Two local farmers who left NI to buy farms abroad told their stories to members of the Ulster Grassland Society (UGS) during an online meeting last week.
In 2006, Rodney Elliott sold his farm in Maguiresbridge, Co Fermanagh, to set up Drumgoon Dairies on a greenfield site in South Dakota, US.
He originally started with 1,400 cows, but the unit has grown continuously. There are 6,000 cows on the farm at present and the Elliott family want to keep expanding.
“Even though we are a very large dairy farm, there are much larger dairy farms in this area.
“They will continue to drive the cost of production even lower than we can and that gives them an edge. We must stay below the average cost of production, or we will get eaten up,” Rodney said.
All milk from the farm is supplied to a mozzarella cheese plant and demand has remained strong throughout the COVID-19 pandemic. In 2020, Rodney’s average milk price was US$20.68/cwt, which equates to around 33p/l.
He said his breakeven milk price is currently US$16.50/cwt (approximately 26p/l), although the farm could operate at US$14-15/cwt as this lower breakeven price excludes depreciation of assets.
They are horrible, painful times, but it corrects itself
“There have been periods of time since we came here when we have been receiving lower than the cost of production. They have usually lasted six to nine months,” Rodney said.
“They are horrible, painful times, but it corrects itself. Farms go out of business, people decide to cull cows, production falls and milk prices rise. It always goes back up again. You are in it for the long haul,” he maintained.
We are still fit to achieve that today, but of course, because we have more cows, we have more debt
Growing the business has meant taking on more debt, although it is not something that Rodney is afraid to do. He explained that a key financial target is to keep debt below US$3,000 per cow.
“That was the goal when we started 15 years ago, and we managed to achieve it. We are still fit to achieve that today, but of course, because we have more cows, we have more debt,” Rodney explained.
The cows at Drumgoon Dairy are a three-way cross between Holstein, Jersey and Swedish Red. Annual milk yields are averaging 10,700 litres at 4.45% butterfat and 3.5% protein.
The Elliotts grow 700 acres of maize and 400 acres of alfalfa on the farm, with over 2,000 acres of maize purchased every year from other farmers.
Vicky Morrison and her husband William made the move across the Atlantic in 2007 when they purchased a 200-acre farm in Oxford County, Canada.
The Canadian dairy industry is controlled by quotas, so farms tend to be much smaller than in the US. For example, the Morrisons initially had a daily butterfat quota of 98kg, which equates to around 2,500 litres of milk each day at 4% butterfat.
However, their business has also been able to expand over the years. In 2013, the Morrisons bought a new farm in Essex County with 350 acres of land and 178kg of quota.
We are feeding 2t of supplement, and averaging 11,500 litres per cow per year
“We now have 255 kg of quota. We have 200 cows in total, and we are currently averaging 37l/day at 4% fat and 3.3% protein on twice-a-day milking,” Vicky said.
“We are feeding 2t of supplement, and averaging 11,500 litres per cow per year. Our March milk price was 81.9c/l, or Can$19.74/kg butterfat. It equates to around 47ppl,” she added.
The Holstein herd are housed full-time and calve all year round to suit the daily quota system.
Maize silage is also grown on the farm and makes up around 60% of forage in the diet, with the remaining 40% being an alfalfa/ryegrass haylage.
Vicky explained that their grassland is sown out in a 50% alfalfa, 50% ryegrass mix. At the start and end of the summer the ryegrass yields well, but in the midsummer when it gets hot and dry, the alfalfa delivers most of the bulk.
It is now almost 15 years since the Morrison and Elliott families left NI, but is buying a farm in Canada or the US something they would recommend to anyone now?
“If you’re brave and hardworking, anyone can do this, but right now, it’s probably unaffordable for most people,” Vicky Morrison said
“There are some farms for sale in Ontario and if you take the farm, buildings and everything and put that cost across the quota that you are getting, those places are Can$85,000 to Can$100,000 per kilo.
These farms are crying out for people to come in to help manage and run them
“It’s absolutely ridiculous, the amount of money that’s being put into quota,” she said.
Rodney Elliott said the main opportunity in the US is to work on large dairy units, and this can often lead on to the employee buying shares in the business.
“These farms are crying out for people to come in to help manage and run them,” he said.
Rodney gave the example of his heifer-rearing unit in Kansas, where he recruited a manager who had been working on another farm.
“Her starting salary with us was in excess of US$250,000 a year, plus a golden handshake to get her to come and work for us, plus a free truck and a free house.
“She’s good, she’s worth every penny,” he said.