John Versteden is a self-made man. With no farming background, he left the construction industry in the early 1990s and entered the dairy industry as a keen and ambitious farm assistant. Through hard work and good technical performance, he progressed to be a sharemilker with 1,200 cows over two farms.
An opportunity came up to lease one of the farms he was sharemilking on in the early 2000s. He subsequently bought this farm in 2002 and has since grown this business to milk 680 cows today.
“The first thing I had to do was to get the banks to believe in me. After buying the farm we got to grow it incrementally by buying neighbouring farms as they came up. Getting the chance to buy the farm we were sharemilking on was a big help as we knew the farm well and knew what it was capable of. Invariably, performance on new farms is always worse than you think it will be,” John says.
“Our philosophy is simple enough; we turn grass into milk so it’s important that we grow enough of it and that we have enough cows to eat it.”
Despite being a grass-based spring-calving farm, John still feeds a nice bit of meal at about 1t of grain per cow. In a very bad year, this might rise to 1.4t/cow. A bad year in Australia is a dry year.
John is farming in the Gippsland region of Victoria, about two hours away from Melbourne. Victoria is the dairy capital of Australia, producing 60% of the country’s milk from 4,000 farms.
Gippsland is the most intensive dairy region within the state. This is because the seasons are fairly predictable, with rain in spring, autumn and winter. Summers are dry and the majority of land in the region is not irrigated, so summer droughts are an annual occurrence.
Grass growth in summer at about 10kg to 15kg/day is lower than it is in winter at 25kg to 30kg/day. There are usually two peaks in growth, in spring and in autumn.
The Gippsland countryside is very green after lots of rain.
During the summer drought, cows are put on a 30-day rotation and are fed 6kg of meal and silage until they come out the other end. In very severe droughts, cows will be culled early.
Since 2005, John has been growing chicory on about 10% to 15% of the milking platform. Chicory is a green, leafy herb that is much more drought tolerant than perennial ryegrass. The crop is direct-drilled in early October and grazed for the first time in late November. Most farmers pre-mow chicory for the first grazing to avoid the roots getting pulled up.
John says he can routinely grow 16tDM crops of chicory which are grazed four times a year. The pre-grazing yield on the chicory can be higher than perennial ryegrass without affecting quality. Grass utilisation ranges from 8.5tDM/ha to 12.5tDM/ha. John’s farm isn’t irrigated but soiled water is spread over a portion of the farm.
The Versteden herd is nearly all Jersey crossbred which isn’t unusual in Australia but it’s not the norm either. John breeds his herd for nine weeks, made up of three weeks of AI and six weeks of natural service with stock bulls.
Fertility performance is poor enough, with 26% empty after nine weeks. John has only recently moved away from inductions so he expects empty rates to be poor for the next few years. His target is to have 16% to 17% empty after nine weeks of breeding.
The 200ha milking platform is stocked at 3.5 cows/ha. John has 60 paddocks on the farm ranging in size from 2.5ha to 5.5ha each. Interestingly, John has no gaps on the farm. To get cows into a paddock, John just lifts the wire with a big stick and the cows walk in under the wire. He drops the fence for machinery to access the paddocks.
Cows coming in for evening milking on John Versteden's farm.
There are 300 head of youngstock reared on a support block. The cows weigh 450kg liveweight on average and produce about 400kg of milk solids per cow, which John says varies from year to year by about 10%.
Along with the meal fed per cow, John makes silage on the farm from the surplus grass in spring and this is fed to the cows in summer and to build up grass in autumn.
Labour
There are five people working on the 680-cow dairy farm. Outside of calving time, John only does about 20 hours per week on the farm. He is heavily involved in the Australian dairy industry, as a farmer representative on various boards and organisations.
Jay is in charge of the farm when John is not around and he works an average of 55 hours per week. Rhonda is a milker who does about 35 hours per week.
One other part-time employee does about 25 hours per week. The heifer block is being looked after by a full-time employee. Total labour costs amount to $240,000 (€151,000) excluding John’s drawings.
Contractors do all the silage harvesting, chicory sowing and fertiliser spreading. John’s team feeds out the silage (in a feed pad) and tops or pre-mows paddocks as required.
The milking parlour is a 36-unit herringbone capable of milking between 250 and 280 cows per hour.
Land prices in the region are around $7,000/ac to $10,000/ac (€4,400/ac to €6,300/ac). John’s farm working expenses are $4.80/kg MS (€3/kg MS). This is before the cost of debt servicing is factored in, currently $0.70/kg MS (€0.44/kg MS). Milk price is currently $6/kg MS (€3.77/kg MS).
“This has been the best start to a season in a long time. The two critical months for us are November and April, if we get rain then we’re set up for the year. This November has been very wet. We’re not seeing a lift in milk production, but costs have gone way down.” John says.
Australian dairy industry
John is keen to stress the opportunity that exists within the sector.
