Henden Manor Estates Review of Henden Manor Estates Dairy Farm 11 th - - PowerPoint PPT Presentation

Review of Henden Manor Estates Dairy Farm

11th June, 2018

1

Henden Manor Estates

Overview

• Henden is ~500 acres (~370 acres arable & grazing), the land being undulating clay
• The strategy is to produce high quality milk over the long term
• The key tenets of Henden’s operations are:

– High standards of staff welfare and safety – High standards of animal welfare – High standards in looking after the environment – Being financially sustainable (an aim at the moment, not a reality) – Being transparent in all that we do – Keeping meticulous records

• Overview of operations:

– M&S is the buyer of our contracted milk, collected and processed by the Muller Group – Henden operates a “closed herd” policy. We do not buy in livestock nor graze them off our land – The dairy farm employs six people (2 women) plus two part time administrative people (2 women) – We aim to calve through the year to achieve as level production as is possible – Milking is carried out three times a day, achieved through a “herringbone” parlour system – Our milking cows are bedded on sand while our intermediates and maiden heifers lie on straw – The barns have 294 cubicles plus a barn for housing 65 transition cows and maiden heifers – The older barns house the calves, heifers and the “hospital” – Every year we take in 15-17 vet interns to help them understand dairy farming

• The key mantra of our business is:

“attention to detail”

2

3

Drainage direction

Key:

Approx estate boundary Approx main water courses Approx other courses Underground courses

Note:

Henden also owns 18 acres

• f arable land over two

fields a quarter of a mile to the east of its boundary

Philcox Corner Everest Corner Bramleys Lower Bottom Coopers Corner Perry Meadow Highlands Lodge Bottom Pound Daylees Trowlers London Meadow Tanhouse Grove Little Orchard Cox’s Reservoir Quinten’s 16 Acres Crouch’s Search Light Rough Banks Guzzle Mount Burgess Mount North Pound Daylees Hanging Croft Tank Tar Guzzle

Fields

Farm

The Dairy Farm

4

Offices Straw & Sand storage Liquid waste (slurry)

>5mm litres capacity

Bulk Feed clamps

(grass & maize silage and wholecrop)

Dry food store Cow barns Settlement ponds Solid waste Parlour & milk tank

19,000 litres capacity

Heifers & calves area

N

Hospital Dirty water tank Separator

76 cubicles 76 68 cubicles 74 cubicles

Reservoir

30 cows 35 livestock

Operating statistics

• Henden is some 85% larger than the average UK dairy farm, but is not a “super farm”
• It performs well against the average
• Our budget numbers for the 2018/19 year are as follows:

– Cows in herd 264 143 average in the UK – Cows in milk 236

• Mastitis/Fresh cows

1.5% – Youngstock on the farm 197 – Calving Index 378 days 420 days

• Annual Sales

3.15 mm litres (2.46 mm litres sold to M&S, 694 k (22%) to Muller)

– Daily sales 8,570 litres – Yield per cow in milk 36.5 litres per day (could average closer to 38 lpd – extra 130,000 litres) – Yield per cow in herd 11,670 litres per year 7,557 litres per year – Milking time per day 9 hrs 30 mins (3 hrs 40 mins am, 2 hrs 50 mins pm and 3 hrs late pm) – Average Butterfat 4.01% (average over 12 months) 4.08% – Average Protein 3.40% 3.29% – Bactoscan count (BAC) 10 27.3 – Somatic Cell Count (SCC) 100 163.2 – Lameness (score 0 & 1) 90.8% 70% * – Lameness (score 3) 0.6% ~6% *

5

Note: Sources for average in the UK are all AHDB except those marked with a * which is sourced to Collins 2015 PhD thesis

Financial performance

• Since 2010 we have invested:
• £3.8 mm in capital; plus
• Over £1.5 mm to cover operating losses (Partners haven’t taken any money out of farm over 21 years)
• For the current 2018/19 year we have budgeted the following from the dairy farm:

