The Furze family, Tallangatta
Follow Paul and Jess Furze’s Focus Farm journey here.
Image by Robert White - Saputo
There was a very big discussion at the November meeting, which has left the Furze’s to answer some big setting questions- given this is a decision for them and much of the discussion was in confidence I haven’t reported on that meeting.
The March meeting focused on the Autumn start and with many support group members in full spraying or sowing mode attendance at the meeting was understandably low. As it is a crucial time, with no lull in work on the horizon for group members, we forged ahead with the meeting.
The group looked at the close up calvers and talked through the transition diet, calving area etc. Everyone was pretty comfortable with how the cows looked, the feed and the area. Excitingly there are plenty of calves due and as Paul explained after some previous low reproductive performances, they seem to have got it right and starting to get plenty of replacements; with all the options that then brings their business.
A store of vetch hay has been reserved to ensure these autumn calvers get pushed to peak. Given tight feed and cashflow during the immediate period the autumn calvers will be split out from the spring group and getting them back milking strongly is a big focus. As the vetch is limited and the spring calving herds production is holding without it, it was decided the best use of the vetch is to feed it to the Autumn calvers only to ensure they're well fed. This is obviously not the ideal position but as discussed on the day it is the best decision for the current circumstances and will maximise the profitability of the business through to when entire milking herd is back on 2 full grazings.
The group discussed the autumn sowing plan Furzes put in place with Darren McCormick from Normac. They will use irrigation start up and the weather forecast for follow up rains means that despite the high opportunity cost of $500-$600 ML water this home-grown feed option stacks up against buying in feed. Most of the farm is being sown to Italians because as discussed on the day the extra feed provided when compared to an annual is worth the extra expense almost always in this climate. There was a good discussion on Paul and Jess considering employing somebody to help with sowing if they come under time pressure as we all know timing is everything in farming.
In November the support group met on farm with a discussion on the veranda that fully engaged the group. The focus following the October meeting was on holding production as spring tapers off and before the summer cropping program kicks in. Paul and Jess have handled this period admirably, watching the cows and vat closely to ensure they are getting what they can out of the paddock and balancing it out in the dairy. Given recent seasons, the 1.82kg milk solids/cow/day that's currently being achieved is below the herd/farm potential but above what was budgeted for. This points to good current operational management and the potential to continue to improve further as the business matures.
Prior to the meeting, the Furze's were focused on making the most of spring, with irrigation a key component in keeping the pasture going while keeping one eye on setting up for a summer crop and autumn start up. The discussion for this meeting centred on the opportunity cost of water- what is the best use on farm vs what would it look like if they sold some. Paul and Jess have a big decision to make on this, weighing up: the area available for summer crop; time and risk of the cropping program; how much will be needed in Autumn; production potential; cost/risk of buying feed; and what the water market will do. With Spring done the feed gap on farm is pretty clear so Paul and Jess are watching the feed market closely, with water price at a point where selling water and buying quality feed could stack up favourably against using the water on farm.
Another decision that was discussed was around the option to profitably sell carryover cows and bring in high producing fresh cows. As mentioned above, there is a theoretical higher herd/farm potential than is currently being achieved, and a key component of achieving this potential is with an improved herd structure driven by improved reproductive performance. By buying in fresh cows there would be an immediate improvement in milk production and, with a subsequent improved reproductive performance, a long-term production and profitability outcome. The partial budget produced by Phil Shannon to outline these assumptions made the purchase option clear; however when Phil contrasted the partial budget against the budgeted cash flow and the current capital position, financing this option was highlighted as a considerable obstacle. So again the Furze's had plenty of fodder for thought.
Having already discussed the immediate operational decisions on riding out the dwindling spring, and the short/medium term discussions on how to utilise the irrigation water, whether to irrigate or sell and buying in fresh cows, the discussion moved on to projected performance of the farm for the year. Despite some operational improvements and options with water and cows, there is a lingering question on overall business balance. There was a long discussion on the best use of capital, debt, leased land/cows and operational surplus to achieve the best long-term outcome for the Furze's. In order to plot out what the most viable structure might look like the group decided to hold the next meeting on the out-block at Huon which is owned by the Furze’s.
