Dairy farming: Luke and Stacey Madden from Naringal East milk for the future
A CLOSE eye on costs underpins a buoyant southwest Victorian dairy operation, writes SIMONE SMITH.
LUKE Madden certainly had something to prove when he started dairy farming.
“I was hailed down when I left school, teachers saying ‘what the hell are you doing that for’,” he said. “I set out to prove them wrong, basically.”
And he has done just that.
The 36-year-old, wife Stacey and one-year-old son Tom now have their own dairy farm milking 220 cows at Naringal East, in southwest Victoria.
Like many stories of growth in the dairy industry, Luke’s path to farm ownership did not chart the common course.
He left school at 17 to take up a traineeship with the Rea family, with whom he worked for 15 years full-time and a “couple part-time”. During this time the farm grew from 500 to 700 cows. “I really enjoyed it and learnt a lot,” Luke said.
He saved as much money as he could, bought a block of land and paid it off quickly, later selling it at a profit.
In early 2009 he bought a 77ha beef farm, with the aim of converting it to dairying.
It was at a time when the dairy industry had just suffered the first mid-year price step-down since the early 1980s and it followed record farmgate prices in 2008.
The industry was in shock and for dairy farmers it was a stark reminder of the volatility that plagues an export-driven commodity industry. Many farmers halted plans for expansion or upgrades.
“It (the timing) actually worked in my favour,” Luke said. “I was able to get trades at a reasonable rate, everyone wanted work (and) I got a second-hand dairy.”
Doing a lot of the work himself, sourcing cheaper materials and taking advantage of a slowdown in construction in the industry, Luke said he built the 22-a-side double-up herringbone at half the cost of a new one.
FINE ART
THE farm provided a blank canvas to start from scratch for dairy, as Luke used to it run heifer agistment and some beef cattle during the construction, but only covered costs.
“There was an opportunity to do it (convert it to dairy) with a clean slate, do it once and do it properly,” Luke said.
“If we bought a run-down dairy farm it could take 10 years to get it to where we want it.”
After securing a long-term lease of 40ha next door, Luke started milking in March 2014.
“We started off with 180 and bought heifers and cows in and as well as building the dairy. There was money going out left, right and centre; people might have thought I was mad,” he laughed.
Right from building the dairy, increasing the pasture fertility and upgrading tracks and troughs, costs have been a huge focus for the young couple. They know what drives profitability and hone in on these strengths.
The crossbred herd, which weighs an average 500kg liveweight, consumes eight tonnes of dry matter/ha, producing an average of 540kg of milk solids.
Pasture growth and consumption is a priority on the dryland farm, which receives an average 850mm of rain a year. Although crossbreds were the “cheapest (cattle) to get” when the farm was established, Luke said they remained “fantastic at converting grass”, which is the key to their business. The farm is stocked at about two cows a hectare.
Cows receive an average 1.5 tonnes of feed per lactation in the bail, but Luke said pasture was the cheapest source of feed. With this in mind, special attention is paid to the pasture sowing date. He sows Italian and annual pastures on March 15 and perennials on April 1. “If you don’t go early enough there’s 1-1.5 tonnes/ha of pasture utilisation you are missing out on,” Luke said.
GRAZE ANATOMY
THE herd is strip-grazed, with urea applied every five weeks. Luke said he grazed the herd “fairly hard without being extreme” and took guidance from the milk vat — the herd’s production. The pasture base is supplemented with 10ha of turnips for the summer.
Only a true surplus of pasture is conserved for silage.
Last spring the Maddens cut 150 dry tonnes of silage. The previous year they cut only 100 dry tonnes, but the season enabled them to graze right through summer. This meant they used only 80 tonnes of dry matter.
Luke knows the most valuable feed is what goes “straight down the cow’s throat” and this was reflected in the cost of production. In 2016-17 their cost of production was $3.50/kg of milk solids — thanks to an ability to graze longer.
“You can add 20-30c (a kilogram of milk solids) to that in a poor year,” Luke said.
This season, a wet winter was followed by a spring that cut out abruptly. Although it has not been as bad as 2015 — when silage was fed from the start of November through until May-June the following year — there has been a higher reliance on supplementary feed.
Luke said he believed this has pushed costs up and he expected to have produced milk for $3.50-$3.70/kg of milk solids.
Purchased hay has added to this cost of production. Restrained by land, the couple do not have an out block, which means they cannot make their own hay. Buying hay is their only option and they have developed strong relationships with growers and remain confident in what they purchase.
The herd calves for 11 weeks in autumn. Tightening the calving period has been a work in progress over the past four years as they bought in cows and heifers to form a herd.
The heifers start calving a week before the cows on March 25, with 58 heifers entering the herd this year. Young stock are sent out on agistment.
Luke said one of the keys to their low production costs had been a lack of labour.
“Down the track if we milk a few more numbers we can put a full time (employee) on,” he said.
TIGHT REIN
COST reduction remains in the back of Luke’s mind all the time. He said figures and financials had always been something he had enjoyed, but these skills were honed through involvement in local discussion groups and through the use of industry benchmarking tool Dairy Base.
“I’ve always been like that (focus on figures). I love my figures and keep an eye on what is going on,” he said.
“Benchmarking has been a big thing and learning from the good farmers, what they are doing.”
The Maddens, who supply Warrnambool Cheese and Butter, remain positive about the future of the industry and hope the milk price can improve as processors compete for the raw product to fill factories.
Looking to lift numbers to 300 and secure a little more leased land to bolster their homegrown feed stocks, Luke and Stacey have no ambition to milk 700 cows.
“(Consultant) John Mulvany said we are right in the middle of our sweet spot now,” Luke said.
“Into the future we would like to slow down a little, but we couldn’t do that now, it would impact profitability.
“If we did it now, we wouldn’t go ahead.”
Luke will join a panel of other young farmers at the Australian Dairy Conference in Melbourne next week.
For more information visit australiandairyconference. com.au
Marmon Hill tops the chops
Few know the secret to successfully breeding prized first-cross ewes better than South Australia’s Ian Farley. And here he shares what he knows and how he got there.
Fruits of family labour pay off
The bank was set to foreclose when Helen Aggeletos took over her family’s citrus business in South Australia’s Riverland. Read how she turned it all around.