Quota-Minimising the final sting

As you read this we are only seven months away from the end of milk quotas.  However, it looks as though there will be a sting in the tail with a superlevy almost certain and milk price dropping. 

The first step is to estimate how far over quota you are likely to be. A relatively simple method of estimating this would be to look at your milk sales for the same period last year and adjust for changes in cow numbers, % heifers in the herd etc. If you are likely to run significantly over quota, what are your options now?

1. Do Nothing
This is the easy option that some may opt for on the basis that:
-If most farmers ‘put the brakes on’ we might not end up with a superlevy fine or perhaps the EU will put in place a ‘soft landing’.
-Current milk price, even after recent cuts, in combination with higher milk solids will leave a margin from over-quota milk.
-The new phased payment Dairygold are offering will reduce my superlevy

None of these arguments stack up.  Firstly there is almost certainly now going to be a superlevy, with Dairygold and the country now seriously over quota i.e. 9.4% and 6.79% respectively at the end of July.  To put this in context, this year versus last is highlighted in the graphic below.

 

In addition, it appears highly unlikely that there is the political will at EU level to implement a ‘soft landing’ and even if there was, the scale of any soft landing, most commentators suggested a 2% butterfat adjustment, is unlikely to solve Ireland’s superlevy issue.

With current milk price 35c/L, typically higher milk solids in the fall of the year and the superlevy 28.65c/L, you could be left with a net payment of circa 10c/L.  However, this is before you take into account any costs! 

Finally, while the new phased superlevy payment scheme from Dairygold is to be welcomed and will certainly reduce the cash-flow ‘pain’ of a superlevy fine, it is no excuse for burying your head in the sand and shying away from hard decisions for your dairy business.

Key point
Calculate how far over quota you are likely to be. Don’t bury your head in the sand if you are over quota. Examine your options and take steps that are suitable for your farming business.

2. Reduce Meal Feeding
While meal feeding in the autumn is attractive if under quota (see page 6), cutting out meals this autumn if you are over quota is a no-brainer. However, remember there is little scope for reducing meal feeding in the spring as cows need to be fed correctly to ensure they produce enough milk later in lactation (after 31st March!) and go back in calf in 2015.

3. Once-a-Day Milking
This can have a large effect on milk yield. Previous Teagasc studies have shown cows milked once a day produce approximately 30% less milk in volume terms, than cows milked twice daily, albeit higher milk solids erode nearly have of this reduction. This option should only be considered in herds where the current SCC is less than 150,000. See the AHI notes section (page 19) for further details.

 

4. Cull Problem Cows
While you might be tempted to keep all cows if you are planning significant expansion, remember expansion will put more pressure on cows and bring additional time constraints.  This is an opportunity to cull all your problem cows e.g. high SCC, poor yielders, lame cows, late calvers etc.

5. Dry off early
Drying off cows early has significant potential on some farms. You should target thin cows and first calvers for an extended dry period. Be cautious about drying all cows in your herd early. There is a danger of some cows becoming too fat which can lead to difficult calvings, milk fever and other metabolic problems.

Remember the key nutritional target of calving your cows down in the correct Body Condition Score (BCS) range of 3.03.25. This is proven to have huge nutritional benefits in the form of improved fertility, improved milk yield and helps avoid difficult calving and metabolic problems e.g. milk fever. 

 

Key point
Body Condition Scoring (BCS) in late lactation is a very useful tool in planning dry cow nutritional strategies.

6. Other Options
These include:
• Feeding milk to calves-remember to avoid feeding antibiotic residue milk or high SCC milk to your replacement heifers and keep in mind the risks of Johnes disease.
• Switch from grazed grass to baled silage-opportunity depends on the availability of bales and your grazing targets.
• Lease cows to new entrants-likely to be limited opportunities and ensure to take steps to minimize any herd health risk.

Get in touch 

For further help and advice contact your local Agri representative

Meet all our representatives