South African dairy farmers are not exempt when it comes to feeling the pinch from constrained milk prices but for one family operation outside Pretoria controlling all the production stages is proving beneficial.
Dairying is a tough sector to work in, but in South Africa it can be a profitable business, if all the input costs can be managed correctly. Situated near Magaliesburg outside Pretoria, Bosparadys Farm is run by the well-respected Khourie family consisting of William and his sons Joe, Anthony and Pieter, who all take charge of the various different enterprises. The Khourie family employs 250 staff, which work in all the sectors on the farm. The dairy factory operates on 2 shifts almost 24 hours per day and a more relaxed timetable at the weekend.
Dairying is the dominant enterprise accounting for 80% of the total farm income but the Khourie’s also farm with sheep, pigs, hens, goats and game. The Khourie family have farmed there for over 20 years and have built up a profitable business with an annual turnover of just under R200m (€14 m). The family own a total of 2,000 hectares and rent a further 500 hectares from a local landowner. Around 400 hectares of this land is planted out in grasses and 1,100 hectares is used to produce maize silage averaging 14 tonnes per hectare. The remainder is natural land used for game farming. The dairy cows are kept outdoors in corals and are fed according to yield with the majority being fed to produce 30 litres per day,
Cows are fed 38.9kg of a Total Mixed Ration per day using the farm’s feed mixers. The ration contains:
This ration costs R69.34 (€4.83) per cow per day and equates to a feed cost per litre of R2.72 (€0.19).
Anthony Khourie is in charge of feed planning and production, and runs a stable feed bank that provides the fodder flow for continuous dairy production. Joe manages the dairy herd and the heifer herd while Pieter is the overall marketing manager for the farm.
Bosparadys Farm milks 800 cows with an average yield of 30 litres per cow per day but they have a high yielding batch of 250 cows producing 40 litres per day. The high yielders are milked 3 times per day in the 14/28 herringbone milking parlour while the rest are milked twice per day. In terms of other dairy livestock, there are 200 dry cows, 150 in calf heifers aged up to 2 years old and 420 young heifers from birth to 15 months old. The older cows are inseminated by Dutch sires via AI and the younger heifers all run with groups of young Holstein bulls. The farm currently averages milk quality of 3.3% Protein and 3.6% Butterfat, which is quite important as they bottle their own milk and produce yoghurt, cheese and buttermilk on site as well.
In total, the farm’s daily production of 24,000 litres is used in their on-site factory together with an additional 26,000 litres that are bought in each day from a local supply network of 12 other dairy farmers. Of the total output, liquid bottled milk accounts for 85% while 12% is made into buttermilk and 3% for yoghurts and cheese.
The business operates its own fleet of delivery trucks that deliver the milk to a network of 200 shops and supermarkets up to a 150kms radius of the home farm.
Milk is most popular with customers when sold in two litre containers which sell in the shops for around R25 (€1.74). The farmer, also being the processor, receives R10 (€0.70) per litre for the milk and his cost of production is R4 (€0.28) per litre.
Two decades ago there were around 50,000 dairy farmers in South Africa but today there are only 1,600 left. In a country where no subsidy is paid to farmers for producing milk they are under a growing strain to make a profit while trying to keep costs to a minimum. The Khourie family have indeed found a system that works well for them while supplying the local demand for fresh milk and milk products. While fresh milk consumption in Africa is the lowest in the world at around 36 kg per capita per annum, compared to 200 kg in Europe, there is currently a growing trend to drink flavoured milks and butter milk. Expansion at the Khourie farm, however, is on hold as there are some long-term land claims on the family’s land. Any progress in trying to fight the claims is very slow and while ongoing, the Khouries are not permitted to build any new sheds to expand. And there is no point in them investing in a new parlour or any other substantial investment in case any land claims were successful.