He says that when he looks back at his path, there is no way he could have grown to his current level of net worth in any other industry.
But the Australian dairy industry as a whole is in decline. Total dairy output is about 9.5bn litres per year but this is declining annually and beef farmers are buying dairy farms to rear cattle.
There is a big variation in farming systems in Australia. I got to see the group report from a local discussion group in Gippsland. The amount of meal being fed ranged from zero to 10kg per day. Over the course of a year, some farms feed zero supplement, while others feed 2.5t to 3t of meal per cow and they could be next door to each other.
It’s the same with calving date. Some farmers calve in spring, some in autumn and more all year round. Higher feeding levels and spread-out calving patterns are the norm, rather than the exception.
Cow type is also mixed, with pure Jersey herds, Jersey crossbred herds like John Versteden’s and high Holstein Friesian herds.
Inductions are still legal in Australia and average empty rates without inductions are as high at 30%.
Despite its proximity to New Zealand, the average Australian dairy farmer has followed more of an American farming system over the last 20 years, increasing the use of Holstein genetics and using grain to drive increased yields per cow.
Despite the good weather being experienced at the moment, most farmers aren’t very happy.
The dairy industry has taken a hammering over the last few years and that’s why the industry is in decline.
Grain prices
Grain prices have gone from $250/t to $500/t (€160/t to €315/t) because of a severe drought in grain producing regions. Farmers who feed a lot of grain to their cows are seeing their profits erode.
Murray Goulburn (MG), the last farmer-owned co-op in Australia, was taken over by Canadian dairy giant Saputo last May. MG was sold after the company ran into financial difficulty and lost milk supply.
The former CEO was convicted recently of misleading the company’s farmer shareholders. He was fined $200,000 but all farmers lost money on their shares.
When MG ran into trouble during 2017, the company decided to claw back the milk price it overpaid its farmers. This triggered a mass exodus from the co-op and the company had to be sold.
Price-setter
MG was the price-setter in Australia and after it tried to claw back its milk price, Fonterra, which operates as a private company in Australia, decided to do the same, even though it wasn’t affected by MG.
There are three big milk buyers in the Gippsland area. These are Saputo, Fonterra and Burra Foods. Milk price is set at the start of the season and can be revised up or down. There is no such thing as one milk price for everyone and most farmers are getting different prices based on their scale and milk supply curve.
Contracts are short and farmers move between processors regularly. Current milk price is around $6.20/kg MS.
Read more
Building a $70m dairy business
New Zealand: meet share-milker Mark Sing
John Versteden is a self-made man. With no farming background, he left the construction industry in the early 1990s and entered the dairy industry as a keen and ambitious farm assistant. Through hard work and good technical performance, he progressed to be a sharemilker with 1,200 cows over two farms.
An opportunity came up to lease one of the farms he was sharemilking on in the early 2000s. He subsequently bought this farm in 2002 and has since grown this business to milk 680 cows today.
“The first thing I had to do was to get the banks to believe in me. After buying the farm we got to grow it incrementally by buying neighbouring farms as they came up. Getting the chance to buy the farm we were sharemilking on was a big help as we knew the farm well and knew what it was capable of. Invariably, performance on new farms is always worse than you think it will be,” John says.
“Our philosophy is simple enough; we turn grass into milk so it’s important that we grow enough of it and that we have enough cows to eat it.”
Despite being a grass-based spring-calving farm, John still feeds a nice bit of meal at about 1t of grain per cow. In a very bad year, this might rise to 1.4t/cow. A bad year in Australia is a dry year.
John is farming in the Gippsland region of Victoria, about two hours away from Melbourne. Victoria is the dairy capital of Australia, producing 60% of the country’s milk from 4,000 farms.
Gippsland is the most intensive dairy region within the state. This is because the seasons are fairly predictable, with rain in spring, autumn and winter. Summers are dry and the majority of land in the region is not irrigated, so summer droughts are an annual occurrence.
Grass growth in summer at about 10kg to 15kg/day is lower than it is in winter at 25kg to 30kg/day. There are usually two peaks in growth, in spring and in autumn.
The Gippsland countryside is very green after lots of rain.
During the summer drought, cows are put on a 30-day rotation and are fed 6kg of meal and silage until they come out the other end. In very severe droughts, cows will be culled early.
Since 2005, John has been growing chicory on about 10% to 15% of the milking platform. Chicory is a green, leafy herb that is much more drought tolerant than perennial ryegrass. The crop is direct-drilled in early October and grazed for the first time in late November. Most farmers pre-mow chicory for the first grazing to avoid the roots getting pulled up.
John says he can routinely grow 16tDM crops of chicory which are grazed four times a year. The pre-grazing yield on the chicory can be higher than perennial ryegrass without affecting quality. Grass utilisation ranges from 8.5tDM/ha to 12.5tDM/ha. John’s farm isn’t irrigated but soiled water is spread over a portion of the farm.
