Profiting from Organic Dairying
Organic dairying has become not only respectable but profitable. Fonterra has identified a valuable niche in the market and wants about 200 farms to convert by 2009, and is offering financial incentives. Typically, organic farmers find that although production drops a little under organic regimes, that is compensated for by a tenfold reduction in animal health costs.
Conversion from conventional dairying takes three years, and the biggest difficulty lies in changing the mindset.
It wasnt so very long ago that organic products were viewed by the general public as being at the bottom end of the market. Limp carrots and spotty apples were mainly the preserve alternative lifestylers and a few others with weird ideas about food.
Today, attitudes to organics are changing. Food safety has become a major issue world-wide, resulting in a greatly reduced tolerance for residues. The build-up of heavy metals, hormones and agricultural chemicals in the environment and their possible links with ill health have rattled consumers, and increasing numbers are coming to the conclusion that there is no safe level of contamination in food.
Throughout the developed world there is a growing demand for foods that have been produced without antibiotics, pesticides or chemical fertilisers. Rightly or wrongly, perception is leading production.
That is certainly true for organic milk. Fonterra has identified a valuable niche for organic products but currently has only about thirty certified suppliers. Earlier this year it announced increased support for farmers to convert 7% premium while undergoing the three-year conversion process and 20% for three further years once fully USDA compliant. Its aim is to increase the number of certified suppliers to about 200 by 2009.
Despite the incentives offered, that may not be easy. The difficulties and disciplines involved in organics mean that it is not for everyone. So what sorts of people have they attracted so far? Are they the modern equivalent of 60s hippies, or Greenies wanting to save the planet?
In fact, there is a mixture of people in the programme sharemilkers, farm managers, and some bigger operators showing interest too and most see it as a way to diversify and address environmental concerns. There are many barriers to going organic, not the least of which is the expectation that production will drop, according to Bill Quinn, who runs private discussion groups for organic dairy farmers.
People still talk about loss in production, yet we have organic dairy farmers who are in the top 5% of their district in terms of production and also in the top 3% for lowest costs, says Quinn.
Although there may be some initial fall in productions there is no reason why organic dairying should be less profitable. One of my clients was originally doing 1100 kgMS with heavy urea use, and in his first year in organics with no urea he achieved 1000kgMS and reduced is animal health bill by about 40%. He is laughing all way to the bank, says Quinn.
An enthusiast for organic agriculture in general, Quinn is quick to point out that success in organics depends on the attitude of the farmers involved and their diligence in managing the new system.
Those that have attended courses and upskilled themselves are maintaining production and reducing costs, but those that dont are courting disaster, he says.
One farmer doing it right is Gavin Fisher, an Elstow sharemilker with a small but profitable herd. He began introducing organic practices about 10 years ago and started the certification process in 1999. In 2004 he asked the dairying research organisation Dexcel to run his farm statistics through their ProfitWatch program and compare his performance with others in the area. The results delighted him.
Our Economic Farm Surplus was just under double the average per hectare for the Waikato, which actually shocked a few people. We had a lower-than-average stocking rate, but our EFS per cow was up in the top 3% in New Zealand, says Fisher.
Included in that was the 10% premium we were getting paid at the time, and that has now increased to 20% but my costs have stayed low.
Lower costs, particularly for animal health, are a major plus for organic farm businesses. With their emphasis on prevention and the use of homeopathic and other non-invasive remedies, even for infections such as mastitis, tenfold reductions in spending on animal ill health are not uncommon. In the 2003/4 season the typical industry figure was around $56 per cow, says Fisher, whereas his animal health outlay was under $5.
Interest in this aspect of organic practice extends well out into the mainstream of dairying, according to Bill Quinn.
There are many orthodox farmers looking over the fence and adopting sustainable ideas and concepts. Ten years ago homeopathy would have been frowned upon by 99% of the dairy farming community. Now about 30% of dairy farms use homeopathy to some extent, he says.
The same is true for other practices, like use of cider vinegar, seaweed drenches, and organic fertilisers. Conventional farmers form over 90% of the customer base for businesses that supply the organic dairy sector.
Enthusiasm and camaraderie run high among new recruits to the industry, as might be expected. Quinn says his discussion groups are very well attended and always run over time as farmers share knowledge and experiences. But the most telling aspect is the feedback he gets unsolicited from their wives.
Partners have commented that going organic has renewed their husbands love of farming. It is not just that they are making money, they are enjoying farming again, he says.
