FARM REPORT ▶▶▶
match made in heaven. We have the facilities and a story to tell; they know cheese and the market.” The couple owns 40% of the company, and Baruther Urstromtal owns 20%. “They have to use our milk and pay a few cents on top of what Müller pays for it. It will really take off in September. This year, they plan on purchasing at least 200,000kg of milk.” Schmitt does not say much about the future. However, the smile on his face after joking about “marketing all milk as cheese in 2025” says it all.
In the 2×14 side- by-side milking parlour, everything is done at a re- laxed pace. One person milks and a second milker assists, fetching the cows and cleaning.
1,000 tonnes of maize and 1,000t of grass silage, with € 60,000 worth of financial damages as a result. This year, the grass harvest is excellent. If the maize gets some rain in the coming weeks, we can start building supplies again, Other- wise, we have to buy extra, but less than in 2019.” The farm has barely needed financing with borrowed capital. Half the land is owned, the other half leased. “We have ac- quired over 10ha last year. We could have done that with our current account, but because of the low interest rates of just over 1%, we decided to have it financed to keep room for in- vestment.” The operation’s net result varies from -€ 50,000 to +€ 250,000 per year.
Cheese The farmer started developing a new branch in the business in 2018: cheese. “We are located about 50km from the Potzdamer Platz in the centre of Berlin, a city with 3.5 mil- lion “very green” inhabitants. We produce around 3.5 million kg of milk with a story. Local production, cows that pasture day and night at photogenic locations; we have a reception area with room for 100 people that also functions as a class- room, and we have GMO-free A2A2 milk. So it’s a logical step, right?” Schmitt invested € 100,000 in equipment and hired an em- ployee for the cheese production and marketing. “I do not have time to be at every market.” It eventually became a costly venture. “Only you decide where you want to burn your money. The lady I hired turned out to be less capable than I thought.” That is why he recently changed course, by establishing a private company (Ltd.) together with a Belgian-English cou- ple. They have ample experience in cheese production and direct sales to individuals in Berlin. “They know the product and what sells and they are good at it. They were looking for a supplier with a story and the necessary volume; it is a
10 ▶DAIRY GLOBAL | Volume 7, No. 4, 2020
Acquisition A contributing factor in the cheese debacle of 2019 was that the farm suddenly needed more attention. A neighbouring farm went bankrupt and there was a lot of pressure to acquire it, against favourable conditions. The farm – with 400 Hol- stein cows on 1,000ha, half of which was commercial arable farming – was in demand and the neighbourhood feared the arrival of rich Bavarian or Dutch dairy farmers. “That would disrupt the balance in this region and increase lease prices.” Around the time of the acquisition, the Holsteins produced just below 6,500kg/cow/year. “Holsteins should easily be able to produce at least 8,000kg.” A year after the acquisition, the daily production of the Holsteins has increased to just over 10,000kg/cow/year. Despite the excellent production, Schmitt wants to have only Jerseys at this location in four years’ time. To reach that goal, he buys heifers, but not from his own farm. “Baruther Ur- strom tal structurally sells over 150 heifers per year, at about € 1,600 each. We can buy them for € 1,200 elsewhere. That saves us € 60,000 per year.” Schmitt produces not only heifers. “We have about 200 young bulls each year. Several dozen of them leave the farm as breeding bulls. We sell some 150 bulls per year to small indi- vidual landowners that fatten them. They don’t yield much in euros, but we do not have to have them slaughtered after birth. That only happens to around 20 young bulls per year.” Now that he has more land, he is considering fattening the bulls himself. Improving Holstein production took a lot of time and even more guidance was needed for the employees. “The atmos- phere between them was tense during and after the acquisi- tion. I did not lay anyone off, but none of the 15 employees we started with are left now. They probably could not handle the new way of working.” It may seem that Schmitt has too much of a dominant charac- ter, but the opposite is true. “I want people who can solve problems but are not afraid to share their struggles either. Everyone makes mistakes, just do not hesitate to mention them. I would rather see an employee who doubts whether or not he milked a penicillin cow and tells me so, than one who chooses to remain silent, hopes for the best and I am left with an enormous bill.”
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