The Versteden herd is nearly all Jersey crossbred which isn’t unusual in Australia but it’s not the norm either. John breeds his herd for nine weeks, made up of three weeks of AI and six weeks of natural service with stock bulls.
Fertility performance is poor enough, with 26% empty after nine weeks. John has only recently moved away from inductions so he expects empty rates to be poor for the next few years. His target is to have 16% to 17% empty after nine weeks of breeding.
The 200ha milking platform is stocked at 3.5 cows/ha. John has 60 paddocks on the farm ranging in size from 2.5ha to 5.5ha each. Interestingly, John has no gaps on the farm. To get cows into a paddock, John just lifts the wire with a big stick and the cows walk in under the wire. He drops the fence for machinery to access the paddocks.
Cows coming in for evening milking on John Versteden's farm.
There are 300 head of youngstock reared on a support block. The cows weigh 450kg liveweight on average and produce about 400kg of milk solids per cow, which John says varies from year to year by about 10%.
Along with the meal fed per cow, John makes silage on the farm from the surplus grass in spring and this is fed to the cows in summer and to build up grass in autumn.
Labour
There are five people working on the 680-cow dairy farm. Outside of calving time, John only does about 20 hours per week on the farm. He is heavily involved in the Australian dairy industry, as a farmer representative on various boards and organisations.
Jay is in charge of the farm when John is not around and he works an average of 55 hours per week. Rhonda is a milker who does about 35 hours per week.
One other part-time employee does about 25 hours per week. The heifer block is being looked after by a full-time employee. Total labour costs amount to $240,000 (€151,000) excluding John’s drawings.
Contractors do all the silage harvesting, chicory sowing and fertiliser spreading. John’s team feeds out the silage (in a feed pad) and tops or pre-mows paddocks as required.
The milking parlour is a 36-unit herringbone capable of milking between 250 and 280 cows per hour.
Land prices in the region are around $7,000/ac to $10,000/ac (€4,400/ac to €6,300/ac). John’s farm working expenses are $4.80/kg MS (€3/kg MS). This is before the cost of debt servicing is factored in, currently $0.70/kg MS (€0.44/kg MS). Milk price is currently $6/kg MS (€3.77/kg MS).
“This has been the best start to a season in a long time. The two critical months for us are November and April, if we get rain then we’re set up for the year. This November has been very wet. We’re not seeing a lift in milk production, but costs have gone way down.” John says.
Australian dairy industry
John is keen to stress the opportunity that exists within the sector.
He says that when he looks back at his path, there is no way he could have grown to his current level of net worth in any other industry.
But the Australian dairy industry as a whole is in decline. Total dairy output is about 9.5bn litres per year but this is declining annually and beef farmers are buying dairy farms to rear cattle.
There is a big variation in farming systems in Australia. I got to see the group report from a local discussion group in Gippsland. The amount of meal being fed ranged from zero to 10kg per day. Over the course of a year, some farms feed zero supplement, while others feed 2.5t to 3t of meal per cow and they could be next door to each other.
It’s the same with calving date. Some farmers calve in spring, some in autumn and more all year round. Higher feeding levels and spread-out calving patterns are the norm, rather than the exception.
Cow type is also mixed, with pure Jersey herds, Jersey crossbred herds like John Versteden’s and high Holstein Friesian herds.
Inductions are still legal in Australia and average empty rates without inductions are as high at 30%.
Despite its proximity to New Zealand, the average Australian dairy farmer has followed more of an American farming system over the last 20 years, increasing the use of Holstein genetics and using grain to drive increased yields per cow.
Despite the good weather being experienced at the moment, most farmers aren’t very happy.
The dairy industry has taken a hammering over the last few years and that’s why the industry is in decline.
Grain prices
Grain prices have gone from $250/t to $500/t (€160/t to €315/t) because of a severe drought in grain producing regions. Farmers who feed a lot of grain to their cows are seeing their profits erode.
Murray Goulburn (MG), the last farmer-owned co-op in Australia, was taken over by Canadian dairy giant Saputo last May. MG was sold after the company ran into financial difficulty and lost milk supply.
The former CEO was convicted recently of misleading the company’s farmer shareholders. He was fined $200,000 but all farmers lost money on their shares.
When MG ran into trouble during 2017, the company decided to claw back the milk price it overpaid its farmers. This triggered a mass exodus from the co-op and the company had to be sold.
Price-setter
MG was the price-setter in Australia and after it tried to claw back its milk price, Fonterra, which operates as a private company in Australia, decided to do the same, even though it wasn’t affected by MG.
There are three big milk buyers in the Gippsland area. These are Saputo, Fonterra and Burra Foods. Milk price is set at the start of the season and can be revised up or down. There is no such thing as one milk price for everyone and most farmers are getting different prices based on their scale and milk supply curve.
Contracts are short and farmers move between processors regularly. Current milk price is around $6.20/kg MS.
Read more
Building a $70m dairy business
New Zealand: meet share-milker Mark Sing
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