Income: Milk sales £960k 30.50 ppl (extra 130,000 litres could generate £40k) Livestock sales (cows and calves) £57k 1.82 Other income no; 0.00 Total Income £1,019k 32.31 Costs: Labour £214k 6.78 ppl 22% of total costs Feed £470k 14.90 48% Bedding £45k 1.43 5% Vet, AI & Foot trimming £62k 1.96 6% Other Dairy, including Chemicals £38k 1.19 4% Machinery £71k 2.27 7% Property £28k 0.88 3% Utilities £38k 1.21 4% Administration, including accountants £17k 0.54 2% Total Costs £983k 31.17 100% Profit pre Depreciation £36k 1.15 ppl Depreciation (for Dairy farm) £133k 4.21 UK average per Kite is 1.94ppl (Mar ‘18) Loss after Depreciation £97k 3.08 Needed to recover past investment Return on Capital Should be £118k or 3.76ppl (5% of £2.37mm of farm, not land investment)

Needed to help finance new investment & provide a return to Partners

6

The “Learning Curves”

• At Henden we have learned a good deal, but continue to learn

7 1997/06 2008 2009/10 2015/6 2017

• 1. Farm needs

scale

• 2. High staff

turnover

• 1. Livestock welfare

needs to be checked constantly

• 2. Held too many

livestock given facilities

• 3. Buying in stock

carries significant risks

• 1. Need a

manager, who is focused

• 2. New facilities

required as existing ones are no longer fit for purpose

• 1. High staff turnover
• 2. Milking too few cows
• 3. Lost a number for a

range of illnesses

• 4. Too far from abattoir

Grazing introduces new risks to the herd We lost 17 calves through abortions commencing

• September. All

appropriate authorities and vets were informed. Cause is said to have been neospora from dogs, most likely on grazing land. Over one year we lost 28 cows on the farm due to 20 medical reasons. We also sold too

• many. (Performance

before and since was/ has been good.)

2018 Three times milking starts Required new member

• f staff,

more food and utilities, but has resulted in higher yields. Improved cow comfort.

Partner mostly away working on his core business

Many challenges face us day to day

• most lie outside our control
• Keeping a good, motivated team, which pays attention to detail at all times
• Ensuring that staff always operate safely
• Ensuring that our livestock is always healthy (bio-security is vitally important)
• Ensuring that we keep our pregnancy rates high
• Ensuring that the bulk feed is always harvested at the best time and stored well
• Handling the solid and wet waste well without risk to the farm and environment
• The weather
• The milk price
• Feed costs
• Utility costs
• Exchange rate
• Education of the public/consumer as to what it takes/costs to produce high quality food
• Growing activism against the livestock industry, minorities aiming for the PR centre ground
• Over the medium to long term, possibly access to Processor facilities
• Longer term more capital investment will be required; currently the economics aren’t there

8

We tick the boxes for the FSA (overview)

1. Milk must come from animals that are always in good health 2. Milk from animals showing signs of udder disease must not be used 3. Milk from animals undergoing medical treatment must not be used 4. Good veterinary records must be kept and all products kept safe and secure 5. All animals should be kept clean 6. There should be at least one cubicle per cow, designed to encourage cow to lie in them 7. All lying areas should be of good size and kept clean and dry 8. Passageways etc should be free of accumulations of dung, slurry and mud 9. Fields, tracks, gateways should be well maintained and kept free from slurry etc 10. Milk from each animal must be examined for abnormalities and, if found, rejected 11. Teats, udders and adjacent parts must be kept clean before milking 12. Hands, contact surfaces and milking equipment must be kept clean at all times 13. Parlours ideally should be properly sealed off from other buildings 14. Floors should be impervious to water and free draining 15. Doors and walls should be smooth, impervious and easy to clean 16. Isolation facilities should have separate drainage and airspace 17. Milk must be protected from contamination during transfer and storage 18. Milk must be cooled immediately to minimise bacteria multiplication 19. Bulk tanks must be cleaned after each milk collection and kept in good condition 20. Sufficient potable (or clean) water must be available in the milking area for all cleaning 21. Suitable facilities should be available for the staff to wash their hands and arms 22. Sufficient ventilation is required to provide clean air and avoid condensation (and humidity) 23. Adequate measures must be taken to control insects, rodents and birds to prevent contamination 24. Personnel who are ill must not carry out milking or handle milk

