Stephen and Jessica Knight have been dairy farmers on their current property in Stratford, just outside the Macalister Irrigation District (MID), alongside the Avon River in Gippsland Victoria for just over 8.5 years. They moved to this farm taking on the role as farm managers for the then property owners in 2014. Stephen was managing another farm and they purchased and moved to their current farm in May 2015. Those owners decided to retire in 2015 selling the farm to Stephen and Jessica.
When they first took over ownership, they were milking 220 cows on about 70 hectares in 16 aside swing over herringbone shed - adding 2 milking units and increased cow yard size within the first 6 months. Currently they are milking around 530 cows on 120 hectare of milking area and a further 80 acres of dryland that they own plus 50 hectares of leased dry land conveniently located straight across the road.
I caught up with Stephen and Jessica on the second last day of November for the first time and this is what they shared in their first catch up regarding how they deal with risk in a changing climate.
Focus on feed conversion ratio
We run a 50/50 Autumn Spring split calving herd for 5 weeks each time - around the last week of Feb and the last week of July. Since we became owner managers, we have been running a 3-way cross; Jersey, Holstein and Scandinavian Red. We seem to be moving away from the Reds as their temperaments are not great once they are in the dairy.
We use AI totally, with the genetic goal inked to whatever we feed them, we want it to be converted into as much milk as possible. Therefore, we breed for smaller, compact, animals that are efficient in converting feed into milk (i.e. fertile animals that need less feed to produce more milk).
A quick ownership transition
We were also managing another farm in the MID when we first started sharing farming on this 1 and we were rearing calves for ourselves to build our own milking herd. We left that farm we were managing when we purchased our current farm. We’d mentioned to the owners who were getting towards retirement, that we were interested in buying the farm when they were ready to sell, thinking that might happen in the next few years.
However, about 3 months after we started, they came to us and indicated they were ready to sell. So, it was a very quick transition from managing the day to day aspects of the farm to actually owning a farm, at least a couple of years earlier than we’d planned.
Prolonged drought a major turning point
After we bought this dairy farm in 2015 we faced 2 major challenges during the initial 4 years of ownership. The first was the milk price crash. Then 12 months after taking on ownership, was the start of what turned out to be a 3-year long drought event which for us lasted from 2016 through to 2019.
That prolonged drought period was a significant turning point for us, as we were highly geared then due to having a large debt, lower milk price and poor infrastructure. Additionally, we were in our old herringbone shed and our milking area was much smaller then, so we were very limited in how many cows we could milk.
Likewise, as we are located just outside the Lake Glenmaggie MID system, with limited irrigation water supply, solely supplied from the Avon River, our financial situation was further exacerbated. By that third drought year we dried off 80% of the milking area until the following March as we had very limited access to the river for irrigation - we barely had enough to run the centre pivot to water summer crops, so their yield was greatly reduced also.
The need for daily cash and feed budgets
As a direct consequence of our highly geared financial situation over that first 4 years of ownership, our farming skill set not only broadened but had to evolve at a rapid rate, in order for us to get through that tough time. Doing cash and feed budgets were high on the skills development list as they were essential, especially over that prolonged drought period.
Making the correct decision
As the drought period continued, we improved our budgeting skills at an exponential rate as it got to the point of having to do cash and feed budgets daily. Predicting and determining trigger points went hand in hand with daily financial budgeting. As 1 key example, we compared scenarios of how much it was costing to feed those cows each day to work out the trigger point of a predetermined date of when to start early drying off or to stop milking all together, which was when the budgeting figures for that day indicated it cost us more for feed than the profit made from the milk produced.
Improving water security
Doing regular budgets is an automatic, consistent practice for us now as during that drought time, it reinforced that our biggest risk on the farm was water. Just having 1 water source from the Avon River was extremely risky as it was so unreliable in times of drought.
Consequently, in the fourth year of ownership looked at 3 different possible options; first, were we better to lease different country during predicted drier years, secondly, should we sell this farm and buy a different 1, or thirdly should we invest in infrastructure to upgrade this farm. So that year (2019) was when we offset against risk for times when irrigation water supply from the Avon River is restricted or unavailable by investing in the construction of 2 turkey nest dams with 250 megalitre holding capacity each.
As the dams would instantly give better water security, which increased the land value, we had much greater borrowing power and the bank was willing to back. Consequently, we increased cow numbers, improving the earning capacity of the farm to pay off our debt, reducing the highly geared financial risk situation that we were in at the time.
Best practice irrigation focus
I think on that topic best practice irrigation across the whole farm over the next 5 up to 10 years, is everything that's weak, has been redone or is scheduled to be upgraded. So it's best practice automated maximum water efficiencies that we focus on.
Currently our irrigation systems consist mostly of high flow flood with automation and pivots. There are some old laterals that are slowly being pulled out and those irrigated areas will be converting to pivot irrigation systems – in fact, we’ve got new pivots on the way!
In normal seasonal conditions, the river supply is adequate as we've probably got about 6 to 7 megalitres to the hectare, but there is scope to keep developing dry country which will dilute that allocation and then we may have to look at temporary or more permanent scenario for more irrigation water. We installed 1 Turkey Nest dam installed during the prolonged drought purely as a drought reserve, so we try not to use that 1.
Improving our water security
There are no plans of purchasing the leased block across the road for further capital irrigation works. It is a long distance from any water source, pump sites, pipelines, etc and would require considerable capital to develop, not just dam construction but also running pipes, power and pumps to the site. We would be far more likely to look at purchasing another farm in the MID, this would give us water shares in high reliability water from another source which would help us to spread risk with access to water from a totally different source
Fodder purchasing considerations
We aim for around 70% home grown, but again that can vary. During the prolonged drought, we got down to 50% home grown. In those drier seasons, we tend to go for summer crops that grow on less water, so we can get as much good quality dry matter as can from as little water as possible.
