Grazing and Forage Lessons from 2018
At the time of writing, we were in the midst of an extended spell of dry weather, so looking back to the lessons learned from the 2018 drought is a timely and worthwhile exercise. Tom Malleson from the Sherborne office of the Farm Consultancy Group discusses options to help you manage your forage through this period.
Measuring and monitoring grass growth and covers has never been more important. By measuring, you will know if your current grazing area is growing sufficient grass to meet demand. You will also be able to plan grazing and cutting better once rain arrives.
- Retain paddocks previously earmarked for cutting, and strip graze.
- Consider pre-mowing high covers that have been shut up for silage ONLY if increased water demand can be met. Pre-mown grass is drier and will increase the volume of water cows drink.
- Increase supplementation early to ensure grass covers are not driven down too far, i.e. 1650 to 1700 kgDM/ha.Average Farm Cover should not drop below 2000 kgDM/ha.
- Increase the length of the grazing rotation. Grazing on a short round (or worse, set stocking) will result in the plant being grazed before it has time to replenish its energy reserves. Beware of increasing beyond a 30-day round as grass quality will deteriorate.
Following the above points will prepare the farm to “bounce back” once rain arrives. There were huge differences in recovery rates between farms after the 2018 drought broke, with those who managed grass well seeing a much quicker recovery.
If grazing does become short, then consideration should also be given to the following points:
- Assess supplement purchases on quality first, then price comparing feeds on a tonne of dry matter basis, not actual price. Maintaining body condition and fertility is more important than maintaining output, so that when the drought ends cows are in a strong position to make up for some of the extra costs of feeding.
- Take advice on the formulation of rations.Cake formulations may need to change, depending on the analysis of other supplements.Consider feeding forage in the paddock, to avoid the costs of slurry handling, and the risk of injury on dry, slippery yards. Pick a field that you plan to reseed and use it as a sacrifice paddock to feed in if necessary.
- Do not neglect your replacement heifers, these are the future of the herd.Continue to ensure they receive high quality nutrition.If necessary, use leader/follower grazing system so that younger livestock have the best quality grass.
- Cull unproductive cows.Most herds can remove the bottom 10% of their cows and not notice a huge difference in business profitability as the remaining 90% performance increases, with the extra space created.
- If it suits your system dry cows off early, e.g. all year round or autumn calving herds. Be careful with extended dry cow periods that cows do not get over fat, which will cause calving difficulties and impact on the following lactation.
- Ensure your water supply is sufficient to meet the increased demand of hot weather.Cows require at least 60 litres of water per day plus 0.9 litres per litre of milk produced, so for a 30 litre cow she can drink 87 litres of water per day in normal weather conditions.It is essential to ensure sufficient trough space and water pressure to keep up with this demand, 10 cows drinking together can consume 140 litres per minute.
- Calculate and update silage stocks and requirements regularly to ensure you have sufficient for both buffer feeding and the winter period.Responding early to shortfalls can save money if prices rise during a drought season.As a guide the fresh weight density of a 30%DM silage is 615 kg/m3.If you know the size of your clamps you can calculate their capacity.Do not forget to make an allowance for wastage at 5-10%
Don’t act on gut feel and rely on hope to solve a deficit. Measure forage stocks and make decisions based on rational assumptions. Contact Tom at Tel: 07496 760242 or email@example.com for an independent view on your options.
Having experienced a number of different challenges over recent months, many of us are thinking about our families and plans for the future. There has been a lot of reflection regarding succession planning, which can be an emotive subject and one where it is difficult to know where to start.
As a tax advisor, I frequently meet families who are considering succession and would like to start by understanding the tax implications of transferring their assets in lifetime or on death. Although the tax implications can be significant due to the capital value of farming businesses, tax should not be the primary focus.
Succession is far more than a transaction whereby assets are transferred, it is an ongoing process in which knowledge, experience, responsibility, and assets are passed down from one generation to the next. The primary focus should therefore be on achieving an outcome that complements the commercial and familial ambitions.
