01264 334344

Robotic dairy farm adopts new farming policies

Published: 23 October 2015

Over the last 10 years, Alan Perrett has reassessed every aspect of his dairy farm and made some significant changes to the way he manages his herd and grassland. Converting to robotic milking, adopting a zero-grazing policy, installing a slurry separator and leasing out 23 acres of land for photovoltaic (PV) energy production have, amongst other changes, all helped to mitigate the effects of rising input costs and falling milk prices.

Alan and his father, Andrew, manage a herd of 140 dairy cows at Park Farm in Iwerne Courtney, Dorset. Eight years ago they moved away from a conventional milking parlour with cows housed on straw yards to a cubicle based system with cows milked by two robots.

“Like many family farms, we wanted to reduce our reliance on external labour,” Alan explains. “We also wanted to increase the herd’s productivity and realised that moving to an automated milking system was the best way for us to achieve three times a day milking. We took out an AMC loan and converted the farm to a robotic system.”

The switch had the desired effect with 3.1 milkings per day and milk yields increasing from 6,500 litres per lactation to an average of 10,500 litres.

We knew we had to do something to improve our profitability forecasts and look beyond the cows to find new sources of income.

Alan Perrett Park Farm, Dorset

Not everything has been plain sailing though and the continuing round of milk price reductions has forced the Perretts to reassess their finances.

“When the robots were installed we based our budgets on a milk price of 18.3 pence per litre. Since then, input costs have risen dramatically, and we have seen a third cut off our milk price in the last 12 months. We are still on target to stay ahead of our original budget but we were starting to feel the pinch because we were paying back our original AMC loan too quickly. Therefore we spoke to AMC and restructured our outstanding loans to extend the borrowing period and reduce our monthly repayments. AMC understood our predicament and were happy to help. Their willingness to cooperate really helped to ease the farm’s cash flow and has enabled us to invest in other farm improvements.”

Alan’s farming philosophy is based on the principal of maintaining an eye for the finer details of cow and grassland management. As well as focusing on cow health, welfare, nutrition and hygiene to maximise productivity, he also takes a wider view of how best to use the farm’s land assets and nutrients.

“The robots have helped to improve the herd’s productivity but we have reached a point where we cannot increase our earnings by just producing more milk. So we have looked at new ways of improving efficiencies and increasing the farm’s total income.”

Part of Alan’s strategy has been to safeguard the farm from rising input costs including water and electricity charges. “We have already installed two boreholes to protect the farm from rising mains water costs and in 2013 installed 50kW of solar panels on one of the farm’s sheds to reduce our reliance on purchased electricity. The electricity generated by the solar panels can then be used to run the farm’s robots and also the slurry separator.”

23 acres of land is leased out as a solar park, giving the farm a diversified income stream.

Meanwhile, a 23-acre block of land has been leased out on a 26-year deal as a solar PV park, with the deal going ahead prior to the Government’s recent announcement of a review of the Feed-in Tariff Scheme. “Coping with market volatility is not easy for any business,” Alan continues. “We knew we had to do something to improve our profitability forecasts and look beyond the cows to find new sources of income.

“Those 23 acres are our most profitable at the moment,” he claims. “We employed a land agent to negotiate the best possible rental terms and now earn a guaranteed, index-linked income. We do not own the solar panels and cannot use the electricity they produce, but we benefit from quarterly cash injections that boost the farm’s accounts.

“In an ideal world we would still be farming that land, but the dairy sector is far from ideal and needs must. We do graze some sheep under the panels so we’re still getting the best of both worlds to a certain extent.”

Alan also works on a part-time basis for Lely – the manufacturers of his farm’s robots – helping other farmers to train their cows to use robots. “It is rewarding work which gives me the opportunity to earn a little bit extra. It also lets me learn from other people’s good ideas and best practices, which I can then apply to my own farming methods.”

As well as looking for new income streams, Alan has also changed some of his core farming methods. He uses a zero-grazing system to provide fresh grass to the cows during the summer to reduce the herd’s feed bill and has reduced silage contracting costs by an estimated 30-40% by investing in his own grass forage wagon.

Zero-grazing has helped to reduce production costs at Park Farm.

Alan has also invested in a slurry separator to reduce the farm’s fertiliser bill. “The farm was recently classified as being in a Nitrate Vulnerable Zone so we knew we had to do something to improve our slurry management,” he describes. “We decided to invest in a separator to enable us to make the most of the farm’s own nutrients and have introduced red clover to the grass swards to fix more nitrogen. Two years ago our fertiliser bill was almost £15,000. Last year we reduced it to £8,000 and this year we have not purchased any fertiliser.

“We test the soils regularly to make sure we are not impoverishing their nutrient value and are still experimenting to see how far we can push our own self-sufficiency. If we have to purchase fertiliser in the next year or two we will, but at the moment it is very satisfying to be able to make such a significant saving. It is just one part of our bigger solution to coping with difficult market conditions.”


Our loan application process is quick and easy

Start by working out what you want to achieve, how much you want to borrow and how long you want to borrow it for.

Contact us for a quote

How much can you borrow?

Use our Mortgage and Loans Calculator to work out how much you could borrow to support your ambitions.

Mortgage Calculator

Calls charged at standard rate.

AMC loans available for business purposes only, provided on a secured loan basis. Minimum AMC standard loan £25,001, minimum flexible facility £30,000. To meet customer requirements, lending criteria will vary. Lending is subject to status.

If you have a hearing or speech impairment you can use the Next Generation Text (NGT) Service (previously Text Relay/Typetalk).

Office hours are 09:00 to 17:00, Monday to Friday, excluding Bank and Public holidays.

Please note that any data sent via e-mail is not secure and could be read by others.

The Agricultural Mortgage Corporation plc, registered in England & Wales, no. 234742. Registered office: Charlton Place, Charlton Road, Andover, Hampshire SP10 1RE. Telephone: 01264 334344. The Agricultural Mortgage Corporation plc is a wholly owned subsidiary of Lloyds Bank plc.

Lloyds Banking Group includes companies using brands including Lloyds Bank, Halifax and Bank of Scotland and their associated companies. More information on Lloyds Banking Group can be found at lloydsbankinggroup.com.