The calm before the perfect storm for one nervous dairy farmer

A perfect storm is brewing. Collapsing global dairy markets, a fodder shortage, and a strengthening El Nino.

Milk price uncertainty

Just across the ditch, NZ dairy farmers are drowning in despair after the dominant Kiwi milk processor, Fonterra, this week cut its farmgate price forecast to $3.85 per kilogram of milk solids, down from $5.25. The announcement followed hot on the heels of yet another set of disastrous Global Dairy Trade auction figures.

The Global Dairy Trade auction results of 4 August

The Global Dairy Trade auction results of 4 August

 

Most NZ milk is sold via the Global Dairy Trade auction and an article from Stuff.co.nz neatly explains the situation for NZ dairy farmers:

DairyNZ chief executive Tim Mackle said the news was grim, but not unexpected and many farmers would now be in survival mode.

The drop in milk price would result in $2.5 billion dropping out of rural economies, Mackle said. 

“Milk price is now half what it was in 2013/14. We calculate around nine out of 10 farmers will need to take on extra debt to keep going through some major operating losses,” Mackle said. 

“For the average farmer you are looking at covering a business loss of $260,000 to 280,000 this season but for many it will be a lot more than that.”

It would have a big impact on rural servicing businesses. Drops like this had a cascading effect through rural economies, Mackle said.

DairyNZ analysis showed the average farmer now needed a milk price of $5.40 to break even.

Just a few months ago, dairy industry analysts were forecasting a return to better international commodity prices at the end of this year but opinions seem to be changing, suggesting that there will be not one but two years of pain ahead.

What does this mean for Australian dairy farmers like me? Well, the largest processor of Australian milk, Murray Goulburn, forecast a closing (or end of year) price to farmers of $6.05kg of milk solids just before its partial ASX float. It hasn’t yet revised that closing price but its biggest competitor, Fonterra Australia, says it will announce the results of its own July price review this week.

The big difference between NZ dairy and Australian dairy is this: NZ exports 95% of the milk it produces, while Australia exports just 38% of its milk.  The Australian domestic milk market is much more stable than international commodity prices, so we don’t get the dramatic highs and lows of Kiwi farmgate milk prices. At least, that’s how it’s meant to work.

I’m certainly relieved to have locked in a bottom to the price we are paid for 70% of the farm’s milk. We now supply Fonterra Australia, which accepted our bid to join “The Range” risk management program that sees our price bob about between an upper and lower pair of prices. If the milk price does collapse, we’ll go backwards at a rate of knots but will still be farming next year.

El Nino: more feed needed and less to go round

Sadly, I can’t lock in even a portion of our rainfall. With a strengthening El Nino predicted to persist into next year, the Bureau of Meteorology calculates just a 30 to 35 per cent chance of at least average rainfall for our region from August to October. That means we’re likely to have less surplus Spring grass to conserve as hay and silage. It’s a double whammy because the El Nino also suggests we’re likely to need more fodder than normal over summer and autumn.

To top it off, hay prices are already unaffordable and quality hay is scarce.

The perfect storm

In other words, we’ll need more conserved feed than normal with less than usual to make ourselves and, very likely, starved of cash flow to pay for extra loads from far flung places.

A milk maid’s survival plan

So, what do we do? We’ve already begun adapting by selling off our less productive cows to limit our demand for feed. Thankfully, cattle prices are high right now and the sale of those 13 cows will feed the rest of the herd for three weeks. I’m also spending more time hunched in front of the computer looking for any opportunities to cut costs and keeping an eagle eye on our budget.

A brainstorming and planning session with agronomist, Scott Travers, has helped us plan for extra on-farm cropping with brassicas over summer.

Cows grazing forage rape

The cows will be grazing more brassicas this summer

We’ll be planting several types of brassicas (which belong to the same family as broccoli and cabbage) that mature at different times in a bid to have leafy greens available for the cows throughout summer. The big risk, however, is that the weather will be too tough, even for summer crops.

To deal with this, we are planning another infrastructure project inside the bounds of our new kangaroo fence. Water from our freshwater dam will be mixed with effluent from the dairy yard and pumped over the crop paddocks. It will help the brassicas survive a dry sprummer and summer then help re-establish pasture during an unreliable autumn.

This modest irrigation system will cost money but it will slash the cost of spreading the effluent and should pay for itself quite quickly during a year when visits from the hay truck could spell the difference between make or break.

A perfect storm is brewing and, here on the farm, we are trimming our sails to suit.

 

A lunchtime punt on the farm

What a wonderful day to go boating!

Unconventional boat launching, granted.

Unconventional boat launching, granted.

 

“Nice? It’s the only thing,” said the Water Rat solemnly, as he leaned forward for his stroke. “Believe me, my young friend, there is nothing — absolutely nothing — half so much worth doing as simply messing about in boats.”

