Dairy focus: ‘We need to park our drive for efficiency and focus on people’

It’s a little over two weeks since PJ O’Keeffe (31) – a dairy farmer from Callan, Co. Kilkenny – was crowned the FBD / Macra na Feirme Young Farmer of the Year.

AgriLand recently visited PJ’s holding to get his thoughts on the industry, an insight into his business and why he sees labour as a crucial issue going forward.

Bringing people into farming

As an industry, PJ explained: “We really need to look at the replacement rate of farmers. We need to stop doing everything else and instead focus on bringing new people into farming.

If we continue to ignore people, we will actually drive the industry to a point where people don’t want to be a part of it.

“We have to get back to a level where people are competing on a working-hour basis with their peers – no matter what industry they are in.

“We have to park our efficiencies; we’re the number one in the world at what we do from a number of perspectives.

“As dairy farmers, we must get better at minding people. The number one thing that makes this industry work is people; cows, land and fertility are all secondary.”

Despite people having such a vital role to play, PJ stressed that the Irish agricultural sector does not have a good public perception when it comes to being the career of choice for young people.

“We really have to get back to the stage where people are saying they’d love to be farmers and we need to get young people filling out agriculture on their CAO applications.

We have to stop sending students out on farms to shovel out calf pens for three months. We have an obligation to send those young people out on farms that actually want to teach, challenge and show them how the business is operated.

“There’s some excellent farmers out there and they’re the people we need to learn from; those are the people who are willing to teach and educate.

“Young people shouldn’t see anything as a barrier to entering farming. There are no barriers anymore and people like Kevin Moran have proved that.

“If you want to work in the outdoors with animals and have a good work/life balance, farming is the option. If you’re enthusiastic and you want to do it, it’s the best industry in the world and there’s no limits.”

Managing the transition from a family farm

Prior to taking full control of the family’s 106ha farm in 2015, PJ had worked alongside his parents for almost a decade.

It was during a stint in New Zealand in 2005/2006 that he developed a goal to grow the family’s farm to 450 cows – moving away from a 72-cow herd and a beef-finishing enterprise of 350 bulls.

He explained: “It was my aim to achieve that goal and I was very fortunate to do it in the manner in which I did. I’m motivated by doing well and delivering what I’ve promised to other people and to myself.”

In terms of cow numbers, he said: “I’m at saturation point and I need good people with me. I’ve been fortunate enough to find them. But, I’ve still an awful lot to learn when it comes to managing people.

We went from being a family farm to a farm that now employs two-to-three people on a full-time basis and part-time people also.

“It’s been a huge learning curve. Looking back, in hindsight, I can admit I’ve made mistakes. I’ve had the opportunity to work with some really brilliant young people.

“At the time, we were going through a period of rapid expansion and there were always a lot of balls up in the air that had to be caught at any particular time.

“We were always at a place where we had to work hard and I was very fortunate to work with some brilliant people.

“But some of whom I essentially burnt out from working too many hours. There comes a point when, no matter who it is, they will get burnt out.

“You will probably take a bit more yourself because you are doing it for yourself and that’s probably the biggest mistake I would have made.”

To prevent this issue arising again, PJ looked to his peers.

There are some excellent farmers out there and they’re the people I need to learn from. They’re finishing early in the evening and getting out and doing something else.

“They’ve a really good work-life balance and they’re remunerating people properly. I want people to walk in the door in the morning and enjoy working here and enjoy working with me and the cows.”

Challenging the industry

The Young Farmer of the Year also shared his thoughts on the milk price and what’s needed to make dairy farming in Ireland safe and sustainable.

He urged farmers and the industry to move away from the mentality of being the lowest-cost milk producers in the world.

Last year, my costs of production were 20.68c/L. So what if my costs are 22.68c/L, if the extra 2c/L is going towards labour and I’m employing someone who enjoys their job and is getting a proper level of remuneration.

“Good people literally pay their own wage and more along with it. They give dairy farming a whole level of sustainability.

“To me – if milk price is anything less than 26-28c/L – there’s no point in it. You’re leaving no room for capital investment, which is needed to have safe and sustainable farms.

“If you want an agricultural industry going forward, let’s sit down and make sure we have a margin here.

