When Gavin Davies became the farm manager at Stowell Farms, one of his first priorities was to revitalise the dairy operation. New technology has played a leading role in achieving his aims.
“It was quickly apparent that our dairy business had been winding down, and its equipment was old and tired,” says Gavin. “It got my grey matter going in terms of thinking about how we could secure it for the future.”
As well as planning to build his dairy herd and restart operations on another part of the estate, Gavin also wanted to install an anaerobic digestion plant, which converts waste products into electricity and heat. It would also contribute to improving the farm’s efficiency and drive down its costs.
But with the family-owned farm being run by a trust, Gavin’s plans needed to be approved by the board of trustees. He put together a detailed feasibility study, laying out the business case for a 500-strong herd and a 0.5MW anaerobic digestion plant.
“The board gave its approval, but wanted the business to have its own funding and stand on its own two feet,” says Gavin.
Delivering the financing
Gavin’s business manager at Barclays introduced him to Karl McConville, our National Director for Landed Estates. Karl went through the business proposal with Gavin and they came up with a financial plan together, including details on drawdown of the potential loan, and managing cashflow through the period.
Our Agricultural Team was able to provide a loan for the anaerobic digestion plant, a new dairy unit and equipment, additional cows for the herd and to build a farmhouse for the herd manager to live in.
Karl was also able to play a key role in supporting Gavin as he developed the business.
“In the early stages, Karl introduced me to some of his other clients so we could tap into their knowledge and see how they had done similar projects,” says Gavin.
“On top of that, Karl is an ex-dairy farm manager and consultant, and he was very interested in the project personally. He’s very knowledgeable and was certainly someone whose opinion I valued throughout the project.”
Building the business
The new dairy operation was a good business move. The herd is now at its capacity of 520, the cows are being milked three times a day and the business is much more streamlined in general, with all performance indicators having seen an improvement.
The anaerobic digestion unit has been a notable success, with figures for 2017/18 showing it operating at 99% capacity.
All the cow slurry produced on-site, as well as farm silage and waste cow feed, is fed into the plant. The dairy uses less than 20% of the electricity it produces, so there’s a big surplus to sell to the National Grid as well.
“It’s a very financially successful business,” says Gavin.
Looking to the future
For now, the business is in a period of consolidation as it looks to reap the rewards of its successful investments. But there are longer-term objectives to strengthen it further.
“One of the things we’re looking at is how we can reduce our production costs,” says Gavin. “We know there will come a time when the milk price will fall and it will become more challenging, so we’re looking at other things we can do to help secure our business.”
They’re considering whether there’s a way to increase the size of the herd, for example, and Gavin is keen to explore new ideas that could help him to use more of the heat that the anaerobic digestion plant produces.
“There’s certainly an appetite to grow the operation further,” he says. “It’s just a case of identifying what the best option is going to be.”