Growing for higher profit

Since converting to regenerative and organic farming, Simon’s fortunes have turned, and he’s a long way ahead of the $57 annual profit he posted a few years ago.

Simon told Dairy Australia’s Grounds for Growth conference that his move to multispecies pastures and a focus on flexible management, grazing, stocking and milking had changed his fortunes.

He has fewer issues with herd health, better milk solids production and better financial outcomes since implementing the changes.

Not only has he changed the pastures, Simon had altered his milking times, changed his calving and feeding routines and peaked his herd at 280.

He credits a lot of the success to soil biodiversity improving soil function.

“If we look after the soil, it will look after us,” he said.

Simon told the conference in Warrnambool that the improved soil function was achieved by replacing rye-grass pastures with annual and perennial multispecies, including mixes of legumes, herbs and grasses.

“We’ve seen improved soil structure and aggregation, a lot higher air and water infiltration, and increased organic matter and water holding capacity,”

The pastures also extend the seasons with better growth going into summer and better rebound when autumn rains arrive.

There is reduced erosion and less pugging in winter. The higher ground cover with multispecies keeps the soil cooler during summer so there’s less evaporation and more regrowth with summer rain.

Grounds for Growth participants toured Simon’s farm as part of the soil and pasture biodiversity event supporting farmers with adopting multispecies pastures and other practices to improve soil health and function.

The Scott family has been on the land since 1939 when it was all native bush. His grandfather started as a potato grower with a few cows.

About 10 years ago, the farm was chosen as a Focus Farm and while they were hitting industry benchmarks, Simon said something wasn’t adding up.

“We were conventional and achieved pretty good results with low cost of feed per milk solids, but one year before going organic, my tax return showed a $57 profit for the year.”

At that point, Simon’s wife Linda wanted to leave the industry and while she now works off-farm, she also sees the light at the end of the tunnel with the new management.

Simon started by eliminating synthetic fertilisers, herbicides and insecticides.

“My opinion is that synthetic nitrogen destroys the relationship between the plant and the biology,” he said.

“We were up to 200 kilos of nitrogen per hectare, which was heavier than most dryland farms, but we noticed that over four or five years the responses diminished.”

Converting to organic wasn’t an instant success.

“When we went organic, the wheels fell off for 18 months,” Simon said.

“We went cold turkey, but I thought we spent over $100,000 on urea and other synthetics, if I put that into supplements that would bridge the gap and it did. We got through it.”

The results continue to impress, including Brix levels that never went above three per cent in the rye-grass now averaging 12-15.

The farm has been growing up to 17-18 tonne per hectare dry matter with summer crops, but this year that has reduced to about 8-10 tonne because of the dry spell.

The cows are performing well under the new regime. There is reduced lameness, production has been maintained and fat and protein levels have improved.

Calves are fed a bit of grain, but once they’re weaned, they’re on multispecies.

Despite the challenging season, Simon survived without feeding any hay to cows until the start of March.

“When you grow a multispecies pasture, you get the Darwin effect – each plant will grow more than it would on its own” he said.

“German research has shown four or more species will produce more biomass with no added nitrogen than one or two species with 200 kilos of nitrogen.”

Another big change has been with flexible milking times.

Two years ago, they spent the whole season milking three times in two days.

For the past 12 months they went back to twice a day because of the tough season and the opportunity to get more grain into the cows, but Simon is going back to the flexible routine.

“On reflection, I’ll never milk twice a day again,” he said.

The dairy is in the middle, but it’s up to 4km to either end of the farm.

“That’s one of the reasons for going to flexible milking – we used to have a lot of cows with lameness, now we have very little.”

The farm has been in Dairy Farm Monitor program for 12 years and is tracking well against other businesses.

The stocking rate is 70 per cent liveweight per hectare, on average with other farms, home grown feed consumed is five tonne per hectare, just below the region average, but they graze 3.9 tonnes per cow, well above the south-west average 2.3.

Home grown feed costs $79 a tonne less than half the regional average of $161 a tonne, and milk solids per labour unit is 64,000kg kilos versus an average 56,000kg for similar litres.

Feed costs of $3.36 are below the average $4.24 and an EBIT of $4.71 makes it the second most profitable farm per cow in the south-west, nearly double the average of $2.40.

The net income last year was $3 – double the south-west average of $1.50, and Simon predicts he’ll maintain $3 this year, while a lot of others will struggle.

“We’re batting above our weight and my goal is $6 a kilo milk solids profit.”

Enjoying a comfortable annual profit last year, Simon says it’s a big turnaround from $57.

More stories from Dairy Australia’s Grounds for Growth conference are in the national section of this month’s Dairy News Australia and online at: https://www.dairynewsaustralia.com.au/