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Austrian family run successful dairy business with only 15 cows

There are few UK dairies which would be financially successful with only 15 cows, but for one Austrian family, processing and selling their milk has revolutionised their business. Emma Penny visits the Oberascher family to find out more.

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The family run a herd of just 15 Fleckvieh cows in Austria
The family run a herd of just 15 Fleckvieh cows in Austria
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How one Austria family find success with only 15 cows #TeamDairy

Ten years ago, Gertraud and Sepp Oberascher ran a very traditional dairy herd on their Austrian farm in a village 25km south east of Salzburg.

 

Their 15 Fleckvieh cows produced milk which was sold to the local dairy company and they worked off-farm to boost their income.

 

But in 2008, interested to see what she could achieve and seeking better returns for the farming business, Gertraud decided to start making cheese with their milk.

 

After a lot of trial and error, the family won an international cheese award in 2011, and a year later the couple, along with their children Christoph, Martine and Andreas, started to build the successful business they have today.

Main intro carried on

 

Now, the family sells 25 products processed on-farm using milk from their 15 Fleckvieh cows, including butter, yoghurt and 16 different cheeses which are matured from between six weeks and six months.

 

While most of the family’s produce is sold via farmers’ markets, they also sell and run special tasting sessions from their farm shop, which incorporates a state-of-the-art farmyard cheese processing unit.

 

This building, a traditional-looking Austrian alpine cottage, was built by the family using old wood, and sits directly across the road from the dairy, with milk piped underground from the parlour to the processing area.

 

Sepp explains building the factory and shop cost as much as building a ‘normal house’, but they were able to get an EU grant of €32,000 (£28,100), about 16 per cent of the total cost.

 

“The expensive bit was the cheese production room and storage fridges in the cellar. We also have a large oven for baking bread, a warehouse and storage area for items, such as the glass jars we sell yoghurt in.”

 

He explains Austrian customers prefer to buy yoghurt in jars as they believe it tastes better.

 

A 250ml pot of the farm’s natural yoghurt sells for €1.30 (£1.14), of which €0.5 (48p) is a deposit for the jar.

 

This is refunded when customers return empty jars, which are then cleaned and reused.

 

Despite the sizeable financial incentive for customers to return the jars, Sepp says there are still ‘7,000 jars out there somewhere which haven’t come back’.

Processing

The family attends three farmers’ markets per week, and on those days, the cows’ milk is collected by the local dairy company as the family doesn’t have the capacity to process it.

 

Of the 80,000-100,000kg of milk their cows produce a year, the family processes 50,000-60,000 litres themselves, the remainder being sold to the dairy which pays €0.42/litre (36.9p/litre) specifically for milk produced by cows fed on hay.

 

Processing and selling their dairy products boosts the farm’s returns to about €1.50-€2.50/litre (£1.30-£2.20/litre), though he cautions it is not directly comparable as there is a lot more labour involved with processing and direct selling.

 

Besides processing the milk to start with, at least 30 man-hours a week are required for selling at the three farmers’ markets, but these account for about 60 per cent of sales.

 

All the products come from the Oberascher’s 15 cows, which are barn-housed all year and fed cut grass in spring and summer and hay in the remaining months. The herd calves year-round to provide a constant supply of milk.

 

Sepp says the dairy prefers to buy milk from cows fed hay rather than silage and if the farm was also organic he would receive a milk price of €0.56/litre (49.2p/litre) from the dairy for the proportion of milk it collects.

 

Although he says the farm is ‘close’ to being organic, it would not qualify as there is no uncovered outside area for the cows. This is one of the key measures for qualifying as an organic producer under Austrian rules as many cows are housed all year.

 

“If we were selling all our milk, the organic premium would make a difference, but now we are direct selling it has less of an impact. Consumers are also far more interested in whether produce is local rather than organic.”

