Max Sealy (FCG WhiteAvon)

In current agriculture, we have a lot of buzzwords which are useful in defining future direction and often set out trends that are occurring in agriculture. Words such as sustainability, inclusivity, risk-management and a big one to consider now is resilience. As consultants one of our jobs is to help businesses plan and to bring about change that is both positive and constructive. We know that in agriculture we must match output to keep pace with inflating costs, and we know that our output prices don’t always rise in relation to our overhead costs. Therefore, we are often caught on the back foot as we often can’t pass on these costs on to our customers.

In the livestock and dairy sector, things have changed quite a bit in the last year or so with an increase in prices and in some cases a reduction in variable costs. This of course is not the pattern right across the country and the current drought is a good example where some farms have sufficient forage and others will be faced with buying in large amounts of forage or supplementary feeds to secure production for the coming winter and into next spring. This manifests itself in many different ways with a lot of all year-round calving herds for example having already consumed a good amount of their 2025 first cuts whereas autumn calving herds may have used up stock designed for feeding in the autumn by feeding the stale cows in the spring.

The milk price to concentrate price ratio is very positive now, encouraging additional production. This is very much related to the concentrate price, but if one is short of forage, then that puts a whole different perspective of assessing the profitability of continuing to produce additional milk or meat from expensive feed.

The first step is using accurate data to identify animals that are less productive and profitable, as culling these can reduce feed consumption without reducing profits, (in some cases even increasing profits). In a longer-term scale, we are encouraging our clients to think about resilience in a real sense and one example of this is increasing the amount of feed held within a business so that more variable climatic conditions can be dealt with. This might involve growing extra grass silage or extra maize or taking on additional land for such things as far off dry cow grazing. Opportunities can arise for this utilising arable land either as catch crops or summer cropping and renting additional land or purchasing additional forage. This ensures that you are always carrying enough buffer for a calculated period of time, for example the 2–3-month drought period we have experienced at this time.

Of course, this resilience doesn’t come without its costs. One would need additional working capital, for example tying up another 1000 tonnes of maize silage would tie up another £40,000-£50,000 of working capital and one needs to think about high quality storage in this as well. Constructing a new silage clamp would cost between £50-£100 per tonne depending on how this is done so a fixed cost requirement of £50k-£100k of capital plus the cost of making the silage could easily be involved in improving the resilience of one’s business. None the less, calculating the benefit in terms of additional milk production, cow condition and ability to survive drought needs to be factored against these costs which of course will vary depending on individuals’ circumstances, yields, milk price etc.

Good silage in the clamp is worth more than money in the bank!

For a more detailed investigation into how cost effectively you can make your business more resilient to shocks or volatility please contact Max at maxsealy@fcgagric.com or your local FCG office.