South African dairy farm invests despite the investment risk

However, for one farm milking 700 cows near Johannesburg, it's business as usual with a modernisation program well underway.

Corne Nel and his family run Doornfontein Melkery at Randfontein, just 40 kilometres west of Johannesburg, where the summer temperatures can reach 40 degrees Celsius.

As well as the milking section of the herd, the farm is home to another 1280 followers and a commercial beef herd of 400 Bonsmara cows that produce meat for the local markets.

To set the scene, the home dairy farm extends to 300 hectares but there are an additional six farms in the business adding another 2100ha to cater for growing crops and managing the other livestock.

Lactating cows on the home dairy unit are kept in open air corals and split into groups to make it easier to manage them at feeding and milking times.

This farm has already modernised by installing a DeLaval 64-point rotary milking parlour just two years ago, which speeded milking times up considerably, but there are also plans to build new housing.

Dairy unit manager Pieter Barnard explained how herd performance had increased steadily thanks to new equipment and software.

"We have 700 cows milking, which are mainly Holstein with some Ayrshires in the mix," Mr Barnard said. "Our average yield is 31.5 litres per cow per day at 3.6 per cent butterfat and 3.1pc protein.

"Cows are split into different performance groups and fed accordingly with a mix containing lucerne, various grasses, maize silage, brewers grain, sorghum, molasses and a concentrate. Everything is grown by us except the lucerne.

"We feed around 56kg per day to each cow with a dry matter intake of 25 to 28kg. Our milk goes to Bosparadys farm, which bottles their own milk plus that from a number of different suppliers like us.

"Farmers in this area receive an average of Rand 4.86 ($A0.49) per litre but the shops charge Rand 11 ($A1.10) per litre."

The farm employs 60 staff to cover the dairy and beef herds as well as feeding and working the crops in the fields. Eight staff are on duty each milking three times per day at 4am, noon and 7pm.

A good calf-management program is also a vital tool on this farm to ensure healthy, well-developed heifers enter the main herd at two years of age.

"Once born the calves receive up to four litres of colostrum within the first two hours," Mr Barnard said. "They are moved to the first stage calf housing into individual pens where staff closely monitor them. After two weeks they are moved into calf hutches for another two weeks and are weaned at 64 days old.

"We keep the heifers for the main herd and the bull calves go into our feedlots for fattening as bull beef. With the intense heat the calves are kept under shade during the summer times in open pens to protect them."

According to Mr Barnard, the biggest challenge affecting dairy farmers in South Africa is decreasing milk prices, which reached Rand 5.50 ($A0.55) just a year ago.

In order to increase margins per litre, the Nel farm is investing in new equipment, technology and ideas to increase milk quality and reduce costs.

As well as the new efficient rotary parlour and a new hygiene program along with it, milk quality has started to improve already.

"Our somatic cell count was in the region of 600,000," Mr Barnard said. "Thanks to the new parlour and a strict hygiene program of wiping the teats before milking and dipping afterwards we were able to bring the SCC down to its current level of 80,000 in a period of five to six months.

"Heat stress for the cows is another major issue as they spend all their time in the open corals. We do have shade cloths erected in all the corals and you can see the cows lying in a row under the projected shade during the day.

"Another issue in the corals is mud stress because when it rains the ground gets very wet and muddy for them to walk in.

"There are already large fans and water misters in the collecting area prior to milking to reduce heat stress. However, we have plans in place to build housing in the corals to better protect the cows and make them more comfortable. These houses will be of a narrow construction and built in the direction of the winds to help cool them down."

Another tool recently introduced to the farm that Mr Barnard said had been a huge factor in increasing herd health and milk quality was a new software package.

"Cow manager really has been a major influence on improving the health and management of the cows and with that, milk quality has also increased," he said.

"We are now able to manage the herd more efficiently on the computer and know exactly which cows are at what stages. Our calving index has fallen from 496 days to 392 days and my average open days is down to 116 just with better management."

Although labour is plentiful and relatively cheap in South Africa, the Nel farm is hoping to invest in robotic milking systems in the future.

"It takes a lot of time to move the different milking performance groups to the milking parlour, three times per day," Mr Barnard said. "This would be easier to manage with a number of robotic milking units on the farm perhaps in different areas. It would help save time and labour costs in the long run."

Even with the current political uncertainty in South Africa, this farm is confident enough of its future to invest heavily to make the business more efficient and to put it in a good place to tackle any price fluctuations that might lie ahead.

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