‘Living the dairy dream’ on leased land in Co. Carlow

Jamie and Lorraine Kealy, a husband-and-wife team, are a shining example of what can be achieved in a relatively short space of time when it comes to developing a career in dairy farming.

Jamie – a first generation farmer – marked his progression from owning no land prior to 2003 to milking 94 cows this year.

What makes the Kealys’ story even more unique is the fact that the dairy platform, which consists of 36ha, is leased from two separate landowners.

Addressing over 500 delegates at the Irish Grassland Association Dairy Summer Tour yesterday, July 25, Jamie spoke of his progression into dairy farming and how he is finally living the dream that he thought would never be possible.

Purchasing land

Jamie began by giving delegates a brief introduction to his life before farming, which included leaving school after completing the Junior Certificate.

Like his father, the now Carlow-based dairy farmer decided to ply his trade in the construction industry and completed an apprenticeship in carpentry at the age of 17.

By working alongside his father on construction sites, he discovered that he had a love for “outside work” – particularly ground work and concreting.

After completing the carpentry apprenticeship in 1996, Jamie made the decision to give the ground work element of construction a go and decided to buy a digger of his own when he was nearly 18-years-old.

“I went to the bank to look for money to buy a digger, but they refused me a couple of times before they gave me the money,” Jamie said.

“Eventually, I got the money off the bank to buy the digger and I started doing concrete work for different builders and my own father.

Things progressed from then on and I got a site off my father in 1999 and built a house on it at 20-years-of-age.

“In 2003, after building the house, a piece of land became available a couple of miles over the road that consisted of 16ac.”

After speaking to his wife Lorraine and the auctioneer handling the sale, the Kealys decided to put their own house on the market with the intention of buying the block of ground.

“We were very lucky. We sold our own house within two weeks and we were able to buy the 16ac and look for planning to build our own house,” Jamie added.

Venturing into beef farming

“The first thing that went up on the 16ac site was a shed and a cattle crush; we applied for a herd number and got it.”

This marked the beginning of Jamie and Lorraine’s journey into the world of farming, as heifers were bought in the local mart to carry to beef.

“We always dreamed of farming and being able to go to the mart to buy cattle. We bought store heifers and finished them,” Jamie said.

“It was a hobby thing because we were working off farm; but everything we got out of it was put back into the business. We were living to be able to buy stock to get the farm up and running.”

However, Jamie’s quest for purchasing the best quality cattle, which involved competing with exporters, meant that the profitability of the store-to-beef system was less than desired.

“In 2007/2008 we went out and bought 75% Limousin cows and built that system up to 28 cows, while also trying to breed the best progeny and sell them to live exporters.

“In 2010, we put our hand up to say that we would be interested in joining the BETTER Farm Programme.

“It was probably the best move that we made in our farming journey because it started to get us tuned in to grassland management and the live weight gain of the progeny of the suckler cows.

“We were getting 1.7kg of live weight gain from our bull calves at 0-10-months-of-age. These calves were being sold to the export market.

“We were selling the cream of the crop, but it was still only a hobby because we were working off farm.”

However, Jamie stressed that everything that was made from the suckler business was reinvested into the business.

This resulted in the Kealys leasing out and purchasing land to bring the total area owned to 35ac. The owned land is in three separate blocks and is located 10km away from their current dairy operation.

A new opportunity in 2013

Despite the progress being made with the suckler enterprise in the preceding years, the Kealys were presented with a new opportunity in 2013.

This came in the form of renting a 27ha block for 15 years from a local landowner.

“In 2006 and 2007, we built silage pits and slatted units on the farm and we built up a relationship with the landowner.

“He knew that I was always interested in land. We used to drive around the country on a Sunday and dream about buying or renting land.

“We often spent time wondering how we could become involved in farming. Tom (the landowner) knew this and knew that we were interested in farming.

“Tom approached me and we looked at going into a beef partnership. We looked at the figures, and got advice from Teagasc, and we couldn’t make it work that I could go full-time farming on the beef enterprise and take a wage from the business.

“The beef enterprise just wasn’t a runner and in fairness to Tom, he said, ‘If you’re interested in it, I’m not going to hold you back. I’ll lease you the land and you can go down the route of beef farming or whatever suits you’.

“We looked at the figures and beef just wasn’t adding up, so we looked at a dairy enterprise. We had no knowledge of dairying whatsoever, but we decided to sit down and draw a plan ourselves – this was probably the best thing we have ever done.

“We drew up a six-year plan and brought everything into the equation. We also kept bouncing the plan back off our local Teagasc advisor.

“We probably spent about two months doing the plan; but when we had the plan that we were happy enough with, we said we’d apply for the new entrant quota.”

Despite feeling pessimistic about their chances of receiving the quota, the Kealys were successful in their application in August 2013.

The end goal was to go full-time farming and to create enough income for us to be able to live off the farm. That was our dream.

Putting dairy cows on the ground

In October 2013, the Kealys purchased 64 in-calf dairy heifers to milk on the leased block the following spring. All of these heifers were purchased from the one farm.