This is a major issue for the dairy industry as a whole. Milking cows can become a burden, but organic dairying empowers farmers to make on-farm decisions once again, getting them back in touch with their soil. It may sound all warm and fuzzy, but that is the basis of sustainable farming.
Warm fuzzies aside, the viability of organic dairying in the medium term depends in some measure on the incentives offered by Fonterra which, says Quinn, amount to about $90 per cow in the conversion years and about $270 per cow in the following three years. Given the growth in the demand for organic dairy foods world-wide there is no reason why the scheme should not continue.
Life without antibiotics
For many farmers the idea of not being able to use antibiotics is scary. Mastitis and lameness are two very big issues for most farms, so what is the organic experience? Typically, cell counts are on the high side at the beginning and end of the season but mastitis is seldom an issue. Some farmers use homeopathic treatments and tonics, such as cider vinegar, while others give the herd a boost with trace elements such as zinc, cobalt and selenium. Lameness is similarly treated, but seems to be less of a problem than with conventional herds.
Empty rates One organic farmer reported empties dropping from 12% to 5% in his first year of conversion, and while rates do vary from year to year they tend to be lower than in conventional herds.
How come? Organic farmers believe it is largely the result of a much better nutritional balance.
Gavin & Sheryn Fisher have achieved a sustained improvement in animal health through promoting the right biological activity in soils and pastures.
We see that the medicine cabinet is pretty much out in the paddock. As well as ryegrass and clover we have plantain, chicory, coxfoot, prairie grass and other species coming up, like from a pasture you might have seen 40 years ago, says Fisher.
Changes in the season and conditions will determine what is growing, so there are different species available from month-to-month. This means more diversity and better nutrition for the cattle.
Fisher uses a grazing rotation long enough to allow some species to flower, and thus offer stock nutrients that are not available in other parts of the plant. Plant nutrition is also very important, and while soil and plants tests can be helpful he has learned to rely more on his own observations and experience.
For me, observation is a very good tool because I can see how certain paddocks grow well and try to mimic that through the rest of the farm, says Fisher.
We just focus on nutrient recycling from biology, and apply very little in the way of nutrients other than a bit of seaweed, some soft lime and compost teas. Everything that comes into this property is looked at simply as either biology or food for biology.
Stuart Morley had been sharemilking for 20 years, two of them under an organic regime, before he and his wife Joanne bought their 78 ha property near Te Aroha, on which they run a herd of 230, plus 40 yearlings and 40 calves. They started converting to organic dairying in 2002 and so will complete the three-year process at the end of this season.
The previous owner had produced 72-79,000 kgMS on the property with liberal use of urea, some bought-in feed and yearlings grazed off. In their first year Stu and Jo managed 67000 and last year 70,000 and this was with no urea and all young stock grazed on the property. They aim to do 72,000 this season.
The farm is run on a grass-only system. No silage or hay is made or brought in, apart from a small amount for the yearlings over winter as added food/roughage. Once the pastures improve this should not be necessary, says Stu.
While their fertiliser costs are about the same as other farms in the area the big gain has been in lower animal health costs bank figures show their costs are $1 per kgMS below the national average. They are also getting a 7% premium from Fonterra at present and will get 20% next season, and they have joined Dexcels ProfitWatch programme to compare their performance with other farms.
Changing the pasture from predominantly perennial ryegrass to ryegrass-and-clover plus seasonal mix of other species. No grass seed has been put on, he has just tried to change the environment to encourage the species that are there already plantains, dandelion, annual ryegrasses, paspalum and lotus in summer, red clover and plenty of white clover. Initially there was a lot of clover root weevil damage as the white clover first came away, but it seems to be subsiding now.
Bloat has been a continuing problem from about 20th August onwards. Although fish oils and paraffin oil drenches work he is not keen to drench the whole herd. Fortunately he has found that shredded willow seems to be effective form of roughage. The young stock eat the leaves and the older cows will eat white timber that has been shredded through a chipper. Tannins in the willow are thought to be the active ingredient. Break-feeding the herd (3 breaks during the day, 2 at night) and holding stock at the shed until all have finished milking also seem to help.
Fertiliser: Like Gavin, Stus aim is to foster the growth of soil microbes and beneficial insects. He uses phosphate, lime and trace element mixes in the form of composts. In the run up to calving and at drying off he also uses chelated fish minerals.
(Some organic farmers use compost teas to grow specific microbes in liquid that can be sprayed on pastures.)
