Time to wisen up on water

When it comes to survival here on the farm, the three things with the potential to make or break are:

  1. Our health
  2. Mother Nature
  3. The milk price

I only truly understood the health thing and the worst possible price scenario last year but Mother Nature has been playing me like a marionette since the day I took the reins. Just take a look at this mess:

Pasture growth rate (tDM/day)

Pasture growth rate (kgDM/day)

If it looks too technical, don’t worry, it’s just a graph showing how fast the grass can grow by mapping its production over the last 14 years.

As you can see, from May to August the growth rate is consistently low, irrespective of what falls from the sky. I guess the days are just too short to grow a lot.

Come September, the grass begins to take off. After that, it’s anyone’s guess what will happen but that’s when – if there’s enough soil moisture – we harvest the grass we need to feed the cows over summer and winter.

Make or break hinges on reliable water during 12 critical weeks of the year from October to December.

So, while this is the time we need it to rain the most, it’s also the time where the whole thing can shut down. Like it did in 2015.

pfs2015

Right when we should have been turning waves of excess grass into silage, we began feeding the cows to make up for bare pasture. It was a financial and emotional disaster. I found myself suffering panic attacks as I stood in the browning paddocks.

The models show that, in an average year, we can grow 13,432 kilograms of feed per hectare, while in a good year like 2011, we can grow 19,068. In 2015, we could manage just 6,279kg/ha. That’s less than half the average or a mere third of a good year’s growth.

On a 200-hectare farm, that’s a loss of 1430 tonnes of feed valued at, let’s say, $280 per tonne to replace. It adds up to a $400,000 feed deficit. Enough to send me scurrying off to the bank for a new mortgage.

pfstdm

Desperation is the mother of innovation
Thanks to the unquenchable thirst of the resources sector and some rather curious water policies, we are locked out of tapping into the vast aquifer under the farm.

Nonetheless, we do have some water in a farm dam and the dairy effluent ponds. Last summer, we installed a small irrigation system to get that precious water onto the paddocks.

It’s enough to properly water a fraction of the farm during those 12 weeks, so we’re keen to maximise its value, watering only the most water efficient crops.

What we’re learning fast is that, unlike rye grass, which shuts down in the heat, millet luuuurves a heatwave, so long as it has enough moisture. Our experience has been supported by new Australian research, which shows that millet is almost three times more water efficient than rye grass.

There are other benefits, too. Unlike brassicas, which invite repeated attacks by every bug under the sun from mites to moths, millet is pretty much indestructible. And, unlike sorghum, which can be toxic if fed too early, it’s safe for everything from calves to milkers.

Contrary to the traditional wisdom that you can’t milk off millet, you can, so long as you graze it when it’s short. Just like any grass, it gets too fibrous when it’s long and loses quality. Because it can grow visibly in 24 hours under the right conditions, that means you need to graze it often. Not a bad problem to have in my book!

Expect to see more millet planted here to make the best use of every drop of water we can offer, especially as climate change makes the seasons less and less reliable. Now, if only we could get access to that aquifer…

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.

 

Left behind in the dust

The farm in February

Still looking green

It’s at this time of year that three distinct classes amongst dairy farmers around here become clear for all to see: the lax, the leaf counters and the irrigators.

The beautiful green pasture seen from our verandah is something of an illusion. Take a closer look and it’s sparser than it was just a few weeks ago when we were squirelling away silage. More importantly, it’s growing at about a third of the speed. In contrast, the irrigators are powering along, growing feed as fast as ever.

Why don’t I irrigate then, you ask? Because I cannot. There is an indefinite moratorium on new irrigation licences for the aquifer that flows beneath our farm because it is dropping unsustainably. According to a report by the Department of Sustainability and Environment:

“Levels of groundwater extraction from the Latrobe Aquifer, in Gippsland, are well in excess of annual recharge. Monitoring of groundwater levels indicates that, as a result, there has been a regional decline of approximately 1 metre per year over the last 30 years (SKM, 2004). It is forecast that this rate of decline will continue for at least the next thirty years.”

Ironically, that’s not because too much water is being used by farmers.

“Whilst detailed estimates vary, the proportions extracted by different users are estimated to fall into three broad categories (Hatton, 2004, Fig. 1):

  • 85,000 ML from oil and gas production in the Bass Strait;
  • 25,000 ML for coal mine stability purposes in the Latrobe Valley; and
  • 10,000 ML for irrigation and industrial purposes…”

 

Other potential impacts of the coal, oil and gas production are alarming. The report discusses potential land subsidence, sea water intrusion, reduced stream flow and running out of groundwater altogether.

The Australian and Victorian governments have established multi-million dollar assistance packages for irrigators but the rest of the community appears to have been left high and dry.