An investment worth £3.5 million to establish a 1,350-cow dairy unit in 2012 focused on utilising grazed grass to produce milk for manufacturing. Despite a challenging start, this is paying dividends for Sansaw Estate, Shropshire, where plans are being made for expansion. Simon Wragg reports.
Scale was a key factor in the business plan for a new dairy unit at the 1,415-hectare (3,500-acre) Sansaw Estate, near Hadnall, Shropshire, explains managing director James Thompson, whose family have been in residence for six generations.
He says: “In 2011 the estate had the opportunity to acquire back tenanted land giving an in-hand farmed area of 750ha. Previously, the farm included organic pigs, cereals and vegetables, but we felt there was no opportunity in the organic market for growth on which to scale up the larger in-hand operation.
“Having done a SWOT analysis – including whether the estate should actively farm or not – several factors were in favour of establishing a grass-based spring-calving dairy herd.
“We like livestock, but could see there was little money in beef production. The average field size of 4.5-5ha does not sit comfortably with modern large-scale arable production.
“But being on the western side of the country, we can grow grass well and we sit in a very competitive milk field. Our belief then as now is a low input dairy system is more likely to cope with volatility in commodity markets and is easily scaleable as opportunities allow.”
Based on a 450ha (1,111-acre) grazing platform stocked at three cows/ha (about 1.2 cows/acre), a unit for 1,350 cows was planned. It involved a visit to New Zealand looking at a number of grass-based dairy units to get ideas on layout and management.
By June 2012, a planning application was lodged for a green field development for a 70-point rotary parlour, milk silos, feed pad, silage pad, lagoon, underpasses and cow tracks.
Mr Thompson says: “It progressed exceptionally quickly. The first building works were started in July and by the following January the first cows were going through the parlour.
“What we have at the dairy is essentially a huge slab of concrete and a lagoon.”
Construction included six underpasses and was dogged by continuously wet weather ‘since the first digger bucket touched the ground’, says Mr Thompson’s wife and business partner Asa.
Sourcing sufficient heifers and cows for the grazing system meant purchasing from 40 separate herds.
Mr Thompson says: “We use Jersey cross Friesian genetics, predominately black-coated, which are able to produce 4,500 to 5,000 litres annually predominately off grass, feeding 500kg concentrate per cow through the parlour.
“We need these to calve once every 365 days, walk up to 6km a day and target for a mature bodyweight of 450kg. Half were sourced in
Ireland and the remainder from good grazing units across the UK.”
The aim is to calve the herd in a tight 10-week window from February (60-70 per cent in the first six weeks) matching peak yield with peak grass growth. This is achieved by operating a stringent breeding plan. AI is used for six weeks and followed by four weeks of sweeper bulls.
Any herd members not in-calf are sold along with the breeding season’s Friesian sweeper bulls.
He says: “We do not carry stock unnecessarily. The bulls serve their purpose and are sold immediately.
“It is the same for cows susceptible to mastitis. We need a simple system and low maintenance cows, so unfortunately they have no place here. We milk record four times a year and data is used to identify problem cows for attention.”
Calves are taken at birth with cows going straight out on to fresh grazing having been over-wintered on fodder beet and round bale grass silage.
Heifer calves go into a dedicated rearing unit run by two full-time staff, Ioan Hughes and Breiffni Daly, where mortality losses are under one per cent. Low value Jersey cross bull calves are sold early through a local livestock market or dispatched to the local hunt.
Mr Thompson says: “Depending on the stage in lactation and age, members of the herd pass through the 70-point Waikato rotary parlour once or twice a day. It is very much like having three herds of 550 cows split by calving date following each other.
“Two staff handle the movement of cows into and out of the dairy while two others milk, including assistant farm manager Matt Bosch. As we dry off on December 10, staff can take holiday over the Christmas period which is good for morale.
“At peak production we are sending away 25,000 litres a day from the outside milk silos to Arla for manufacturing. Typical constituent values are 4.7 per cent butterfat and 3.6 per cent protein. We use bore-hole water and glycol to recover heat during the cooling of milk, which helps to reduce costs.”
Milk hygiene is important. Separate silos outside hold colostrum, antibiotic milk, and that for public consumption, with just the latter used continuously throughout the 10-month lactation.
Cell counts mid-season are 100-120/ml with milking staff ‘educated’ on avoiding teat end damage. All cows are treated with an automated teat spray before walking off the rotary platform. Similarly, importance is given to ensuring the milking machinery is tested regularly for efficient operation.
A rigorous cow health plan is also in place. Stock are treated for salmonella, leptospirosis, BVD, IBR, husk (lungworm) and – due to cost – half the herd annually for rotavirus.
“We try to keep things as simple as possible,” says Mr Thompson.
Despite good management, some elements of business cannot be guaranteed incurring costs unavoidably. The unit’s business plan was devised originally on a base milk price of 27ppl; the first year of operation achieved 35ppl benefiting from strong world demand for dairy solids. However, the extra margin was nibbled away, literally, by unexpected feed costs in the wet spring of 2013.
He says: “Suddenly we had the herd coming on-stream, but insufficient grass to graze. New leys were still establishing and older grazing had yet to get going. It was simply horrendous.
“There was no choice but to buy maize from local farms as a buffer with our concern being to get early lactation cows back in-calf. By comparison, 2014 was the other end of the spectrum with too much grass.
“We walk the farm weekly measuring covers and then allocate the next seven day’s grazing using electric fencing where paddocks need to be split.”
Access to the grazing platform is provided by a substantial network of sand-based and concrete sleeper tracks. These include six underpasses avoiding the need for cows to cross local roads.
“It added to capital cost considerably, but good infrastructure is vital. We leave cows to walk themselves out to fresh pasture which has many advantages including reducing the risk of lameness,” says Mr Thompson.
“Surplus grass on the grazing platform is round baled and fed to dry cows in December while grazing fodder beet.”
Silage is taken off designated support land outside the grazing platform and ‘heaved up’ on a large flat concrete pad adjacent to the parlour, feed lot and lagoon – ‘a very simple design’, he reflects.
“We do not have a large machinery fleet, with just one tractor, a loader, a simple feeder box [only used for part of the year] and four quads. Much of the land work is contracted out.”
With experience of organic production gained before the focus on dairying, some principles are still used today. This includes under-sowing of wholecrop cereals with grass providing an immediate follow-on grazing. It also provides a low-cost means of reintroducing grass to the rotation, says Mr Thompson.
“Production costs are our main concern. The volatility of the commodity market for dairy products has seen large falls in recent months adding to widespread concern milk prices will fall. At 25ppl, we can just about cope with minimum capital repayments, but it will leave nothing for ongoing re-investment,” he says from monthly appraisals deemed vital to keep the business on track.
“Our aim is to be milking 1,600 cows by 2016 through two parlours. We have plans for a 24/48 swing-over parlour to be installed as some of the support land outside of the grazing area could be used more profitably. Our key driver again will be milk solids produced/ha.”