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By Sarah Flack
What is the right number of cows for the farm? And how would that change if the herd was 100% grass-fed with a milking parlor? What if instead of going grass-fed, the herd continues to get some grain, and robots milked the cows? What about just investing in a better grazing system and soil amendments to produce more high-quality pasture and forage on the current land base? Is it better to buy the haying equipment or continue to have harvesting done by custom operators and buy some bales when needed?
When I get these questions from a farmer, I know that they are thinking through all their options, and asking the right questions. There are a wide range of very different management, feeding, grazing and milking systems on successful organic dairy farms. What works well on one farm may not work well on another! Each farm is uniquely different, so the planning process to make a well-informed decision takes some effort. This article is a quick overview of some of the key factors that have helped with the decision making process for some farmers with whom I have worked.
Usually the first thing to do is a thorough assessment of the land base and farm resources. It is critical to make sure the land base, and its capacity to provide pasture and stored forages matches animal numbers and level of production. How many acres of dairy-quality pasture are there within cow-walking distance of the milking facility? This is often what determines the new herd size, and is a key point that differentiates the organic dairy farm from most non-organic farms. But herd size also depends on what the pasture intake goal is.
A farm transitioning to 100% grass-fed will be aiming for a grazing system where most of the forage intake is from pasture. This usually requires more acres of pasture per cow once grain feeding is discontinued. Therefore, if there isn’t more land, the planned herd size may have to be reduced to be able to maximize pasture dry matter intake.
For a farm considering a robotic milking system, the pasture intake goal per cow is usually lower. However, the new grazing system has to allow continuous access between the pasture and robot. So, pasture on the other side of the road, unless there is an underpass, can’t be used by the milking herd. Although this system would include feeding grain and supplemental forages during the grazing season, with lower pasture intake, it is still possible the herd size would have to be reduced to match the land base available in order to ensure the farm would meet organic pasture intake requirements.
Sometimes at this point in the research and discussion it becomes clear that there isn’t enough pasture to feed the herd size to make the new management system idea work. But if the land base looks like it may support the new system, then it is time to dive deeper.
Looking at income and expenses
Next steps may include doing some cash flow projections to look at these new herd sizes. Cash flow projections can also help look at all the other variables that may change including: lower or higher levels of milk production (cows generally make less milk with no grain and more milk with robots), different organic pay prices and premiums, new loans (robots are expensive), lower or higher labor costs with different milking and feeding systems, increased feed costs if more forages have to be purchased. Since each farm is different, doing some of the number crunching will help each farm make a well-informed decision.
In addition to making sure the new system works financially, it is also important to factor in the farm family’s quality of life, and what type of management system best fits their overall goals. One farm that called me said, “my son wants to take over the farm, but only if we get robots.” This was extra motivation to figure out a way to make it work for them financially!
The initial cash flow projection can provide critical information for the decision making process. Then, if a loan is needed to pay for the new management system or infrastructure, that cash flow can be used to write a full business plan to help secure financing from a lender.
Some states have farm viability grant programs, which provide funding for farmers to work with a consultant or a team of advisors on business planning. In this process, farmers can learn how to do cash flow projections and enterprise analysis, and can also work with advisors to write full business plans. Some farm viability programs also help families work on intergenerational transfer or succession plans for their farms.
The initial process of asking the right questions, and the financial planning process, may also help by directing the decision-making process into looking at a totally different opportunity for the farm. Some farms, after researching several high cost options, decide to just invest in improved soil fertility, better forage harvest/storage equipment, changes to the feeding or grazing system, or minor changes to the milking system to improve milk quality, productivity or labor efficiency.
Given the current situation with the organic milk markets, this might be a good time to do some re-assessment of farm finances, land-base, herd size, infrastructure and management system. As some farms are asked to ship less milk, getting lower pay prices, or still looking for a milk buyer willing to sign them so they can transition to organic or grass fed, cash flow projections are a useful tool to understand what options work best for each farm’s long term financial sustainability.
Sarah will lead a workshop at the 2017 NODPA Field Days in Truxton NY, which will look at strategies for making well-informed and financially sound decisions on major farm management changes, such as whether a robotic milking system fits into your farming and grazing system, or if your farm is suitable to convert to an all grass-based system.
Sarah Flack is the author of The Art and Science of Grazing and Organic Dairy Production. She is a consultant specializing in grass-based and organic livestock production, and is known for her public speaking, workshops, books and numerous articles and fact sheets on a range of agricultural topics. Sarah’s approach in her consulting, writing and teaching is to empower farmers to create their own individualized management systems that can work successfully for them, their farm and family goals. In this practical and comprehensive approach to farm management, the planning and design process always include consideration of livestock wellbeing, plants, soils, water quality, farm labor, farm profitability and farm family goals.
Her focus is on helping to create more farms with good organic and grass-based management systems, which allow farmers to create positive change in their landscapes, livestock, checkbook and farm family quality of life. She works with dairy, beef, sheep, and goat farms, and is experienced with both organic and non-organic farming systems.
Sarah’s approach to working with farmers is based on what she learned while consulting, teaching and writing on the topic since the early 90’s. She grew up on a family farm in Vermont, which used high stock density management intensive grazing (called “mob stocking” back then) to successfully improve the productivity and ecological health of the land and livestock. She later studied Holistic Planned Grazing as well as the science behind pasture management in graduate school.
Posted: to Organic Production on Mon, Sep 18, 2017
Updated: Mon, Oct 22, 2018