“Simply messing…about in boats — or with boats… In or out of ’em it doesn’t matter. Nothing seems to matter, that’s the charm of it. Whether you get away, or whether you don’t; whether you arrive at your destination or whether you reach somewhere else, or whether you never get anywhere at all, you’re always busy, and you never do anything in particular; and when you’ve done it there’s always something else to do, and you can do it if you like, but you’d much better not.”

“Look here! If you’ve really nothing else on hand this morning, supposing we drop down the river together and have a long day of it?”
– Wind in the Willows by Kenneth Grahame

Although my invitation for Wayne to unblock the effluent pond pipe was not quite so romantic as Ratty’s, it was a little more pressing.

All the manure that collects on the dairy yard while the cows are waiting to be milked is hosed away into ponds. This way, it can be reapplied to the paddocks where valuable nutrients are recycled rather than leaking into waterways.

Realizing we would run out of storage over winter, we had an extra pond excavated back in autumn. The system is now getting rather full but, still, the pipe from pond 2 to the new pond refuses to flow.

Damnation

Damnation: this should be a waterfall

We suspected the pipe was too long, buoyant and flexible, so the idea was to simply row in and saw some off. After a false start and some safety modifications (getting some hay band to stabilise the boat with an anchormaid) to the Good Ship Shi%, Wayne did just that.

Wayne wrestles with the Loch Macdonald monster

Wayne wrestles with the Loch Macdonald monster

The rotten thing still popped up defiantly above the surface. Another metre lopped off and it sank. Triumphantly, we waited for the water to flow. Nothing.

The next weapon in our armoury was a long piece of poly. Wayne thrust the two-inch down the throat of the pipe with all the courage of his Viking ancestors, daring a blockage to reveal itself. Four or five metres in – about where the two sections of pipe must join in the centre of the pond wall – it did.

Ah well, not every boating story has a happy ending, as Toad would attest. The next exciting episode will have to feature some serious yellow horsepower. Life on farm is never boring!

New technology sparks a revolution on farm

I will never look at cow poo the same way again. A revolutionary technology arrived at the farm this week that is a huge win for the environment and for the farm.

Slurry Kat

New effluent technology

While most of the manure produced by our cows (and they dump a massive 40 litres each every day!) goes straight back onto the paddock, we do have to wash away the stuff that drops on the dairy yard while they’re waiting to be milked.

Rather than allow it to pollute our waterways, we collect it in an effluent pond to be applied on the paddocks as fertiliser. Sounds ideal but, unfortunately, there’s been a deal of guesswork in knowing exactly what’s in it and what rate to spread.

The only way until now was to agitate the pond (at significant expense) and send a sample off to a lab before agitating it all over again and getting it out with a slurry tanker that literally splashes it all over the pasture like Vegemite on toast.

The local and forward-thinking Bowden’s Agricultural Contracting owner, Wayne Bowden, has just bought a Slurry Kat that monitors the nitrogen content of the effluent as it’s pumped out and lets me choose just how much is applied per hectare.

In practice, that means instead of saying: “Aaah, about a quarter inch thick, please”, I can say “60 units of N per hectare, please”. Wayne can even tell me how much phosphorous is going on.

Why do I care? It means less likelihood of leaching excessive nutrients and we don’t use too much or too little bought-in fertiliser.

How the Slurry Kat works
The Slurry Kat system involves three tractors:

  1. An agitator that ensures the heavy slurry at the bottom of the pond isn’t left behind
  2. A pump stationed at the pond to push the effluent out to the paddock at up to 160,000 litres per hour via a 5″ hose.
  3. The spreader tractor, which uses lots of hoses to dribble the effluent along the ground in lines.
Agitating the effluent pond

Agitating the effluent pond

Effluent agitator and pump

The front tractor pumps the effluent up the umbilical hose

Slurry Kat spreading effluent

Slurry Kat spreading effluent

How it helps us manage our effluent for a better environment and greater productivity
Aside from the extra information and control the system brings us, the benefits are:

  • Safety. Because there’s no need to reverse a tanker up to the effluent pond dozens of times, there’s less chance of someone falling in.
  • Lower greenhouse gas emissions. Manure dribbled onto the ground rather than splashed onto a plate and sprayed means less volatilisation of its nitrogen.
  • We can affordably apply effluent to paddocks 1.5 km from the effluent pond rather than limiting ourselves to those close-by.
  • Less odour. I couldn’t smell it from the road.
  • Lower access requirements – less damage to tracks and paddocks near gateways
  • Quicker return to pasture because there’s no thick slurry to wash off leaves.

Slurry Kat lines after 24 hours

Slurry Kat lines of effluent after 24 hours on the paddock


I love it (and, no, I didn’t get paid to say any of this)!

A day in the life of an Australian dairy farming family

I kept a time log yesterday. Here’s how our busy but not unusual day went.