“Dairy farm incomes are not at a record high this year; they’re exactly where they need to be for dairy farming to be sustainable. We’ve reached a point where dairy farming is now sustainable again and we can’t go back.

There’s nothing to be proud of being able to produce milk at a profit at 20c/L. That’s not something to hold our heads up and be proud of.

PJ also stressed the importance of having adequate finances for capital investment and urged farmers to reconsider their stance on farm safety.

“What’s the point if there’s a one in 72 chance that we are not going to get through our year’s work?

“Just because we are farmers doesn’t mean that we need to get a different set of rules on farm safety. If we are actually serious about health and safety, we need to call the whole industry to a halt.

“We want farm deaths to be at an absolute minimum. Tough decisions have to be made and we have to re-examine our conscience.

Farming is beautiful. But, unless we are serious about putting in capital investment and not worrying about being the cheapest milk producers in the world, we will never solve the problem.

“There’s nothing to be proud of if we have farm deaths that are way in excess of industry norms right across Europe, which they are right now.

“We need to start focusing on getting our people home alive and enjoying farming,” he said.

Advice to young farmers

After building a considerable dairy business, PJ offered the following advice to young farmers. He said: “People should go and learn from the best until they’re 25 or 30. Over this time, they should build up financial reserves.”

The best, he said, could be your father, a local dairy farmer or you may have to travel to find the right mentor.

Be clever, put money together and give yourself the opportunity to grow your own stock if you want to go down that route. Everyone’s aim mightn’t necessarily be to own their own cows.

“If owning your own cows is your preferred route, you should aim to maximise stock relief over the four years that it is available.”

Continuing, he said: “Nobody should be farming without an accountant. They’re the people that give us the guidelines and us farmers are the ones to manage the system to hit those targets.

“My accountant, Ben Fogarty, is blue in the face from getting calls from me. Without his input, I would have made some very expensive mistakes along the way.”

He also highlighted the importance of planning when it comes to utilising stock relief.

“One mistake that I made is that I started farming mid-way through the year. I should have started on January 1. Because I started mid-way through the year, I lost six months of stock relief that I never got to utilise.”

The Kilkenny-based farmer also spoke about the importance of building a strong support network.

“A lot of people backed me and said yes when it would have been easier to say no. My co-op manager helped me out in so many different ways.

“Even the advice that’s available from Teagasc, having the likes of Emer Kennedy, Riona Sayers and Pat Moylan to call on is a great help.

When you get that little bit shaky, and you question, ‘is the plan going to work’, having those people on your side gives you confidence to stick to the plan as best you can.

“Yes, you will hit a few bumps along the way. But it’s easy to make a phone call to someone who has hit that same bump – whether that’s another farmer, advisor or co-op manager.

“The more people you ask for advice, the more you learn.”

What winning the Young Farmer of the Year title means?

On November 28, the Callan native was announced as the winner of the FBD / Macra na Feirme Young Farmer of the Year Competition.

On winning this prestigious title, he said: “It wasn’t until I was actually coming home that I realised that I was after winning Young Farmer of the Year and it was a real honour.

A couple of things hit me on the way home in the car. Firstly, I didn’t really win the prize myself. For there to be any justice, there should have been 50-100 people up there accepting that prize with me.

“I was going through my phone and the amount of people that congratulated me was great and I wanted to ring back so many of them to say thanks.

FBD Young Farmer of the Year 2017

“Some of the people had leased me land, others were AI men, the vet and nutritionists.

“I will try my best throughout the year to fulfil the role as best I can. But, Kevin Moran is the best winner I’ve seen in that competition in a long number of years and that’s not to be disrespectful to any of the other winners. He’s just superb.”

The route into dairy farming

Having farmed alongside his parents for over a decade, the O’Keeffe family had come to a crossroads. PJ was keen to drive on the business after his parents had spent their lifetime developing the Callan-based holding.

“No different that anyone else, my parents had put everything into farming and they needed a retirement plan.

We agreed upon a family settlement and that allowed me to take control of the business and for mam and dad to retire. My parents were given the opportunity to step fully back and I got to push on and grow the business.