Motivation: Profit he believes he can grow more grass sustainably by going organic. His aim is to go beyond the usual production of 15-18000kgDM, but he has a way to go yet.
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Conversion from conventional dairying takes three years, and the biggest difficulty lies in changing the mindset.
It wasnt so very long ago that organic products were viewed by the general public as being at the bottom end of the market. Limp carrots and spotty apples were mainly the preserve alternative lifestylers and a few others with weird ideas about food.
Today, attitudes to organics are changing. Food safety has become a major issue world-wide, resulting in a greatly reduced tolerance for residues. The build-up of heavy metals, hormones and agricultural chemicals in the environment and their possible links with ill health have rattled consumers, and increasing numbers are coming to the conclusion that there is no safe level of contamination in food.
Throughout the developed world there is a growing demand for foods that have been produced without antibiotics, pesticides or chemical fertilisers. Rightly or wrongly, perception is leading production.
That is certainly true for organic milk. Fonterra has identified a valuable niche for organic products but currently has only about thirty certified suppliers. Earlier this year it announced increased support for farmers to convert 7% premium while undergoing the three-year conversion process and 20% for three further years once fully USDA compliant. Its aim is to increase the number of certified suppliers to about 200 by 2009.
Despite the incentives offered, that may not be easy. The difficulties and disciplines involved in organics mean that it is not for everyone. So what sorts of people have they attracted so far? Are they the modern equivalent of 60s hippies, or Greenies wanting to save the planet?
In fact, there is a mixture of people in the programme sharemilkers, farm managers, and some bigger operators showing interest too and most see it as a way to diversify and address environmental concerns. There are many barriers to going organic, not the least of which is the expectation that production will drop, according to Bill Quinn, who runs private discussion groups for organic dairy farmers.
People still talk about loss in production, yet we have organic dairy farmers who are in the top 5% of their district in terms of production and also in the top 3% for lowest costs, says Quinn.
Although there may be some initial fall in productions there is no reason why organic dairying should be less profitable. One of my clients was originally doing 1100 kgMS with heavy urea use, and in his first year in organics with no urea he achieved 1000kgMS and reduced is animal health bill by about 40%. He is laughing all way to the bank, says Quinn.
An enthusiast for organic agriculture in general, Quinn is quick to point out that success in organics depends on the attitude of the farmers involved and their diligence in managing the new system.
Those that have attended courses and upskilled themselves are maintaining production and reducing costs, but those that dont are courting disaster, he says.
One farmer doing it right is Gavin Fisher, an Elstow sharemilker with a small but profitable herd. He began introducing organic practices about 10 years ago and started the certification process in 1999. In 2004 he asked the dairying research organisation Dexcel to run his farm statistics through their ProfitWatch program and compare his performance with others in the area. The results delighted him.
Our Economic Farm Surplus was just under double the average per hectare for the Waikato, which actually shocked a few people. We had a lower-than-average stocking rate, but our EFS per cow was up in the top 3% in New Zealand, says Fisher.
Included in that was the 10% premium we were getting paid at the time, and that has now increased to 20% but my costs have stayed low.
Lower costs, particularly for animal health, are a major plus for organic farm businesses. With their emphasis on prevention and the use of homeopathic and other non-invasive remedies, even for infections such as mastitis, tenfold reductions in spending on animal ill health are not uncommon. In the 2003/4 season the typical industry figure was around $56 per cow, says Fisher, whereas his animal health outlay was under $5.
Interest in this aspect of organic practice extends well out into the mainstream of dairying, according to Bill Quinn.
There are many orthodox farmers looking over the fence and adopting sustainable ideas and concepts. Ten years ago homeopathy would have been frowned upon by 99% of the dairy farming community. Now about 30% of dairy farms use homeopathy to some extent, he says.
The same is true for other practices, like use of cider vinegar, seaweed drenches, and organic fertilisers. Conventional farmers form over 90% of the customer base for businesses that supply the organic dairy sector.
Enthusiasm and camaraderie run high among new recruits to the industry, as might be expected. Quinn says his discussion groups are very well attended and always run over time as farmers share knowledge and experiences. But the most telling aspect is the feedback he gets unsolicited from their wives.
Partners have commented that going organic has renewed their husbands love of farming. It is not just that they are making money, they are enjoying farming again, he says.
This is a major issue for the dairy industry as a whole. Milking cows can become a burden, but organic dairying empowers farmers to make on-farm decisions once again, getting them back in touch with their soil. It may sound all warm and fuzzy, but that is the basis of sustainable farming.
