The session aimed to explore issues associated with economic viability as related to herd size and the pros and cons of direct marketing and/or on farm processing (e.g. raw milk, dairy products) as well as impact on costs of production.
The aim for micro-dairies is to establish a closer relationship with the customers providing them with quality dairy products while maintaining animal welfare to the highest possible standards. This is in the context of public reactions to welfare issues involved in intensive dairy production.
Josh Healy from North Aston Dairy in Oxfordshire spoke about managing his 17-cow farm business. Josh’s father and his partner Matt Dale started the business in 2005 with 3 cows and a total investment of £16.000 for housing, parlour and processing room. Milk is pasteurised on-site and deliveries are made twice a week to 250 customers within a 2-mile radius. The farm also produces and delivers semi- and full fat cream and yoghurt. The cost of production is higher compared to large-scale farms but the quality of their products is superior to that of the retailers. Replacement cows are reared on farm and as part of the business of milk production free-range calves are reared between 6 to 9 months for rose veal. Meat is offered to customers in the available quantities. Delivering costs for the business are high but can be compensated as an organic farm uses their service for vegetable boxes delivery.
In his presentation, Tom Tolputt spoke about the benefits and the challenges of the robotic milking systems (RMS) in small-scale organic dairy production. Mr Tolputt emphasised that this systems can be highly beneficial for the organic dairy producer but, there is a number of criteria that have to be meet in first place to make RMS work for the farmer including good quality forage growing on farm, an existing milk supply route, existing buildings or suitable buildings to convert to dairy housing, supply of electricity and good quality mobile reception (i.e. RMS technology relies heavily on info exchange via mobile phone).
The last speaker, John Newman from Abbey Home Farm, Gloucestershire, presented experiences and challenges of small dairy production and on-farm processing and retailing. According to John the biggest challenge is to balance the supply with customer demand and avoidance of shortages and surpluses implies careful management including weekend processing.
The discussion pointed out that Animal behaviour, health and welfare are important aspects for a micro-dairy business especially in view of the close relationship between consumer and producer.
The discussion that followed the presentations brought out the following points:
- Dairy farmers can bypass the big processors and retailers by producing, processing and packaging fresh milk and other dairy products on-farm and sell directly to local consumers with fair prices.
- Comments about the profitability of a micro-dairy business emphasised the importance of keeping big costs such as labour, forage and concentrate production, dairy costs and repairs under control.
- Animal behaviour, health and welfare are important aspects for a micro-dairy business especially in view of the close relationship between consumer and producer.
- It was appreciated that RMS can cut labour costs and that can be promote the welfare and the productivity of the dairy cows, but their suitability for micro-dairy and small-scale farms was questioned due to the high costs. It remains however a challenging area for the organic dairy sector.
- The greatest challenge for micro-dairies is to continually meet customer demand.
- Animal Cost effective milking of a small herd requires efficient time management.
Individual speaker presentations and abstracts
Josh Healy (North Aston Dairy): Turning a profit from a 17 cow dairy (193kb pdf file)
North Aston Dairy started with nothing but a partner investment of £16000 in 2005 to buy machinery and convert a stable block into animal housing, a parlour, dairy and processing room. With great local support it now has a herd of just 17 Ayrshire cows, no bank debts, an annual turnover of £80000, has one full-time and 1 part-time employee and is generating some £30000 profit for investment and the drawings of one partner. In this session Josh will talk about how the business began with private loans from locals (‘Cow Bonds’) and has grown with demand and within its means. He will give a breakdown of the business’ accounts, looking at costings for milk, cream and yoghurt production, packaging and the various delivery methods that the business uses to direct sell in the local area.
Tom Tolputt (South West Farm Consultants): Robotic organic small-scale dairy production (295kbb pdf file)
I will be looking at the basic cost structure of setting up a new robotically milking dairy unit, the costs involved in the day-to-day running, leasing options and the profitability of dairy production organically. These costs will be based on a farm which would be converting from beef production to dairy production.
John Newman (Abbey Home Farm): Experiences of small dairy production & processing (323kbb pdf file)
Abbey Home Farm has a small dairy enterprise that is part of a large and very diverse farm with beef, sheep, pigs, poultry, cereals, vegetables as well as a farm shop and various educational activities. The dairy currently produces liquid milk, yoghurt, butter and various cheeses. The herd of dairy shorthorns was increased from 18 to 30 cows in June this year with the aim of spreading some of the production costs. John will talk about his experience with running a small dairy with processing and his reasons for increasing cow numbers to help with the logistics of the small- scale processing.