Over the next three weeks, we will report the year two gross margin results from the programme focus farms. There is no doubt that this period, from November 2017 to the end of October 2018, was climatically challenging for all livestock producers, and this is clearly reflected in the results.
As well as this, the focus farms continue to expand and invest in breeding stock numbers which has also had an effect on gross margin.
Overall, we are pleased with the progress we are making in the programme. However, the spring herd gross margin is back £95/head compared to last year. This can be explained by looking at the replacement rate of the herd increasing from 16% in 2017 to 25% in 2018, or an increased replacement cost/cow of £148 year on year. This is due to purchasing more breeding stock last year as we try to build cow numbers once again.
We are now carrying more cows per acre and therefore can increase the stocking rate on farm. We expect to see this replacement rate to drop again to 15%-18% in the coming years as cow numbers stabilise. This will then be reflected in the gross margin.
The summer herd has kicked on once again, increasing from £618/cow to £733/cow, an increase of £115/cow. As cow numbers in this herd are more stable, there was no great increase in replacement costs in this herd.
At £733/cow, we are just short of the overall programme target of a £750/cow gross margin. We feel there is still room for further improvement and hopefully in the following couple of years we can achieve and even surpass this target.
The major difference between the two herds is that the summer herd is outwintered on a sandy hill. This cuts out all the bedding costs as well as some feed costs as we defer grazing for these cows in the back end of the year.
Major improvements have been made in the daily liveweight gains (DLWG) from birth to weaning across both herds. A lot of this has been achieved by better grazing management throughout the season, with rotational grazing having a massive effect on cow milk yield, which is really pushing the liveweight gain of the calves throughout summer. Improving the silage quality has also helped liveweight gains in the growing stock in the first winter, giving us a slightly increased sale weight at a cheaper cost/kg liveweight.
Plan for 2019
More of the same. We’re happy we are on the right track. We are increasing the number of paddocks on the farm to give us more control over the grazing.
When you look at the figures, the temptation is to push summer cow numbers. However, there is only so much ground on the farm that is suitable for outwintering. We feel we have the balance just about right for the farm at the moment. If there is to be a further increase in numbers we will need to consider additional housing.
The spring-calving cows are back by £153 on the baseline and £269 on last year, while our autumn-calving cows are up by £89 on the baseline and £9 on last year. The sheep are also back by £25 on the baseline and £13 on last year.
The drop in the spring cows has come from two things – a poor weaning rate and high feed costs for last winter. Weaning rate for this year came in at 73%, down from 90% in the baseline year. This was caused by a bull not performing. He had been vet-checked and all showed well, and he had also been seen serving cows. Unfortunately, he had low libido and failed to cover all of his cows.
This has resulted in the output per cow to the bull being £166 lower than the previous two years.
Coupling this with an increase in feed and bedding cost for last winter of £38 over the benchmark year and £108 over year one, it makes for some tough reading for the spring cows.
The autumn cows provide a ray of sunshine, with an £89/ cow rise over the baseline and a £9/cow rise over year one.
Again, feed and bedding costs have affected these results, with a £70 rise on the baseline year and a £150/cow rise on the year one results. However, a rise in weaning rate and a better sale price have more than offset this to leave a positive result.
The sheep gross margin reduction has been driven by the same two things – weaning rate and feed costs. While we managed to wean the ewes early and in good condition, winter 2017/2018 was very hard on the sheep. We started feeding the ewes in early December right through until the middle of May, when grass growth finally kicked in. This led to feed and bedding costs increasing by £6/ewe over the baseline and nearly £8/ewe over the year one result.
Despite the relatively high feed rate last year, it only managed to keep ewes standing still and as a result, our scanning was back by nearly 30%. Overall, we had an output per ewe that was £18 less than the baseline year and £2 less than year one.
Plan for 2019
Looking forward, we have taken several decisions that will help to reduce the impact of these changes. Firstly, with the cattle, we have been trialling woodchip as a bedding material. This has will help to reduce the straw costs for bedding. Secondly, while the season has helped, we aim to make more use of outwintering. This coming winter, we are going to have a greater area of forage crops established and the plan is for the spring cows to graze them off before they are housed. This should save straw and silage.
The bull that caused the problems has now left the herd. However, he did cover the 2018 bulling season before his faults were found. This will mean a lower weaning rate for next year too. Going forward though, we are keeping a closer eye on bull performance and have been noting cows bulling and whether there are repeats.
Sheep-wise we are looking at improving lamb value and at driving scanning rates. We aim to raise lamb value by finishing more of them ourselves, with the plan to use mainly forage crops to drive their growth. As far as scanning rates go, we are weaning the lambs a lot earlier than we would have in the past to give the ewes the maximum opportunity to build condition pre-tupping.
We are also looking at weaning the autumn calves earlier in the season to allow us to send the cows out to the hill and take pressure off the in-bye grassland. This would allow us to establish more forage crop to keep ewes through winter.