Austria farming facts

Austria farming facts
  • Austria’s farming sector, with 161,200 holdings, is dominated by part-time farmers, who account for 54 per cent of the total
  • Although geared towards small-scale farming, there is a trend for farms to become larger; 20 years ago, farms were an average of 31.8 hectares (78.6 acres), and this rose to 45.7ha (113 acres) in 2016
  • Farmers are also keeping more stock. The average holding had 20 cattle 20 years ago, and now this is 32
  • The country has, as of December 1, 2016, 1.954 million head of cattle, an increase of 1.1 per cent on the previous six months.
  • Last year, the country’s 537,000 dairy cows produced 3.63m tonnes of raw milk, with an annual average milk yield of 6,800kg
  • Just over one-third of farms specialise in keeping cattle, sheep or goats, while 30 per cent major in forestry and only 13 per cent (21,200 holdings) are classified as cash-crop farms producing cereals, oilseeds, root crops and/or industrial crops
  • About 90 per cent of Austrian farms are family-run. Of the 411,000 people employed in agriculture, 339,000 (82 per cent) are family members while about one-third of holdings are run by women
  • 36 per cent of Austria’s holdings are classified as mountain farms
  • Organic farming is increasingly popular in Austria, with 16 per cent of farms managed organically, an increase of 8 per cent (or 1,600 farms) from the previous survey in 2013. Most organic farms are livestock-oriented
  • Trade and industry make up about a third of Austria’s GDP, with agriculture contributing about 2 per cent. With an average per capita GDP of €27,000 (£23,700), Austria ranks among the EU’s richest countries

Demand

Cows are milked in a four-cow side-by-side unit, with milking taking one person about an hour twice a day. Besides cut grass or hay, cows receive a 2-5kg per day of a compound feed at milking. This must be GM-free, he says.

 

The farm rears all its youngstock, breeding replacements for the dairy herd and selling male calves to other farmers to fatten.

 

Using the Fleckvieh rather than an all-out dairy breed such as a Holstein means male calves fetch a much better price, and cows are tougher.

 

Youngstock are sent to other farmers who have mountain pastures for summer months, costing the family €50-€75 (about £44-£66) for each heifer or calf sent. Heifers are bulled at two years old.

 

With only 12ha (about 30 acres) of grassland and some forestry, the family would like more land, but renting grassland is also expensive, running from €300-€1,100/ha (£264-£966/ha).

 

“There are lots of horse farms and livery yards round here which have people paying monthly livery fees so they can afford these prices. There is a big demand for land and farms suffer,” he says.

 

Despite the difficulties of doing business in an area where land is at such a premium, it is clear processing and selling direct has revolutionised the Oberaschers’ farm.

 

But, with other farms seeing the potential for this, there is now more competition, says Sepp.

 

“We need to be good to compete – just doing it is not enough.”

 

With a recent award from the Austrian Agricultural Chamber for high-quality food production and professional marketing, the family are clearly determined to continue to improve, and to build on Gertraud’s initial enthusiasm for cheese production.

 

Sepp says: “Our aim is not counting subsidies – I would like to live from farming and direct marketing.”

 

In Austria, payments have been based on historic data, and this is now changing so most farms will receive about €300/ha (€121/acre – £263/ha, or £106/acre) even where they may have received more or less in the past.

 

“We can make money from added value agriculture and by thinking out of the box. Gertraud thought of it, and we probably would not still be farming if we hadn’t done it.”

Tasting sessions

Tasting sessions are hosted in the farm shop

Austria farming facts

  • Austrian farmers below a certain size do not have to pay tax, but with a growing income from direct selling, the Oberascher family is considering splitting their farming and dairy produce businesses to minimise any impact
  • The business can be also be split between two business partners for taxation purposes, which is something they are also considering
  • In general, where farms have a profit of more than €33,000 (£28,970), they will pay tax, and where this exceeds €50,000 (£43,900), the tax rate rises to 48 per cent of the net income
  • VAT is charged at 13 per cent and the farm also pays an annual tax of €100 (£88)
  • The Oberascher family receives about €300/ha (€121/acre – £263/ha, or £106/acre) in CAP payments, which includes a payment for ‘avoiding silage’ and for being part of a local regional programme
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