Running a leaner dairy business

By Country News on August 10, 2016
  • Running a leaner dairy business

    Bryce, Jessica, Paul, Lisa and Chloe Mumford on their Won Wron farm.

  • Running a leaner dairy business

    Paul Mumford is thinking hard about every aspect of his dairy business.

Tight times demand a more economical way to run the farm. 

Paul Mumford has a passion for genetics and an award-winning stud, but in the current climate the price he is willing to pay for a straw of semen has fallen considerably.

Lowering his AI bills from $28 to $12-$15 per cow was one of the first decisions he made when the new milk price reality dawned.

“It’s very little in the big scheme of things, you are only looking at $10-$15 000 in savings there, but it’s one small part in an equation where we have to analyse every cost,” Mr Mumford said.

He doesn’t like to take the cheaper option for his Gelbeado Park Jersey Stud, but cutting back on AI expenses was a no-brainer when the milk price and tough seasonal conditions combined to punch a hole in the budget that he could drive a tractor through.

“Early budgets indicate I have a hole of $200 000, but that is before fully analysing the business,” Mr Mumford said.

“That is just with taking the easy not-so-important figures out of expenditure.”

Apart from the 320 ha home farm at Won Wron, the Mumfords own another 85 ha farm at Binginwarri, which is managed by Aaron Thomas.

“Early numbers show that the true milk price for this property is $4.21 and $4.16 at the other property, which reflects milk composition, flattened protein as well as calving period because of the milk curve,” Mr Mumford said.

“Our price is higher at this farm because we have a flatter milk curve, whereas the other farm is lower because it has a spring milk curve.”

The calving pattern is being scrutinised to ensure it is maximising every dollar that can be made from the milk yield.

“We are looking at whether we are on the correct calving interval,” Mr Mumford said.

“Are we able to move our calving period to maximise profitability? Not so much milk volume, but profitability is more the key.

“We need to think about how to do a whole lot of things a whole lot smarter.”

Cow numbers are also being questioned, with the normal peak of about 420 milkers likely to be dropped down below the 400 mark. It’s about making sure the cows are producing from the paddock, not from the silo or hay shed.

“It’s imperative this year that we grow as much home-grown fodder as possible to not only replenish our reserves but to feed the cows in a low milk price year,” Mr Mumford said.

“I don’t want to pick up the phone and order that truck load of hay. I think that last kilogram of product that you buy in is the most expensive kilogram you can ever feed.

“It’s giving you the feel-good factor of the cows looking nice and shiny and seeming nice and happy chewing the cud, but this year we can’t afford to do that.”

Mr Mumford also knows that he can’t afford to ignore calls or cut off communication with banks or creditors. With his wife Lisa doing the bookwork and Mr Mumford having a background in banking, they know the importance of being upfront and honest when it comes to finances.

“Our bank manager is our partner and we have a great working relationship. We need him as much as he needs us,” Mr Mumford said.

“Put the trust in them because they need to know they can trust their clients. Don’t try to pull the wool over anyone’s eyes or it will get really ugly.”

It’s a stressful time, but Mr Mumford feels like they know where they stand and what it will take to keep moving forward.

“It’s a hiccup. Finding out the milk price was good in that we now know where it is set. Now our job is to engineer a business that can get through that milk price.”

By Country News on August 10, 2016

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