9

Henden does its best at Health & Safety

• Farming has the worst performance for H&S in UK industry. In 2016/17:

– 27 people died in farming, which is the equivalent of 7.73 per 100,000 employees – 30 people died in construction, which is the equivalent of 1.94 per 100,000 employees – 92 members of the public were killed as a result of work related activities

• The main type of accidents were:

– Contact with electricity 8 – Contact with moving machinery 8 – Trapped or something collapsing/overturning 10 – Struck by a moving object 20 – Falls from a height 25 – Struck by a moving vehicle 31

• Henden, thankfully, has had few accidents to date (Jan 2016 to date):

– Major personal accident

• (not one since we started 21 years ago)

– Minor personal accident 1 cow kicked relief milker in the arm (7/17) – Milk contamination

• –

Pollution – potentially significant event

• –

Pollution – minor event

• –

Building damage 1 gate damaged (4/17) – Machine/equipment damage 3 damage to scraper tractor (4/17), Gaytor (6/17), JCB tyres (6/17)

Source for first two bullet points: Strutt & Parker report dated 2nd October, 2017, including sources from HSE

10

Caring for the environment is important

• We can produce some 4-6 mm litres of waste between October and March
• Our cows are bedded on sand, some of which can settle in the lagoon
• Our land is clay, so liquid absorption is poor to often non-existent in the Winter (high water table)
• We are not currently in a Nitrate Vulnerable Zone (NVZ)
• In 2009/10, we improved our waste handling infrastructure, investing £400-500,000

– Expanded the slurry lagoon by some 35-40% to have a nominal capacity of over 5mm litres – Installed a waste separator – Installed proper drainage to separate clean water from dirty water – Caught the rain falling on barn roofs to flow into the new reservoir – Acquired a sophisticated tanker to spread liquid slurry over the ground

• We spread liquid waste onto and plough solid waste into our ground when we can:

– Take solid waste onto the ground for storage and then for ploughing in at the appropriate time – Spread the liquid waste both through the use of the tanker (16,000 litres per load) and a pulsator

• In 2014, we discovered:

– Sand was taking up ~30% of the nominal volume of the slurry lagoon in spite of the two settling tanks – Key rainfall catchment area computations made by professional advisers were way too small – The rain water falling on the wild flower area above the barns was being drained into the slurry lagoon

• In 2015, we solved these problems by investing some £70,000 so we can work as if we are in an NVZ

– Even now, however, we need to dredge out the lagoon every two to three years at a cost of some £5-10,000 – Above average rainfall can still create problems (more water going into lagoon and inability to spread slurry on the land)

11

Henden is a closely monitored farm

• Henden is closely monitored by the Regulatory Authorities and M&S
• M&S imposes rules and regulations on its farms, which are in excess of the norm
• Our milk is tested at every pick up for Butterfat, Protein, SCC, BAC, Urea and Water

Audit type Regularity Notice Last visit Result * – M&S Health & Welfare annual 48 hours 25th Oct 2017 Gold – M&S Farm Standards annual 48 hours 3rd Oct 2017 Gold – RSPCA annual + spot

• ne week/none

8th May 2017 Good – Red Tractor 18 months + spot none 15th Feb 2017 Good – FSA Dairy Inspection every ten years none 23rd Aug 2017 Good

. 12

* All results were the best that could be achieved

Henden Manor Estates LLP

Address: Henden Manor Estates Ide Hill Sevenoaks Kent TN14 6LA Telephone: +44 (0) 1732 750 758 Partners: Martin Lovegrove Roni Lovegrove Dairy Manager: Diana Guitane Contact: info@hendenmanor.com Website: www.hendenmanor.com

13