01264 334344 

Organic growth creates dairy market success

Published: 14 February 2019

To survive as a dairy farm in today’s market is challenge enough, so how has Aled Rees managed to thrive and expand his herd? The answer, he says, is keeping an eye on costs, attention to detail and a wise decision made 16 years ago.

Seven generations of Aled Rees’ family have farmed around Penparc Cardigan. These days, Aled farms as a limited company with his wife, Hedydd, and uncle, David Jenkins. They run the 150-acre organic dairy farm at Trefere Fawr, which supplies a major organic dairy manufacturer, and a further 700 acres of organic beef, sheep and arable, most on rented land. The three have been working together since 1996, when they had just 30 cows in their dairy herd. They decided in 2001 to convert to organic production.

“We all agreed that farming organically is much better for the cows and other animals, as well as for the environment, the land and the wildlife. It also makes our own working lives healthier!” says Aled.

Going for quality

Because the family had just taken on extra land, they were in an ideal position to concentrate on extensive farming and to go for premium-attracting quality. When prices fall, income from rearing young stock and from beef animals helps them ride the shortfall.

“It was a good decision,” says Aled. “We were originally lured by the higher price we could get at the time for organic milk and there’s still a lot of demand for it. We’re paid a fair price and are part of a group of 14 dairies that supply direct to one of the UK’s leading organic dairy manufacturers. It’s an annual contract but I have complete confidence that we’ll continue to be needed. The brand is strong and growing, and they’ve just invested £5m in our company.”

The company’s need for more organic milk of the quality they demand has given Aled an opportunity to expand his own herd, in the knowledge that there is a ready market.

Growth plans

“When I was growing up, my grandfather and father had neighbouring farms. Although they had separate herds and businesses, they shared machinery and farmed as one,” explains Aled. “We were farming nine miles away, but then had the chance to take on the tenancy of my parents’ farm. Later, with a mortgage from AMC, we were able to buy the land, homestead and buildings of my grandfather’s farm.”

These days, the two farms – Glyn and Treclyn – are united again, and are even expanding. With the help of a £1m loan from AMC, Aled has just overseen the building of a complete new dairy unit. There’s housing for 300 cows, a state-of-the-art milking parlour and slurry pits.

“We had 200 cows this time last year and have gradually been adding to the herd, selling the calves and only rearing heifers as we geared up for the new facility,” said Aled.

A track record

“I have to say, though, that we wouldn’t have been able to carry through any of our plans between 2008 and now without the support of AMC,” says Aled. “They helped us buy land and the farm, then the remaining acres, and now the dairy. Martin Waite is a decent chap and we’ve gone from strength to strength with his help.

“For any application, there’s paperwork at first, of course, and some hoops to jump through but that paves the way for a very easy relationship afterwards. It’s been in our favour that we’ve always supplied business plans and projections and then exceeded those forecasts. We have a good track record.”

“Aled, Hedydd and family run an excellent business with extremely good cost control. They make the most of their natural resources and the care of their livestock. They have set their plan and followed it, taking account of market conditions and demand,” says Martin Waite, AMC Regional Agriculture Manager.

“Their requests for funding always come after thorough planning and with a sound business rationale. This makes it very easy to support them.” The plan now is to continue future-proofing the business, and Aled would like to buy rather than rent more land, hopefully consolidating what they have.

“We’ll continue to produce a lot from forage and keep to our very low cost system,” adds Aled. “We’re very focused and we’re always looking forward.”

Key learnings from Trefere Fawr

  • Keep costs low. Try to maximise from forage as much as you can so you can keep control of inputs.
  • Pay attention to detail. When you work on low costs, you need to keep a close eye on everything because small changes can make a big difference.
  • Think of the animals. The new facility is designed to be cow-friendly, with twice the room and a rotary parlour so that cows can get back out faster. You can get your cows to perform better when they’re happier and less stressed.

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

If you have a hearing or speech impairment you can use Relay UK. More information on the Relay UK Service can be found at: relayuk.bt.com.

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.

We adhere to The Standards of Lending Practice which are monitored and enforced by the LSB: www.lendingstandardsboard.org.uk and apply to businesses which have an annual turnover of no more than £25 million.

The Agricultural Mortgage Corporation plc is a wholly owned subsidiary of Lloyds Bank plc. Lloyds Bank plc is a member of Lloyds Banking Group. Lloyds Banking Group is a financial services group that incorporates a number of brands including Lloyds Bank. More information on Lloyds Banking Group can be found at lloydsbankinggroup.com.