Grazing infrastructure

With cows inside and fields empty, now is a good time to assess grazing infrastructure. This means roadways, water supply and paddocks.

Many herds have grown considerably over the last few years, and while land area around the milking parlour has grown too, often the infrastructure supporting the cows hasn’t increased in scale.

This results in roadways deteriorating, causing lameness and poor cow flow. The minimum roadway width for herds less than 120 cows is four metres and should be five metres for herds of between 120 and 250 cows.

For herds greater than 250 cows, the roadways should be six metres wide.

As Bertie Troy points out at Dairy Day on Thursday, the critical section of roadway is that closest to the parlour as this gets most traffic. Ideally, machinery should be kept off roadways to prevent wheels ripping up the surface.

The other thing that is poor on a lot of farms is the number of paddocks. Paddocks should be big enough to provide between two and three grazings during the summer.

Installing 36-hour paddocks allows for expansion of the herd and reverting back to 24-hour paddocks.

While the weather isn’t great now, an opportunity may come next month to touch up roadways and realign paddocks.

Spending the money before the year end will have advantages from a tax point of view as 100% of repairs and maintenance can be written off against profits.

Tax

On the subject of tax, it’s going to be a problem for many dairy farmers after a good year of trading. At this stage, options to reduce the amount of tax due is limited enough.

Entering a company is a drawn-out and complicated process so it shouldn’t be rushed, and even at that it’s not the best option for many farmers.

Buying a new machine will reduce the farm’s taxable profit by one eight of the capital cost of the machine.

But the machine still has to be paid for and if the money is borrowed, the loan has to be repaid every year, even when milk price falls, so this could put strain on cashflow.

The other thing to be wary of is buying a machine that is going to radically change your system of farming and your cost base, eg a robot or zero grazer. This must be carefully thought out.

Not every year will be as easy to farm as this so keep that in mind when wondering what to do with spare cash.

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