Fewer Cows Can Mean Better Profits

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Headlines are Cause for Celebration

Two Recent Headlines in the Farming Press Have Encouraged Me Greatly:

“Fewer Cows Can Mean Better Profits” & “Applied Nitrogen Not Always Profitable.”

8989267Both are the result of papers by Chris Glassey of DairyNZ.  The first was presented at the SIDE conference in July, and essentially it challenged the idea that running more cows always leads to more profit.  Trials on Ruakura farmlets have shown that rather than pushing carrying capacity to the limit many farmers would be better off reducing stock numbers and doing the herd better.

Today’s highly productive cattle need more and better feed, and reducing the herd size makes more feed available per animal, reduces costs and often results in more milk solids overall.  Glassey quoted the case of a farmer saving $1000 for every cow dropped. Production improved and he was able to make more silage for autumn use.

The second paper, to be given at the November Grasslands Conference, gives the results of farm-let studies comparing nitrogen use with a no-nitrogen regime.  The idea that putting on nitrogen does not necessarily produce more profit may be a surprise to some farmers but not to me or to eCOGENT members.

The outline of Glassey’s paper given in 3rd September issue of Rural News indicates that for six years out of nine, the profit from the no-N farmlet was about the same as from the farmlet receiving 181kgN/ha/year.  In the other three years the nitrogen farmlet was more profitable i.e. the value of the extra milk solids it produced more than offset the higher production costs.

The interesting thing is that pasture on the no-N block contained twice as much clover and, probably as a result of this, summer production was higher.  There were also more pasture species (including some weeds).

eCOGENT FARMERS

These results confirm the experience of many eCOGENT farmers who have reduced or eliminated N fertiliser and have found made little difference to overall profitability.  They also found that animal health costs went down and visual assessment scores for pasture and soil improved

Overall they have found that they are financially better off with less or no N.  They can say that with certainty because the management system they use involves close monitoring of the farm business environment including detailed analyses of pasture and animal production and associated costs.

These figures allow the use of two powerful decision making tools.  The first is a daily profit indicator that allows rapid assessment of the effects of any changes in management on profit.  The second is a herd size indicator that gives the optimum number of stock for the business at any one time.

These two practical tools enable farmers to make more accurate decisions on the amounts of supplementary feed needed, nitrogen use, optimum calving and drying-off dates, and so on. And their decisions are tailored to their own farm business circumstances and not based on rules of thumb or local averages. The tools work for farms ranging from one man or woman herds to the very large herds, and can lead to annual profit increases of 10 – 30%.

NITROGEN

20100805213607!NitrogenRencerGetting back to nitrogen – I believe that steering clear of N fertilisers gives other benefits that are less easy to quantify.  Heavy use of N produces a near monoculture of rye-grass high in N – what soil scientist Graham Shepherd calls “high octane” feed that results in more N being passed out of the cow, overwhelming the capacity of the environment to deal with it.  Heavy N applications are also a likely cause of soil carbon loss.  Avoiding N is a part of the strategy that a number of farmers are now using to achieve regular increases in soil carbon.

For years I have been saying that farmers should base their management decisions on profitability, and not on assumptions or the urgings of banks, dairy companies, or farm supply companies.  Reducing N use and lowering stock numbers are realistic and usually profitable management options that may be forced on farmers anyway to protect the environment.

Our experience is that if it is done carefully using the right business tools, farm profits should hold firm or improve in the short term.  In the longer term, profits will be more secure because the production system and hence the business will be more sustainable.

So why not start now?

Peter Floyd is the managing director of Cogent Farming Business Systems Ltd   

Phone 0800433376 or 0275968796

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