I think succession conversations often start with tax as it is quantifiable and objective. Having calculated the exposure to tax for the existing scenario, the conversation often opens up to incorporate the more subjective aspects. The power of conversation can be very helpful in understanding how everyone is feeling about succession. Clarifying everyone’s current aspirations and concerns immediately provides an indication of what is viable and highlights areas that will need further discussion and exploration. Although open discussions can be difficult, where these are undertaken it can significantly enhance the succession process, reducing the stress on the family and the overall costs. It can be helpful to have a trusted third party to act as facilitator, often a family member, friend or advisor.
To avoid becoming overwhelmed with the detail of how everything is going work, it is sensible to establish guiding principles that can be used as a framework to assist with decision making. These may include simplicity, independence, and fairness.
Where succession plans are kept simple and all parties understand them, greater confidence develops, and tensions reduce. Complication should only be added if sufficient benefit can be obtained.
Where it is possible to give family members independence from one another it often leads to stronger long-term relationships between siblings and cousins.
Fairness is an interesting aspect of succession planning. A lot of people understand fair to mean equal in terms of asset values. There are, however, many factors that should be considered, including income yield, effort required to generate income, the responsibility that comes with the assets that are to be inherited and the effort already invested in the business, together with asset values. I believe that there is often a difference between leaving an estate fairly and leaving it in equal proportions.
Although each family circumstance is unique and each succession solution bespoke, there are common themes that appear in the challenges that arise.
The most common is a lack of financial independence from the business, meaning that too many generations require regular drawings from the farm bank account. This can put pressure on the business cash flow and reduce the funds available for reinvestment. It can also result in the elder generation being reluctant to allow the next generation significant influence over business decisions in case any mistakes impact drawings.
A crucial and early part of succession planning is to therefore balance investment within the farming business and outside of it. Whether wealth is accumulated in pension funds, investment property, secondary businesses or elsewhere, the future income streams are extremely helpful when it comes to commence the succession process. As well as providing cash flow to fund “retirement” and enable the elder generation to confidently step back from decision making, the capital value of those investments can be helpful in creating independent and fair legacies for different beneficiaries.
Even where the elder generation are financially secure there can still be a reluctance to step back from business decision making. This often comes from a fear of becoming irrelevant, or a perception of having no purpose. A powerful way of overcoming this challenge can be to seek opportunities off farm in other organisations. With a wealth of experience to offer it can be very satisfying to contribute to the governance and oversight of other businesses or organisations, such as the industry’s representative bodies, whose advisory boards specialise in different technical areas. As well as utilising a strong skill set built up over many years, an off-farm role can be a great way of picking up new ideas and ways of thinking that can be brought home to benefit the family business.
As well as identifying ways in which the elder generation can adjust to a shift in influence over the family business, it is important to recognise the level of assistance that the next generation may require. There can be significant pressure felt when trying to take over and live up to the high standards that have been established. It is critical for successors to have a support network in place, made up of friends, peers and advisers.
In an industry that continues to rapidly change, it is important to spend time off farm to recharge and explore new opportunities that present themselves. Discussion groups and farm walks can be a great way of achieving this, as can other more formal options, for instance management and leadership courses such as those run by the Worshipful Company of Farmers.
Having understood how everyone is feeling about succession and having started to settle different people into different roles, the rest of the succession plan often comes together much easier than is anticipated at the outset. At that point, the initial tax commutations can be dusted off and consideration can be given to whether the plan can be optimised in terms of tax efficiency, without departing from the desired outcomes.
In summary, succession planning is more about discussion, understanding the parties involved and identifying the optimum compromise between different objectives than it is about number crunching. The power of conversation throughout the process should not be underestimated and should be embraced because, after all, there is no dress rehearsal, we all have to go straight into the live show.