5.00am Wayne hops on the quad bike to round up the cows and slowly and quietly bring them to the dairy

5.45am Milking starts

6.30am Marian hits her desk to catch up on paperwork before Zoe wakes and checks the online forecast. All three computer models agree there’s a little rain coming tomorrow. Better get the nitrogen onto those paddocks we just grazed early tomorrow morning!

8.15am Milking’s finished and the cleaning begins

8.30am Zoe and Marian shift the effluent irrigator, fill the pump with petrol and get it going.

Zoe with effluent irrigator

Time to shift the irrigator

9.00am Marian and Zoe arrive on the Bobcat to give Papa a kiss and cuddle before we head off to feed the springers grain and anionic salts. The new calf spotted being born last night is a baby bull, who will be reared by one of our neighbours. We bring him and his mother back to the shed.

Anionic salts

Anionic salts (Zoe pic)

9.30am The milking machines, the yards and the vat room are spotless.

9.40am The three of us walk a couple of cows across the road to start their annual two-month holiday before they calve.

Cows going on holiday

Cows going on holiday

9.45am Wayne feeds three rolls of silage to the milkers

10.10am Zoe and Marian bring back two cows from the holiday paddock to join the springers in the TLC paddock.

10.45am Zoe and Marian refill the effluent pump and set it off again

Refuel Pump

Refuel pump again! (Zoe pic)

10.55am We all meet up again to feed the youngest calves and muck out pens. Discover one is sick and Wayne heads off to town to get treatment for her and refill the jerry cans.

11.30am Zoe and Marian are starving. Lunch time!

12.50pm Treat the sick calf and muck out more pens while Wayne welds up a broken gate in the dairy

1.20 pm Wayne’s off to feed silage to the dry cows, calves and heifers. Zoe and Marian take a look at the heifers to see if any should join the springers. We decide to do a big sort out in one to two weeks.

1.40 pm Refuel the effluent pump and get it running again

1.50 pm Load up 10 buckets of grain to feed to the youngest of the one-year-old calves. They are very happy to see us!

Feeding Calves Grain

Grain for calves (Zoe pic credit)

2.30 pm Check a new pasture on the way back

Zoe checks new pasture

Check new pasture

2.40 pm Quick snack and conflab with Wayne. 15 minutes later, we go off to round up while he feeds our maremmas, Charlie and Lola, and takes a bit of a break before milking.

Cows on the track

Rounding up

4.10 pm Finally get all the cows into the yard – Wayne’s already got the first 32 cows milked. The cows were in one of the furthermost paddocks from the dairy, we had to set up paddocks along the way and deal with a broken fence. Also discovered a major water leak 🙁

4.20 pm Equipped with tools, start prodding around in the mud.
Zoe’s taking pics now while Mama makes a mess.

Zoe's pic of Mama looking for the leak

Mama looks for the leak

Oops! Zoe’s got a bootful but let’s make it funny.

Zoe on the Bobcat after mud accident

After a boot full of water

The cows crowd around us on their way back to the paddock.

5.06 pm The Eureka Moment! An old (but still connected) water line has burst a fitting.

Pipe fitting

Unearthed the blasted leak

5.10 pm Outta there.

5.15 pm Set the travelling effluent irrigator on a new path, refuel pump and pull the rip cord!

5.35 pm Marian and Zoe home at last!

6.25pm Wayne’s home from milking. The end of a big day.

Cows do a LOT of poo but nothing goes to waste

Cows do a LOT of poo. About 40 litres of the green stuff per day (that’s besides number ones). Because they spend all their time grazing in paddocks, most of it goes straight back onto the grass as nature’s own organic fertiliser. The stuff that gets dropped onto the yard twice a day while they’re waiting to be milked is a different matter, though. It would be environmentally wrong and illegal to let it run into waterways, so this yard manure is hosed into large ponds for storage and digestion by aerobic and anaerobic bugs.

When it’s dry during summer and autumn, we pump the effluent on to paddocks using a little travelling irrigator hooked up to a fire-fighting pump. The effluent is full of great nutrients and beneficial bugs, we save trucking in inorganic fertiliser (not to mention the concept of peak phosphorous) and avoid polluting our rivers. When the pond is just TOO full for me and the irrigator to keep up with, we engage a contractor to come and pump it out and spread it with a huge tanker.

That’s been something of a challenge this year. The tractor and fully laden tanker weigh about 45 tonnes and, because  summer was so wet, access has been very limited. In fact, they just can’t get in at the moment. The effluent spreader shook his head and suggested calling for some rock. The quarry owner shook his head and suggested calling in the grader, excavator and the bank manager. I just hung my head and looked at my boots. Then, my lightbulb moment! If I can’t get the track to the pond, bring the pond to the tanker! I’m getting the excavator in to extend the pond so it’s really close to an existing cow track. Mark, the excavator supremo, expects it to be here in a couple of weeks, so I should have some boys’ toys pics up then.