Bisterne Farms, NMR RABDF Gold Cup winners, welcomed visitors to their farm last week (22 May) to celebrate their victory in the competition. Whilst they might be a break from tradition, in terms of the system type they run, there was no doubting they were worthy of the title.

The rain couldn’t dampen any spirits and the crowds at all three talk stations throughout the day proved they were there to absorb the knowledge of the Bisterne Farms team.

Talks were held by three of the companies who have been integral to the success of the business since George took on the CFA at Bisterne Farms.

Farm Business Consultant, Oliver Hall, from The Andersons Centre – who set up and now facilitates the Contract Farming Agreement (CFA) at Bisterne Farms – explained that, whilst CFAs are governed by contract law in this country it is still vital that both parties – the farmer and the contractor are clear on who is putting in and providing what into the agreement from the off as this will vary in each case.

“For example, the livestock split can be done in a number of ways, at Bisterne there is no depreciation on cows as they self-replace them due to rearing their own replacement heifers on the farm, this came about because of a requirement by Bisterne to maintain a herd of cows that could stay in place should George leave the agreement.”

With a shift from BPS to SFI it is imperative when it comes to deciding how to divide what’s in the agreement as we are now seeing a greater interaction and impact on the trading surplus and what’s being carried out on the farm, which means amending the CFA to make sure parties owning and operating the farm are completely aligned in their objectives. “Looking at where the subsidy, gross margin and costs best sit will allow you to get the greatest income out of the SFI”, says Mr Hall.

For a CFA’S success the goal should be that the divisible surplus is at least 10% of the trading income. The CFA is best structured by establishing a second bank account – which is still the property of the farmer to help discipline that the income and expenses are going into the right place. This allows a full audit trail of the invoices to ensure nothing is missed. The majority of the Divisible Surplus should go to the contractor, at Bisterne Farms they operate an 80:20 split in favour of George Brown as the Contractor.

The idea of a CFA is that it should net a return that is greater than renting out your farm, but as with many things, it doesn’t come without risk. To mitigate risks it is worth controlling what factors you can when you are able to counteract those such as weather and milk price which are governed by external factors. A CFA can offer solutions to succession or gaps in succession and if done well can utilise and reward some of the best people in the industry, who may otherwise not have been able to progress their careers. Likewise it works the other way around and has the ability to provide the solution to some farm owners who are looking to step away from the responsibility of day to day running and operational accountability.

Piers Badnell from LIC outlined how it’s all about the right cow for the right system. At Bisterne they look for a cow who can maximise the amount of grass she can eat, as energy gathered from grazed grass ends up as milk or milk solids.

First class grazing management comprises of a few different factors, one of which is managing grass supply to maximise our input. Stocking rate is key with a typical spring calving block looking at a stocking rate of 40-50 cows per hectare.

“The beauty of operating a split block calving system like Bisterne is the ability it creates for us to manipulate demand. This means when autumn cows are drying off grass is kept in the diet. Whilst it isn’t possible to control growth it is possible to control demand which in turn allows control of average cover.

“This can be done by plate metering or using a grass wedge with the aim being to have all your paddocks at different growth stages.”

The need for the right cow is crucial to enable us to do what we’re trying to do. There is no point trying to implement a cow whose features don’t suit your system as you are at a disadvantage from the off. The correct cow, alongside cost of production, utilisation of grass and grazing properly, provides quality regrowth.

Many of us will have been told that litres drive profit but this is not strictly true – there is actually no correlation between litres and profit according to Mr Badnell, who says cost of production is actually the key to profitability.

“We should be looking at how much each hectare can provide and utilising every possible bit”, he says.

As per the tradition, Dairy Industry Analyst, Chris Walkland managed to lift spirits with some positive news on milk prices. He was first keen to outline the amount of current investment we are seeing from processors which only highlights the confidence in UK dairy.

His take-home from the session was that processors and end buyers must not take farmers and milk supply for granted, and we must do what we can to ensure they are aware of how bad weather contributes to the net effect on both land and cows. With no surplus of milk on the market commodity prices will not be falling as predicted but instead increasing, and quickly.

“Latest market reports show butter prices trading higher as a result of a firm GDT with liquids going further”, explained Mr Walkland.

“Prices will only trade up from here and they all point in the same direction. There are much better times ahead, and whilst a few weeks ago I wouldn’t have, now I can see 40p in the making.”

The 2024 NMR RABDF Gold Cup Competition has now launched and applications can be found online at www.rabdf.co.uk  The closing date for applications is Monday 22 July. For further information please email romanymarshall@rabdf.co.uk