Many producers missed out on the latest round of grant funding, but investing in tech can still be justified if the figures stack up.
TEXT RACHAEL PORTER
The latest round of Farming Equipment and Technology Fund grants is now closed, and some producers were disappointed that their applications failed to meet the threshold. But formulating and implementing a plan B could take the sting out of missing out, according to The Dairy Group consultant Susie Felix.
Reports from producers and industry bodies, via social media, show that a significant number of applications for the grants – as many as 50% in some cases – have been unsuccessful, with rumours that some applicants failed to meet the necessary criteria, or the points threshold, by extremely narrow margins.
“This is disappointing, but all is not lost and there are options for producers who still wish to invest in tech to improve herd management and their businesses’ bottom line,” says Ms Felix.
“It is frustrating and there’s no appeal process. The money has been allocated and that is that,” she adds. “But many producers will have carried out at least a basic, if not detailed, cost-benefit analysis and concluded that investment in the tech they were seeking funding for is worthwhile, even without grant support – and many are putting a ‘plan B’ into action.” She does, however, advise caution because milk prices are under increasing pressure and input costs remain relatively high. “It’s important that the figures stack up and that businesses see a return on investment, whether that’s funded by cash reserves or loans, or a mixture of the two. A partial budget is a good approach to assess the impact on the business, and producers should be looking for a 20% return on investment.
Producers who applied for funding – whether they were successful or not – have identified a need for, and benefit of, making an investment, according to SenseHub’s Paul Mitcham. “That’s not changed. And there is a real risk that the businesses that failed to secure a grant may fall behind if they don’t push ahead with investment plans.”
In terms of those that applied for a grant to offset the cost of a herd-monitoring system, for example, they could miss out on improvements in fertility from a shorter calving interval and/or better first service to conception rates, and a reduction in the number of empty cow days.
Automated herd-monitoring systems can also improve milk yield because the early warning of potential health issues allows for earlier treatment and, therefore, cut sick days/milk losses. The tech can also reduce reliance on skilled visual heat detection, and save time and labour spent looking for signs of heat.
Sussex-based producer Phil Nash runs a 270-cow all-year-round calving herd, plus 230 followers, that’s currently averaging 11,500 litres. He missed out on grant funding in the previous two rounds of applications. “The first time we applied for funding to purchase a Lely Juno feed pusher, but the application was unsuccessful,” he says. “More recently we applied for a heat-detection system – something that could really make a difference to herd productivity, and were disappointed to receive a letter to say we’d failed again and missed the threshold by 0.3 points.
“It’s frustrating because they’ve taken away farm payments and ‘sold’ this idea of grant funding to producers as compensation for that. But the reality is that this funding, despite being extremely quick and easy to apply for, is not available to all. “There’s a finite pot of money and points to be accrued to secure a share of it. So I do feel misled because I wasn’t aware that a strategy, as such, was needed for my application to succeed.”
That said, Mr Nash has made the decision to go ahead and invest in a heat-detection system. “We identified a need and we know that we’ll see a return on investment. A short-term loan will cover the cost and I think we’ll have paid it back in a couple of years, due to improved fertility efficiency. But the grant would have taken some of the financial strain off our cash flow and the business.”
Herd submission rate is currently 65% and he’d like to see it at 70%. “That should be achievable with the new system and, at an estimated cost of £2 per open day, that 5% improvement will more than cover the cost of our investment after about 24 months.”
Another option for businesses wanting to invest in tech but avoid putting further strain on cash flows by borrowing is to access services and equipment via a monthly subscription. Some herd-monitoring systems, like SenseHub, offer all the hardware needed to monitor cows on a 24:7 basis. “This is covered by a single monthly charge with no hidden extras or fluctuations in price,” adds Mr Mitcham. “And it can be a way of dipping a toe in to see what difference the tech can make to your business, without the commitment of a considerable capital outlay.”