Jamie was stringent when it came to selecting the back bone of his new herd and visited five farmers before settling on a group of heifers.

Initially, heifers were selected on the basis of EBI, herd health history and calving date. The latter would become the main criteria utilised for selecting their future herd.

Jamie said: “We visited top-class farms around the country that were willing to sell us 60 heifers. But, in the end it came down to calving date.

“We wanted to hit the ground running and we wanted milk going out the gate as quickly as possible to meet the lease payment in March.

“The heifers started calving down around January 20, 2014. They were calving real smartly and we hit the ground with a bang – it was a quick learning curve,” he said.

Cupping the first of their cows in January 2014 marked a milestone for Jamie and Lorraine, as they were one step closer to achieving their dream.

To further advance their farming vision, the husband-and-wife team purchased 20 in-calf heifers in October 2014 and a further 20 in-calf heifers in October 2015 to leave them milking a herd of 94 cows today.

Along with purchasing heifers in 2015, an extra 10ha of land, on the other side of the road from the milking platform, became available to lease from a different landowner.

The Kealys leased this block to increase the overall size of their milking platform to 36ha, which currently carries 2.6 cows per hectare.

The owned land, mentioned above, along with another 7ha of leased ground makes up the remainder of the Kealys’ operation. This ground is used to rear replacement heifers and for silage production; and when factored into the equation, it brings the overall farm stocking rate to 2.6LU/ha.

Investment

Jamie told the 500-strong crowd in attendance at the AIB-sponsored event that the dispersal of the suckler cows and their progeny covered the costs of buying the replacement heifers.

However, the monies used to buy these heifers are included in the costs associated with setting up the dairy operation.

Without the leasing charge, the Kealys have invested approximately €2,350/cow. This encompasses heifer costs of €1,200, €750/cow on installing a new parlour, €150/cow on upgrading the cubicle housing facilities and €250/cow on road and water expenditure.

Despite the relatively large outlay, Jamie admitted that the expenditure could have been €500/ha higher if the 27ha leased originally – the foundation of their milking platform – had been low in pH, phosphorous or potassium.

At a stocking rate of 2.6 cows per hectare; that would be an additional outlay of over €192/cow on the €2,350 already invested in the system.

Current performance

Richard O’Brien, the Programme Manager of the Teagasc/Glanbia Joint Programme, gave farmers a rundown of the current levels of performance being achieved by the Kealys’ herd.

As it stands, he said, the majority of the cows in the herd are British Frisian/Holstein Friesian cross and high EBI sires are being used to breed the next generation of cows on the farm.

Some 30% of the cows in the herd have a proportion of Jersey genetics, while only two cows of the 94 herd are 50% Jersey/50% Holstein Friesian.

On average, the cows are producing 25L of milk and 2kg of milk solids per day from a concentrate input of 1.5-2kg/day.

O’Brien also touched on the herd’s fertility and production performance in 2016.

Although the concentrate input stood at 780kg/cow in 2016, the Kealys’ average concentrate supplement target sits closer to 550-600kg/cow.

It spiked last year due to poorer-quality silage, resulting in cows having to be supplemented with 2kg/day of concentrate to maintain condition towards the back end of the year.

The ‘bread and butter’ of the business

Teagasc’s George Ramsbottom was also present and he discussed the finances of the Kealys’ dairy enterprise.

When an own-labour charge of €30,000 (5c/L) is factored into the equation, he said, the Kealys’ cost of production stood at 27.54c/L or €3.35/kg of milk solids in 2016. This was before principal repayments were taken into consideration.

This left the Kealys with a net margin of 5.38c for every litre of milk, or €0.65 for every kilogram of milk solids sold off the farm in 2016.

Jamie added that the farm provided 100% of both his and Lorraine’s income in 2014. However, this dropped to just 60% in 2015/2016.

“We took 100% of earnings from the dairy enterprise in 2014 and we were living the dream, but working quite hard,” he said.

We did feel the pinch in 2015 because we were in a great milk price year in 2014 and we knew no different.

“Looking back now, maybe we should have thought about it more. We were very lowly borrowed coming into this. We felt that we didn’t need to borrow a whole lot of money, but that turned out to pinch us a bit.

“We set up paddocks and improved the water system and we spent bits and pieces. When we sat down and looked at it, we actually spent €25,000 out of cashflow in 2014.

“We felt the pinch in 2015/2016, but we still had the machinery for doing the ground work and there was a bit of work available.

“I used to milk the cows at 5am and again at 6pm. During the day, I did contract work just to support our income.

We never took our eye off the ball on the farm or the construction side of things and we weren’t letting anything slip on the dairy farm.

“We should have talked to the bank rather than spending that €25,000 out of cashflow. It would have made a lot more sense to borrow the money and spread it over a longer period of time,” he said.

Despite the dip witnessed in 2015/2016, Jamie said the farm is on track to provide 100% of his income this year.