Since taking over the business, PJ has overseen a considerable expansion; moving from 72 cows in 2014 to over 400 this year. Next year, the Kilkenny-based farmer plans to milk 550 cows.

Herd growth:
  • 2014: Milking 72 cows on 106ha;
  • 2015: Milking 200 cows on 132ha;
  • 2016: Milking 320 cows on 156ha;
  • 2017: Milking 430 cows on 198ha.

After wiping the idea of developing the entire farm on day one, PJ planned to grow the business incrementally.

The development of the farm has been carried out on a step-by-step basis. A considerable investment in infrastructure has been made on the farm – as sheds, roadways, milking parlour and other facilities have all been developed and improved over the years.

“It has happened at a fast pace. But, when I stand back and look at what I’ve achieved, I quickly realise that I am building a future here for myself.

“I was coming from a place where the bank had no history with me and I wasn’t in a position where I could borrow money for an entire greenfield site.

Even though I believed in myself, I had no sets of accounts and no bank would have backed me.

However, PJ admits that he was in a somewhat lucky position.

“I have a lot of fixed milk and I’m grateful for that. Not everyone has that opportunity. I have the security to know that I can go to the bank and say I have this much fixed milk.

“I am guaranteed to have a milk price of 28c/L and the bank has the reassurance that I’m delivering on everything I have promised to do over previous years.”

Current production

As it stands, 140 cows have been dried off. These are first-lactation animals and cows that are expected to calve before March 13. Calving will commence on February 1 next year and 550 cows are expected to calve down over a 12-week period.

PJ is currently milking a crossbred herd and 462kg/cow of milk solids were delivered to the creamery this year. That was on the back of 3.63% protein and 4.49% fat.

In addition, the milking platform was also stocked at 3.6 cows/ha this year and the platform grew 14.5t/ha. However, PJ feels that there’s potential to produce more grass on the milking platform.

Next year, the stocking rate on the milking platform will be increased further as the Kilkenny-based farmer brings more cows into the system to maximise his stock relief before incorporating the business in 2019.

“I am going to a higher stocking rate on the milking platform and milk prices are probably going to allow me to do that.”

PJ is also toying with the idea of moving away from a crossbred cow.

We are looking at the idea of going back to Holstein Friesian, simply because it’s very difficult to get rid of the calves in the spring.

“I’m benchmarking myself against some of the best farmers out there and they are doing equally as good or better with a Holstein cow.

“The differences that were there between the crossbred cow and the Holstein Friesian are not there anymore, as the EBI is taking that away. If we want to keep the system nice and simple, the crossbred cow can give us that.”

A move in another direction

Next year, the system will also move in another direction, as a number of cows will calve down during the autumn.

There are two primary reasons why this change is being made. Firstly, PJ wants to see what way the system reacts to these autumn-calving cows and he hopes that it will alleviate some of the pressure during the busy spring.

Secondly, the young farmer has to consider the asset value of these animals, as 2018 will be the last full year that he will be able to claim stock relief before incorporating the business.

“We all have to start thinking differently about the way we manage labour and run these races if we want to make farming more sustainable.

I ended up with a 10% empty rate this year and there’s no reason why those cows should have been empty. There were embryo losses for some reason and we’re currently doing blood tests to establish what the cause was.

“In the coming weeks, fixed-time AI will be used to breed those cows and they’re going to get one shot of AI to try some level of split calving to see will it take the pressure off spring calving.

“I have until 2019 to maximise my stock relief and every valuable cow I can keep on the farm up until then, I can then bring into a company.”

The team

Central to the success of PJ’s business is the team involved in the day-to-day running of the operation and the opportunity given to him by his parents.

Along with himself, Lynda Kingston, who helps manage the herd, and Alex Okresa – a full-time milker – both play a central role in the business.

PJ has also utilised contractors more over recent years. On this, he said: “We need to start thanking contractors for the hard work they are doing for us. We as dairy farmers think we are great, but we’re nothing without these people.

I’ve been so fortunate to have Sean Davies of All Seasons Agri to come in here and to do all the baling and feeding.

“He’s an exceptional guy and he’s the benchmark that contractors need to match. He delivers, comes at the same time every day and he never lets me down – that’s invaluable.”