How A 750 Cow Dairy Farm, Could Make $125,000 More By Employing 2 Extra Staff

The Small Things Make A Difference

Ive been using a 750 cow farm (Canterbury average) as an example. I have been saying that this farm should have 5 employees + the boss, instead of the usual 3 employees + the boss.

2 extra staff @ $35,000 each = $70,000/year extra wages

But if this farmer could:

• Increase fertility by 7% = extra $32,000
• Decrease SCC in just 5% of cows = $30,000
• Increase pasture quality by 10% for just 31 days = $63,000

Thats adds up to an extra $125,000

Subtract the $70,000 in additional wages = $55,000 better off.

By employing 2 extra staff, could this farmer:

• Train staff better
• Retain staff for longer
• Reduce hours worked by each employee
• Have less stressed staff
• Have more engaged staff
• Attract better quality employees

By attracting better people who are more engaged, better trained and generally less fatigued. Farmers are able to make lots of small improvements across the whole business.

The figures used here are examples of average performance being increased slightly. The productivity gain will be much greater foe farmers performing at below average.

6 Week In Calf Rate

• Average NZ 6 week in calf rate 65%
• 7% increase = an extra $115/ha profit
• $115/ha * 277ha = $32,000
• 7% increase in 6wk in calf rate @750 cows = extra 52 cows in calf
• Thats just an extra 1.2 cows/day in calf for 42 day period

"It's really easy to miss one cow on heat or miss a retained membrane after calving etc when staff are tired or rushed or not aware of all the things that contribute to a successful mating"

Mastitis

• 5% of cows contribute to 50% of Somatic Cell Count
• 5% of 750 cows = 37 cows
• Drop BSCC from 212,000 to 150,000 = to $31/cow
• $31*750 cows = $23,000
• Drop BSCC from 300,000 to 150,000 = extra .15/kgms
• 750 cows (@400kgms/cow) *.15 = $45,000 extra income

"Depending on what your cell count is and what the payout is, there's around $20,000 to $40,000 sitting there if you could just work on 5% of your herd"

Pasture Quality

• 10% increase in pasture quality = extra 0.4kgms/cow/day
• 750 cows * 0.4 = extra 300kgms/day
• Assume farmer can achieve 10% increase for just 31 days
• 300 kgms/day*31 days= 9,300 kgms *$7/kgms = $63,000 extra income

"You don't have to spend any extra money to get that; you're using the pasture you've already got, but we're just assuming you can do it a little bit better for one month of the year"

Disclaimer:

These figures are just hypothetical and based on assumptions. Before I get jumped on by people claiming I should have used $6/kgms rather than $7/kgms or that fertility figures should be $100/ha rather than $115/ha etc.

I'm just using some data that is easily found to illustrate a point that small gains added up make a big difference. 

Likewise, small losses add up to make a difference too. 

When I read figures showing:

• The average length of service on a dairy farm is less one year
• Staff turnover increases to 40% every September 
• Anecdotal evidence shows 1/3 of dairy staff leave the industry every year

 I'm sure many farms are missing out on profit.

Transcription

You know, this is the last time I'm going to talk about dairy farm staff, but I just want to make one last point and it's that the small things make a difference, they all add up. And, you know, I've been saying a 750 cow farm really needs an extra two staff, so that's an extra $70,000 a year. So, that's a lot of money, but I think if we just concentrated on three KPI's, or parts of a dairy farm, and if we assume that a farmer was at an average level of performance and they could make a slight increase on each one of those three areas, that they not only could cover their extra $70,000, but they would make an additional $50,000 as well.

                  So, the first thing I want to talk about fertility and the average six week in-calf rate in New Zealand is 65%. So, Lincoln University did some work and they increased the six week in-calf rate by 7%. And they said that was worth an extra $115 per hectare in operating profit. So, if we times that $115 per hectare by 277 hectares, which is what your 750 cow farm is. Then that's an extra $32,000 in profit. And that 7% increase is worked out to be 52 cows. You just need to get an extra 52 cows in calf over that six-week period, which is 42 days. So, that's 1.2 cows in calf and I'm saying if you had those two extra staff, would you be able to train your staff better and would you be able to do that?

                  So, the second thing is mastitis. Now, Livestock Improvement Corporation tell us that 5% f your herd attribute to 50% of your bulk somatic cell count. So, that works out to be 37 cows. And, they tell us if you drop your, or if you have an average cell count of 212,000 and you drop it to 150,000, that works out to be worth an extra $31 per cow. So, times that by 750 cows and that's $23,000. DairyNZ have some slightly different figures and they tell us if you could drop your cell count from 300,000 to 150,000, that's worth an extra 15 cents per kg of milk solids. So, on a 750 cow farm, that works out to be around an extra $45,000. So, depending on what your cell count is and what the payout is, now, there's around $20,000 to $40,000 sitting there if you could just work on 5% of your herd.

                  So pasture quality is the third thing. DairyNZ tell us that if you could get a 10% increase in pasture quality, that correlates to an extra 0.4 kgs of milk solids per cow per day in production. So, times it by 750 cows and that's an extra 300 kgs dry matter, sorry, 300 kgs in milk solids per day. And, let's just assume that you can get that 10% increase for just one month of the year, so 30 days. So, that works out to be an extra 9,000 kgs of milk solids. Times that by $7 payout and you're looking at an extra $63,000. And, you know, you don't have to spend any extra money to get that; you're using the pasture you've already got, but we're just assuming you can do it a little bit better for one month of the year.

                  So, let's add all this up. If you take a 10% increase in pasture quality for just one month of the year, that's worth $63,000. Concentrate on 5% of your herd and drop your cell count down to 150,000, that's worth $30,000 a year. If you can increase your fertility by 7% , that's $32,000 a year. Add that all up and that's $125,000 in additional profit or income. Minus your $70,000 for your two extra staff members, and you're still ahead by $55,000 a year.

So, I'm saying, with those extra two staff, would you be able to have a staff that are more engaged? Would you be able to train them better? Would they, would you be able to retain them? Would you be able to attract even better people to your farm? Because all you need to do, is make, you know, a little adjustment over those three areas, and you make your money back. What if you did over five or six parameters on your dairy farm? So, I think it's a false economy to understaff our farm