Friday, July 8, 2022

Farming for cashflow

When it comes to comparing dairying in different areas of New Zealand the Preston brothers, Lyall and Garth, have a distinct advantage. As well as their home farm at Ruawai, Northland they have an interest in 10 dairy farms in Southland through FarmRight. But they were quick to tell Federated Farmers Dairy council delegates when they came north in mid-February that while the Southland farms were “having a boomer”, they regarded their Ruawai farm as the most important.

“It gives us our cashflow whereas our Southland farms under Tony Cleland have opted for growth,” Garth said.

Their grandfather came to the area well known for its kumara growing from the Wairarapa in 1919 as a returned soldier to a block of 70ha.

“The stopbank had just been put in and there were only dead mangroves,” Garth said.

Their father doubled the size of the property, and built what was then a state of the art herringbone dairy and wintering shed.

His two sons, who have farmed in partnership since they were teenagers, have tripled the farm’s area and are now milking 850 cows. Four years ago they took out the Dairy Business of the Year award in the low input category.

Their average annual rainfall is 1100mm but in the five months since late September just 185mm had fallen.

“Last year we were making silage at this time,” Garth said.

If there was no rain by mid-March their intention was to dry the whole herd off. With production averaging 300kg MS/cow they might “get to 330kg MS/cow and call it quits”.

History has been repeating itself with Garth and Lyall recently spending $2 million on a new rotary, wintering and stand off platform and underpass. Development is 80-90% complete although a new calf rearing shed might still be considered.

“We’ve certainly broken the back of it,” Lyall said. “And we’ve cashflowed over half of that out of payouts.”

They run a low cost system, setting their own record last year with farm working expenses (FWE) of just $2.70/kg milksolids (MS). This season it will be over $3/kg MS due to lost production because of the dry summer which has seen their stocking rate drop from the usual 2.6-2.7 cows/ha to 2.5.

They calve in mid-June and had a “brilliant” spring but are now feeding more palm kernel than the usual 3% of total feed requirements, lifting this level to 6%. In mid-February 3-3.5kg/cow/day was being fed as well as the same amount of silage. While palm kernel cost 30c/kg to feed compared with maize silage’s 23c/kg, it was only a phone call away with no need for any investment in expensive infrastructure. But they hope not to use so much next year.

Cash flow

“We live by our own set of rules,” Garth said. “We don’t accept that a poor season or a low payout is a reason to be in overdraft. We have that facility but we’re not using it. We want to be in a position of strength for the good and bad times.”

They don’t want to increase the size of the Ruawai farm, aiming to keep systems simple for them and their staff. They may lift cow numbers slightly though.

With the 84m by 30m wintering and stand off pad they spent $250,000 on concrete in the first year and their builders talked them into putting in poles for the roof support. The next year they added $110,000 worth of rubber over concrete the cows lie on then last year finished off the project with the $130,000 roof.

Being able to move cows off their clay soils in winter has made a huge difference to pasture management and last year there were 200 cows on one side of the pad all winter. They ran out on the pasture at the end of their stay showing no feet problems. Mole and tile draining has also recently been carried out to reduce pugging damage in winter.

They’ve spent another $40,000 fixing a new effluent pond which can hold 13-14,000 cubic metres (m3) which is pumped onto the farm over summer.

No fertiliser was applied in their father’s time and they’ve reverted to nil inputs over the last two to three years. Olsen P levels are between 40 and 60. The soil pH is between 6.3-6.5 and pastures utilise an average of 12 tonne of drymatter (DM)/ha.

“We don’t regrass as much as we should,” Lyall said. “But species have survived and kept growing and some paddocks we haven’t touched at all.”

Garth happily admits kikuyu is his pet hate.

“And if it’s a big enough hate you get rid of it.”

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