Warm fuzzies aside, the viability of organic dairying in the medium term depends in some measure on the incentives offered by Fonterra which, says Quinn, amount to about $90 per cow in the conversion years and about $270 per cow in the following three years. Given the growth in the demand for organic dairy foods world-wide there is no reason why the scheme should not continue.
Life without antibiotics
For many farmers the idea of not being able to use antibiotics is scary. Mastitis and lameness are two very big issues for most farms, so what is the organic experience? Typically, cell counts are on the high side at the beginning and end of the season but mastitis is seldom an issue. Some farmers use homeopathic treatments and tonics, such as cider vinegar, while others give the herd a boost with trace elements such as zinc, cobalt and selenium. Lameness is similarly treated, but seems to be less of a problem than with conventional herds.
Empty rates One organic farmer reported empties dropping from 12% to 5% in his first year of conversion, and while rates do vary from year to year they tend to be lower than in conventional herds.
How come? Organic farmers believe it is largely the result of a much better nutritional balance.
Gavin & Sheryn Fisher have achieved a sustained improvement in animal health through promoting the right biological activity in soils and pastures.
We see that the medicine cabinet is pretty much out in the paddock. As well as ryegrass and clover we have plantain, chicory, coxfoot, prairie grass and other species coming up, like from a pasture you might have seen 40 years ago, says Fisher.
Changes in the season and conditions will determine what is growing, so there are different species available from month-to-month. This means more diversity and better nutrition for the cattle.
Fisher uses a grazing rotation long enough to allow some species to flower, and thus offer stock nutrients that are not available in other parts of the plant. Plant nutrition is also very important, and while soil and plants tests can be helpful he has learned to rely more on his own observations and experience.
For me, observation is a very good tool because I can see how certain paddocks grow well and try to mimic that through the rest of the farm, says Fisher.
We just focus on nutrient recycling from biology, and apply very little in the way of nutrients other than a bit of seaweed, some soft lime and compost teas. Everything that comes into this property is looked at simply as either biology or food for biology.
Stuart Morley had been sharemilking for 20 years, two of them under an organic regime, before he and his wife Joanne bought their 78 ha property near Te Aroha, on which they run a herd of 230, plus 40 yearlings and 40 calves. They started converting to organic dairying in 2002 and so will complete the three-year process at the end of this season.
The previous owner had produced 72-79,000 kgMS on the property with liberal use of urea, some bought-in feed and yearlings grazed off. In their first year Stu and Jo managed 67000 and last year 70,000 and this was with no urea and all young stock grazed on the property. They aim to do 72,000 this season.
The farm is run on a grass-only system. No silage or hay is made or brought in, apart from a small amount for the yearlings over winter as added food/roughage. Once the pastures improve this should not be necessary, says Stu.
While their fertiliser costs are about the same as other farms in the area the big gain has been in lower animal health costs bank figures show their costs are $1 per kgMS below the national average. They are also getting a 7% premium from Fonterra at present and will get 20% next season, and they have joined Dexcels ProfitWatch programme to compare their performance with other farms.
Changing the pasture from predominantly perennial ryegrass to ryegrass-and-clover plus seasonal mix of other species. No grass seed has been put on, he has just tried to change the environment to encourage the species that are there already plantains, dandelion, annual ryegrasses, paspalum and lotus in summer, red clover and plenty of white clover. Initially there was a lot of clover root weevil damage as the white clover first came away, but it seems to be subsiding now.
Bloat has been a continuing problem from about 20th August onwards. Although fish oils and paraffin oil drenches work he is not keen to drench the whole herd. Fortunately he has found that shredded willow seems to be effective form of roughage. The young stock eat the leaves and the older cows will eat white timber that has been shredded through a chipper. Tannins in the willow are thought to be the active ingredient. Break-feeding the herd (3 breaks during the day, 2 at night) and holding stock at the shed until all have finished milking also seem to help.
Fertiliser: Like Gavin, Stus aim is to foster the growth of soil microbes and beneficial insects. He uses phosphate, lime and trace element mixes in the form of composts. In the run up to calving and at drying off he also uses chelated fish minerals.
(Some organic farmers use compost teas to grow specific microbes in liquid that can be sprayed on pastures.)
Motivation: Profit he believes he can grow more grass sustainably by going organic. His aim is to go beyond the usual production of 15-18000kgDM, but he has a way to go yet.
-