Kevin McGrade produces the best-quality milk in terms of milk solids in the project, with annual averages at 4.75% butterfat and 3.55% protein. 2016 was a year of low milk prices but high winter volumes and Kevin’s high-component milk has helped the total milk revenue – representing 20% of the total farm milk sales.

The business received an average of just above 24ppl for all milk produced for 2016; there was 799,500 litres sold with milk solids of 525kg/cow.

In financial terms, the gross output for the farm (milk sales and stock sales) was £226,830 or 28.37ppl before Single Farm Payment. This was made up from 24.10ppl from milk sales and 4.30ppl from sales of calves and cull cows. Stock sales on this farm also included compensation payment for nine heifers with TB.

From a cost perspective, the four main costs on the farm are illustrated in Figure 1 below.

Total cash expenditure on the farm before loan repayments (both capital and interest), personal drawings and taxation totalled £170,446 or 21.31ppl.

If we input a personal drawing of £30,000 for Kevin, this moves total costs up to £200,446 or 25.07ppl before taxation, capital and interest repayments on any outstanding bank loans on the business.

Purchased feed continues to be well under control on this farm at £33,306. This accounts for all purchased concentrate for the dairy cows totalling 1,360kg/cow (feed rate 0.22kg/litre).

A total of 179t of concentrate was fed to dairy cows, representing 4.16ppl of the total cost base. Concentrate for replacement heifers and calves accounted for 9% of the total purchased feed bill, with 18t of concentrate fed to replacement heifers.

Fertiliser and lime for the year came in at £18,386. This includes lime spread on the farm during 2016 and 250kg/ha of chemical nitrogen.

Phosphate and potash was applied using compound fertiliser throughout the year.

What next for Kevin McGrade?

Improving soil fertility was a primary focus for me on the farm during 2016. Soil analysis highlighted only 20% of the farm was at an optimal fertility level for growing grass.

We got 40t of lime out during 2016 to help improve soil pH, but our main focus was on soil phosphorus (P), with some paddocks on the grazing block with index 1 and index 0.

We used some 0:46:0 at the start of the year and continued addressing the P deficiency during the season with compound fertiliser.

Urea was used throughout 2016 as the nitrogen source, with 248kg/ha applied. I will be very interested to see has the investment in soil fertility improved my P and K index. The farm will be sampled this month with results due in February.

Farm output has fallen during 2016, mostly due to very difficult grazing conditions throughout the year, coupled with poor milk prices, not encouraging me to feed more concentrate. The net impact is a lower milk output figure.

Normally, poor weather conditions are counteracted with additional purchased feed on this farm. However, to minimise the impact on farm profitability, I actually needed to reduce cost.

Cow condition remained good and fertility performance actually improved within the herd. Ultimately, the cow type on this farm allowed me to reduce purchased feed without any major impact on performance.

During 2016, I took the plunge to enter into a heifer-rearing contract with another livestock farmer. So far, so good – despite the fact that some heifers went down with TB on the contract-rearing farm within the first two months of the venture.

Currently, only maiden heifers are contracted, with the younger heifers still on the home farm. In terms of labour management, getting these heifers out of the system has allowed more focus on the main milking herd.