NZ Farmer - Dairy downturn no worry for award winning farmers

During the dairy downturn, the bank knew it was a safe bet that South Canterbury couple Brendan and Katya Caird wouldn't get into financial strife.

Timaru-based ANZ senior relationship manager Richard Wheeler told a field day on their property that he rang Brendan Caird two years ago, apologising for not getting in touch sooner. "I said I've rung you last as of all my clients I am the least concerned that you are in financial trouble."

Even during rock bottom dairy payouts the Cairds continued to make a profit, achieving a return on capital of 2.7 per cent in the 2015-16 season, when most other dairy farmers plunged into debt. The resilience of their low-input, pasture-based system was recognised with their coastal Seadown farm, north of Timaru, recording the best Canterbury performance in the Dairy Business of the Year awards.

In what is likely to become common practice, visitors to the Cairds' dairy farm pass through a disinfecting foot bath, in response to the outbreak of mycoplasma bovis in South Canterbury.

Recording the lowest environmental impact across the competition, with low nutrient losses of 21kg of nitrate/hectare/year and 0.7kg of phosphorus/ha/year, the Cairds also showed they could be environmentally sustainable while still achieving top production and profitability.

Running a high stocking rate of 3.9 cows/ha, the Cairds milk 625 cows on a 160ha milking platform, achieving milk production per hectare of 1743kg of milksolids in 2015-16. Running kiwi-cross cows, their herd has a high breeding worth in the top 5 per cent nationally.

Superior cow performance through genetic selection and management of animal health led to an impressive feed conversion efficiency ratio of 10.4kg of drymatter/kg/MS, with cows producing 99 per cent of their bodyweight at 445kg/MS.

This superior production performance helped to keep farm working expenses down to $3.37kg/MS and operating expenses at an impressive $3.83kg/MS under irrigation.  

This year's competition was based on the 2015-16 season, when the payout plunged to $3.90kg/MS, the lowest for about 15 years in inflation-adjusted terms.

Contract milkers Scott and Kayla Searle look after the day-to-day running of the farm. The Cairds live further inland at Totara Valley, near Pleasant Point, on a 970-cow property they manage, one of two equity partnerships they are also involved with. Married in 2004, the Cairds have four boys aged between six and 12 years, with Katya working off-farm as a primary school teacher.

Brought up on a small sheep and cropping farm at St Andrews, just south of Timaru, Caird said a lack of opportunities when he left school during the late 1980s farming downturn led him into the dairy industry. He got a job with Temuka dairy farmers Alvin and Judy Reid on a 300-cow dairy farm with the intention of returning to sheep. After five years, Caird went into a 50 per cent partnership with the Reids on a farm they leased for a further six years. The partnership grew from 200 to 630 cows, giving Caird the impetus to start moving into farm ownership. The Seadown farm was bought in 2007.

The Cairds' philosophy is to keep it simple, but do it properly. While low input, one area the couple have invested in is technology, including automation in the shed and precision agriculture.

Automation in the 36-aside herringbone means only two people are required for milking, even during the AI mating season. Easing the workload are automatic cup removers and automatic drafting gates.

Smart cow collars introduced a year ago provide data on the activity and rumination for every individual cow in the herd, assisting with decision-making on heat detection, health issues like mastitis, and nutrition. As time was needed for a history of data to be collected, this was the first season they have been used for heat detection to assist with timely AI mating.

The SCR collars are linked to the Protrack programme, so if algorithms are outside normal for cow activity, then the computer system will automatically draft cows out when they come in for milking. Cows on heat are more active in the paddock, sniffing, bellowing and mounting other cows, while low activity cows may be unwell.

"It was picking up cows that I wouldn't have picked myself," said Scott Searle. Payback on the cost of the collars was expected to be two to three years in savings on tail paint and labour. Caird said the main reason for investing in the collars was to assist with mating and improve AI in-calf rates.

Precision agriculture has not only enabled the Cairds to be more efficient in water use, it has also reduced the farm's environmental impact.

Water, sourced through the Opuha Water irrigation scheme, was "stretched" on the farm and prone to water restrictions in dry years, said Caird. To enable this limited resource to be spread further, the farm changed from Rotorainer to centre pivot irrigators between 2010 and 2013 so smaller amounts can be applied more often. The largest 100ha pivot now has variable rate irrigation, which allows water to be applied at varying rates across a paddock. "This was initially to stop a track being damaged from watering."  

The next step was to have the whole farm EM mapped, a survey which emits an electro-magnetic signal into the subsoil to identify soil characteristics and soil moisture holding capacity. This enables water to be applied based on different management zones across paddocks, rather than the traditional blanket approach.

Soil moisture probes have been used by the Cairds for about 20 years to determine irrigation needs. The farm had good moisture-holding Templeton soils, which reduce the risk of leaching nutrients. About 200kg/ha of nitrogen is applied as urea little and often, with none applied between May 1 and mid-August.

In 2013, a 50-day storage pond with solids separator was built in conjunction with an increase in the consented effluent area to cover the whole farm. Effluent is pumped out monthly through pivots at low application rates of 3-5ml.

As soon as they have taken over any new property the Cairds have always fenced off any unfenced waterways. They pulled out a lot of willows in 2010 and have since done 200 to 300 plants a year of riparian planting.

Milking 600 cows this season, their recent focus has been on achieving per cow production at 450kg/MS/cow and 1700kg/MS/ha by improving pasture quality and more days in milk. The Cairds were one of the early adopters of growing fodder beet on the milking platform, which they have done for six years, feeding out from about April 10. Fodder beet has allowed the Cairds to milk longer into autumn while still reaching calving condition score targets.

Caird said he didn't change management in response to changes in payout price. "We run an efficient and low cost system that remains profitable in all seasons, as sometimes the payout can alter through the year."

As he likes to benchmark his performance he was involved with Dairybase and aimed to be in the top 10 per cent for Canterbury. "I don't know how you measure your performance otherwise apart from production, but that only tells you part of the story.

"We want to generate a cash surplus every year. For the last four to five years a lot has been invested straight back into this property into development, so we now need to be careful we don't over-capitalise."

Field day convenor David Densley, of Intelact, said a lot of dairy farmers do not measure or understand the profitability of their business. "If you do not measure that, how can you understand and manage it. Farmers now run multi-million dollar businesses and with volatility in milk payout prices this is vital."