The third meeting of the Furze focus farm coincided with the full swing of silage season. With decisions to be made a shorter, sharper and smaller meeting was planned for and the decision to forge ahead with the meeting proved to be a good one.
At the previous meeting there was a strong feeling from the group that getting the spring grazing right would spark an immediate production response and get milk production back toward pre-season budgeted expectations; so those in attendance were pleased to see Paul and Jess had done just that and results had followed. Paul is happy with both the bulk and quality of the silage he is making. The hope is to use the silage for the autumn-calvers all things going well. Once the spring is done, an assessment on the quality and quantity of feed produced will be known and the likely feed gap can be calculated.
Jess and Paul also did some big yards getting the irrigation system up and running, which should now pay dividends allowing for watering of fast growing spring pastures. Based on the forecast yield and costs, the irrigated spring pasture will be costing around $200/tonne, which the support group agreed was well and truly worth the effort, especially with a favourable milk price and large amount of uncertainty on bought-in fodder prices.
With so much still up in the air, the immediate feed plan is to:
- optimise irrigation to maximise feed produced
- set up for a dryland summer cropping program, assessing irrigation availability at the end of the month to see if an irrigated summer crop is a viable option
- keep an eye on the feed market to secure quality feed at a price the Furze's can make a margin on
- stay on top of grazing management using the Rotation Right Tool, as used in the Feeding Pastures for Profit program
All feed planning decisions are being weighed against cash flow, milk price, feed availability and feed prices. Whilst decisions have to be made carefully to ensure the Furze's don’t run into cashflow pressure, they still need to make the most of any opportunities to secure feed, hold production and to capitalise on the high milk price. It really is a juggling act with a lot of unknowns to play out....watch this space.
The group spent some time discussing management of spring and autumn calvers, in particular the 20% of carry over cows in the herd. With cashflow tight, selling some of these as choppers was discussed. The group also suggested replacing cows with a low margin-over-feed-costs with higher-margin cows given the availability of cheap and efficient replacements. This all stacked up from a budget point of view based on the milk price and current feed situation. The group raised considerations for the introduction of new cows including herd dynamics, the expected internal replacement rate and impact on cashflow, The calving dates of current and new cows was also raised as a major consideration, in particular in relation to the timing and size of the spring calving. Being such a big topic, the discussion was held over for a later meeting.
On the 2 September 2019, the Focus Farm support group spent a day on farm. Seeing the farm and the herd, and hearing from Paul, Jess, Phil and the Furze’s agronomist, Darren McCormack, provided the support group with a clearer picture of the Furze’s business goals and an opportunity to discuss opportunities to improve performance within their scope of funding and resources.
With cash flow tight and milk production down on expectations, there was plenty of discussion. Standing in the paddock on a warm spring day, the group was confident that by making immediate changes to grazing management, the Furze’s would see an increase in production as a result of increased pasture growth and fresh cows coming in to the milking herd.
The group discussed the importance of monitoring and adjusting grazing with the change in herd size and climate - shortening the round, adjusting allocations and checking the herd response. Following that, the Furze’s could consider opportunities to adjust the concentrate to improve the margin over feed costs.
Skipping ahead, discussion on silage making followed, with further discussion on labour, lost opportunities seen by late sowing in some of the paddocks and under-utilisation on lower priority areas of the farm.
Looking ahead, the group discussed the upsides of tightening the calving pattern, location of the maize crop, and associated irrigation, best use of the out-block and it goes on….plenty of discussions for the next two years of the Focus Farm project.
The Murray Dairy Focus Farm for 2019-21 was launched on 5 August 2019 in Tallangatta, a chance for the Focus Farmers, their support group and farm business consultant, Phil Shannon, to get to know each other.
Paul and Jess Furze’s story involves three kids, working in a law firm and getting a law degree, running a family dairy farm, purchasing the non-dairy portion of a family farm, driving a log truck while running a dairy farm, leasing a farm, upgrading the farm and vendor financing a herd, all to get a toehold in the industry.
Still establishing their business and strategy, the Furzes' are beginning their Focus Farm journey by concentrating on cost-effective ways to lift feedbase and milk production.