Dairy couple buys 350 cows out of cashflow during drought

Dairy couple buys 350 cows out of cashflow during drought

Business Management
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Gippsland sharefarmers Nicole and Brendan Saunders bought half their herd from cashflow in a single year.

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One year after landing in Australia, a Gippsland sharefarming couple has bought 350 cows out of 12 months' cashflow, thanks to a total revamp of their farming business.

Nicole and Brendan Saunders arrived in Australia from New Zealand at a tough time in July 2018.

The drought had pushed supplementary feed prices sky-high and their new Maffra, Vic, share farm was over-stocked with a 700-strong herd in light condition on skinned-out pastures.

To top it all off, the district received just a fraction of its average rainfall that year - the third failed season in a row.

But the farm bought by Mr Saunders' parents in 2006 had a potent advantage: a combination of dam, bore and channel water that allows for 6 megalitres of irrigation per hectare.

Now, Mrs Saunders has introduced another secret weapon in the form of a laminated A4 sheet on the dairy fridge door.

That single sheet (duplicated on the fridge at home and in the office) was a business plan created in a two-hour session during a Rabobank Farm Management Program that Bonlac Supply Company sponsored Mrs Saunders to attend.

It summed up everything she and husband Brendan wanted their farm business to achieve.

Operating costs were to be under $4 a kilogram of milk solids, production over 450kg MS per cow, pasture utilisation of more than 85 per cent, young stock grown out to benchmarks and grade-free milk quality with a bulk milk cell count of less than 150,000 cells/millilitre.

There were other goals, too, that helped the farm maintain a happy team and make long-term progress.

They have managed to tick almost every profit-related box, thanks to Mr Saunders's well-honed pasture management skills combined with Mrs Saunders's budgeting and planning skills.

And a massive dollop of courage.

The couple was not afraid of change or to fly in the face of convention.

"We changed our model and we bought in no feed," Mrs Saunders said.

In that one season, they changed the herd's genetics, the calving pattern, the feed base and the staffing arrangements.

Cow changes

Mrs Saunders said they were transitioning the herd from a Jersey foundation to LIC New Zealand genetics for an efficient, small-statured cow.

"Every Jersey that I've come across doesn't like to drink in my calf shed and I got over it," Mrs Saunders laughed.

"The first cow that will go down is a Jersey, they seem to be just suicidal, Kamikaze kinds of things.

"But that's just my preference, I know they suit others really well."

The cows - traditionally a split-calving herd - will now also be mated for a tight nine-week seasonal calving.

"I did a bunch of gross profit margins on that and quite a bit of analysis," the Fonterra supplier said.

"For us, the winter milk premium wasn't enough for the price of the feed that was required.

"It might change but we've come in during a pretty harsh year and you have to ensure your system's resilient because we're in an industry which changes from year to year."

Feed utilisation

The value of feed is not lost on the Saunders, who decided to avoid buying in any fodder that year to augment the 1000kg/cow of supplements fed in the bail.

Borrowing on Mr Saunder's Kiwi know-how, the couple strove for more than 85 per cent pasture utilisation rates.

"We use literally every single blade of grass, we utilise roadside grazing a lot and there's no way you could find long grass patches anywhere on the farm," Mrs Saunders said.

The couple also changed the pasture rotation system so the dry cows followed the milkers to optimise residuals.

To help provide a bulk of feed, they sowed 20ha of maize for the first time and took advantage of the drought infrastructure grant to install concrete bins in the dry corner of a paddock.

"That maize got us through autumn and winter," Mrs Saunders said.

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But it hadn't all been smooth sailing.

"With every system change, we talked to a lot of people, especially about the maize, but we actually got pretty scared," Mrs Saunders said.

"Ours was the only maize crop in the district that got nailed by cockatoos not long after it came up.

"It turned into one of those things that might have been a pretty bad risk."

Resowing proved successful and 8ha was cut as green feed through autumn.

The remaining 12ha yielded 250 tonnes of dry matter that made it to the silage stack.

The gamble paid off. Aside from avoiding the high price of bought-in fodder, milk production is up 25pc on the year before and rising.

People power

The Saunders farm employs three staff members, including two back packers housed at a nearby hostel who work a six-and-two roster and one local, who works four days on, four days off.

Every team member must complete Dairy Australia's Cups On Cups Off course and has a personalised training plan.

That includes Mrs Saunders herself, who benefited tremendously from the Rabobank Farm Management Program that Bonlac Supply Company sponsored her to attend.

"On the very first day, they had a mental health session with Tom Mulholland and his book, Healthy Thinking, has really changed the way I think, to be honest," she said.

"You need to justify your emotions: 'Why am I angry about this? Should I be upset about this? Why are you upset about this?'

"People lose a lot of a productive time on those negative emotions like anger, resentment, jealousy, those kinds of things."

"Something might happen in your life that gets you really, really down and you might struggle with that but you can't let one thing ruin the rest of your life."

The program also included sessions on financials, human resources, succession planning and goal setting but Mrs Saunders said the social element was equally as beneficial.

"The way everyone is at the moment with quite a negative view can get you down," she said.

"It was great to be surrounded by a group of people passionate about all types of agriculture that created such a great atmosphere of positivity."

Staying positive

Growing and improving the business helps Mrs Saunders maintain that positivity but the couple are more focused on profitability than expansion, so growth is more likely to come from diversification than intensification.

"We don't want more than about 1000 cows," she said.

"I like to be sure our animal welfare and everything else is on the ball and I think that when you stretch yourself too far, it can be hard to ensure that all of these practices are always being done the way we want.

"I envisage the dairy industry as making ethical food that people want and are happy to buy."

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The story Dairy couple buys 350 cows out of cashflow during drought first appeared on Stock & Land.

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