nigel comments: “We have had a good grazing year on the farm throughout 2016, with 10t DM/ha grown on the platform during the year. Grazing conditions were close to ideal all through the year. We also have some work in the pipeline to improve farm infrastructure and allow more grazing on this farm, especially at the start and end of the grazing season.”

Total farm working expenses excluding loan repayments and a charge for own labour totalled £109,422, which effectively means the farm just about broke even excluding debt repayments if we assume a charge of £40,000 for family labour.

What next for Nigel Corbett?

For our business to improve on this performance, investment in stock and infrastructure is needed. Yes, milk price looks like it will improve and we should increase milk output over the next 12 months (see 2017 budget figures). However, for my business to survive and grow in the future, I need to push down my production costs even more. My target cash production cost including personal drawings and loan repayments for the 2017 year is 23.6ppl. To do this I need to get more grazed grass into the cow diet, more fertile cows with better fertility management, and also reduce purchased feed for milking cows and dry stock.

Investment

Under the Dairylink project I have a plan to invest into stock and farm tracks. The plan does involve borrowing more money, with half to be invested into stock along with proceeds from cull cows and the other half invested into infrastructure to allow better access to grass. We need to get more infrastructure into a block of land which is traditionally only cut for silage. This block is relatively dry for our farm, so access to this grazing in the early stage of the season will allow me to get the cows out earlier and still not reduce the area cut for silage.

Excellent milking facilities

While the farm has the advantage of excellent milking facilities, cubicles and slurry storage, this investment must be paid for and current repayments are a major drain on cashflow. Moving forward for this business is about focusing on key areas within the production system which can improve profitability. Holding the current level of production on the farm and pushing profitability through improved fertility, higher stocking rate, and better grass and grazing management while also improving milk solids is the key challenge for this farm.