Case study: Chris Nixon
Chris Nixon: Orbost, Gippsland, coastal eastern Victoria
I last spoke with Chris back in early June 2018, at which time there was little feed of milker quality on the farm. The grain and canola meal that had been fed at the time was the last of contracts at locked in prices and grain prices were increasing rapidly. The autumn was a very poor one. In early June the next main trigger point was “no decent rain” by the end of August. Also, there was no feed pasture wedge at the start of winter to speak of.
I caught up with Chris mid December 2018 to find out about how he managed last winter and spring, as well as his summer management strategies already in place and those for the rest of the summer.
"Normally we milk 500 or over, we are currently milking 420. From Oct 2017 to 30 June 2018, I sold 400 beef cows. By September 18, we'd sold 100 dairy cows to - we've never done that before. We brought in three truckloads of cereal hay for cows to calve down on. Over winter we put in a mobile feeding infrastructure consisting of poly module matting covered with soil. The company that supplied the matting came out and took a video of us installing it ourselves. The video is less than a minute in length, but it gives you a pretty good idea of what's involved if you install it yourself”. You can view the video at https://www.youtube.com/watch?v=xCPB2uideKk
“The feed pad was up and running in early September. We literally saved about one third of the silage we would have fed out since early September. And that directly helped us to create a feed wedge on limited moisture over spring. We were going to run out of silage otherwise, where as we've now still got 300 tonnes left. Grain hit $500 per tonne for us around Orbost. Whilst the feed pad cost us around $150,000 using our own gravel from the property and buying concrete troughs and machinery hire it has saved us approximately 300 tonnes of fodder so the savings in fodder should pay for it over 12 months".
"As protein in the milking herd’s diet is our limiting factor and canola was unavailable, I bought in Palm Kernel (PKE) at a cost of $422 per tonne landed on farm. Wastage with PKE is high, but in the concrete troughs on this feed pad, nearly all the PKE is licked up. And it's a good mix with the maize silage because that's damp and the PKE sticks to it. We pushed ourselves to get the feed pad in as feed budgeting numbers were showing the longer we left it, the quicker we'd run out of silage".
"Although we sold 100 dairy cows, we've retained all our dairy heifers; 400 of them. We reared 220 poddies this year and we've still got 180 heifers from last year. So, we will re-stock relatively quickly if this summer season brings further rain. Normally we plant 40 hectares of maize - but this year we have done 90. We planted over October and mid-November, the last lot germinated just now on the back of those late November/early December rains".
"My current strategy is that most of the 90 hectares of maize will go to silage, because we haven't got any volume of silage around us. Or, if it comes in wet enough, I'll let it mature into grain and I can sell the grain at $400/tonne. And if we get 10 tonnes to the acre (25 tonne/ha); what cost $2,000 to plant could make $8, 000 to $10,000 (4 to 1 back on my investment). The trick is, this maize has been planted on low (swamp) country and getting it out of the ground is the hardest part and relies on rain to do this. Once it gets its roots down into the moisture all hell could break loose. It is expensive to plant and I've chewed up a lot of cash this season (as have many others up here) so my cashflow is a bit ordinary currently. Now the crop has germinated, the big risk now is too much rain flooding the country killing the crop or preventing harvest”.
"Before this recent rain - everyone was getting to the point of "what the hell do we do?" This shower of rain was a real "get out of jail" (102 mm over three weeks). On our farm, just before the showers, we had day and night grazing paddocks converging on each other and they were just about to meet in the middle and ‘It would've been all over’. And that's on slightly swampy country. Those on higher ground - their pasture had turned and gone yellow. And those along the river looked alright from the road, but once you got into the paddocks the pasture was spare (pretty thin)".
"None of us can afford to spend (turn) 60 to 70 per cent of their income into buying in feed - because we are simply not geared that way. I feel I've curbed the stress level because we started destocking early. The first beef cows we destocked we were getting $1400 for. The last lot of beef cows, which I really wanted to hang onto I only got $800 for. Because that's the way the market went as the dry continued to bite. The take home message there is that if you think you are going to have to destock get on with it early when the price is good. For us here in Orbost - if spring is failing and it hasn't rained by October and you are normally making silage, you know that you are going to have to start destocking”.
“Regarding key risks this summer, I see a bad scenario as "no further rain".
Even on the hill country where we've destocked there's some dry standing feed that can get me through for a fair while because we are so understocked. But if we must destock a second time round after last year's big cull it will just push out the rebuild of stock numbers from three years to five years for the beef herd)? – My strategy goes along the lines sell older and unproductive beef cattle first until left with a core herd of young cows and heifers. Then start on unproductive or older dairy cows but again keeping the heifers. In a drought you will pay early by destocking cows and losing cash flow, buying in expensive feeds, or selling heifers and retaining cows ending up with an old herd. Whatever your choice is you will end up paying for it. We now have a green pick, so we will hang on for another month or so and we'll sell (beef or dairy or both) in the new year if there is no follow up rain”.
A good scenario for this summer I see as "we get another 50 mm of rain before the end of December". So, it would be business as usual and we won't be looking to destock. I'll hang onto all the calves and start building numbers (beef numbers) back up. Because I have retained all my dairy heifers, the dairy herd will back in full production next season if it continues to rain. De-stocking of both dairy and beef has been our key strategy all the way through. I did not want to buy a heap of hay because of the cost and the strain that puts on cash flow, people involved in this farm enterprise, livestock and pastures. I think cereal and canola hay will come down in price and that there is more out there than people are currently understanding. I think cereal hay will get cheaper; especially after harvest is over and after Christmas; when sellers start saying "what are we going to do with it" or they want to free up some cash flow”.