In our dry summers, we source good quality tested hay and silage from south Gippsland when their summers are usually cooler and wetter and a bit from Northern Vic where we can use carry over water for boosting summer pasture growth. This is because, we don’t typically farm like an MID farm as our irrigation water allocation does not come from the Glenmaggie Weir, like theirs does.
But we'll look at everything like milk to grain price ratio at various times of the year. This season it is paid to feed a little more heavily in the bail through spring than some years. So straight away that reduces demand on home grown, while we still see a return in the vat and then we'll work backwards - like we aim for a tonne of cow at home grown feed conserved into silage.
If we're short, we'll start chasing deficits. If there's opportunity, we'll buy in like we bought some vetch this year. We thought it was pretty good buying for good quality. So we'll look at all the dynamics and not just locally, state and even nationwide of what trends are with feeds. If there's opportunity, we just try and be in a position to jump on them.
A successful early start to irrigation
This current milking season we started irrigation in July because our allocated irrigation water comes from the Avon River and we can start irrigating a month earlier than those farms with MID allocation. To that end we’ve already got 2 cuts of very good quality silage off because of that kick start whilst we had ideal pasture growing conditions at the start of this last July, due to the warmer drier winter we experienced.
Summer Pasture growth considerations
We’ve been here 9 years now, and I don't see a massive benefit in busting our gut through January and February our hottest months. If our water use is getting up at Christmas, we're more than prepared to let a fair chunk of the farm go unirrigated, especially when we start drying off in January anyway and then we'll water up again in March. We just look at signs and options around various trigger point to provide us with a variety of pasture management options.
Between now and Christmas our focus is where we are at overall with current irrigation water use, regarding any feed deficits we're seeing when the autumn calving cows are due to go out and just try and match what we can grow to, what is going to fit with the cows. And that's part of the reason that we've stuck with the split calving because it suits our farm that is not part of the MID; allowing us to dry those cows off over summer and not have to push for that growth of grass in summer where you know it's not worth putting the water on. It gives us some more options.
Tighter and greater split calving ratio
When we started on this farm 9 years ago our spring -autumn calving split was about 70:30, and we've moved it to 50:50 and a lot tighter. We were calving for at least 3 months of the year in the beginning and cut back to 10 weeks overall (5 weeks for both the autumn and spring calving groups essentially). As mentioned earlier, we don’t turn any bulls on the farm for mating – we aim for a 70% in calf from 5 weeks of AI minimum with each group.
Keeping up with climate information
Stephen said, I try to take in the big picture and visit a number of websites on a regular basis and compare and match climatic forecasts and predictions relevant for our farm. I don't buy into too many of the myriad of apps. Rather, I look at the raw data from the climate models and then make my own interpretation from the 5 to 7 different ones that I usually look at.
I know when each of the models update - some are twice a day and some are 4 times daily. I’ll check at every, 6 or 12 hours interval, depending on which models, just to see what changes in movement there are in the various climate drivers that match or not!
You can normally form a pretty good basis on what your immediate climate risks are that are relevant to your farming location if you make an assessment from a few different sources and seek out the common trends of what the various climate drivers have been or a likely to behave like. Keeping a regular eye on the various models certainly gives use a more accurate assessment on the likely temperature and rainfall trends for our best chance in mitigating their potential effects on our farm.
Summer feeding strategy
We are still sitting at around a 25 day grazing rotation. Both pasture quality and milk production is pretty good. We made a prediction based on what I was seeing in long range weather forecasts in the various climate models that it could be a potentially tricky spring and an early summer so this this year we've gone back to our traditional cropping program that 10% of the farm goes in the chicory summer crop (equates to about 11 hectares). Last year we had a bumper spring, so we didn’t need to plant any summer crops.
Chicory will be grazed
Currently at the start of summer we are seeing rye grass patches that are dropping off in quality. The decision to plant a chicory crop as summer feed this milking was therefore a good call. The feeding out of chicory will be a constant in the milking cows diet right through till probably mid-March. The crop will be offered for grazing for up to 4 hours as a maximum most likely after morning milking. The number of days each week we end up grazing it, will depend on how much growing pasture and stored silage is available and of course the chicory crop yield post grazing.
Our feed reserve strategy
We currently have around 750 tonnes of stored hay and silage on farm, we aim to have around 1000 tonnes of feed on hand by the end of hay season. This theoretically should give us 18 months to 2 years of feed reserves (we like to have 2 years of feed on hand).
Our Summer Strategy
Being a split calving herd is our main strategy to cope with all types of summers. If things turn dry we can dry paddocks off early to conserve water, to water up again in the autumn, and also dry off autumn calving cows early if needed. If things remain green and summer rain/showers persist we tend to milk the autumn cows as long as possible.
With support blocks surrounding the miking platform area if pasture quality declines and gets away and becomes rain we have the flexibility to bring in mobs of young stock to eat out/ reset pastures on the milking area.
Being prepared for a difficult autumn
Late breaks are difficult, as autumn is so pivotal for the next season. Since the dam has been in, we have been lucky in that we have had early breaks, but the plan is very set in that by February 20 we will have started oversowing anything that needs to be done and watering up if there is no rain forecast, by mid-March all irrigated paddocks would be watered up and we work on having a least 3 waterings to do this!
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