Keeping customers happy is Lothian dairy farmer’s main priority
THE portfolio of products at Bonaly Farm Dairy come with guaranteed provenance and pedigree quality, and a willingness by Donald Laird to go that extra Lothian mile - come rain, hail or shine. Erika Hay reports.
Cutting out the middle man has made dairying an enjoyable business for Donald Laird. Although now the Lothian farmer spends most of his time in the office, he is quick to admit he misses the day-to-day life of being a dairy farmer.
Donald milks 130 pedigree Holsteins at Murrays Farm in Pathhead, where all the milk is processed, bottled and sold through his dairy on the outskirts of Edinburgh, which handles up to 40,000 litres per day.
He is very modest about the successful business he runs today, but the story started 40 years ago when the Cauldcoats herd was kept on a farm of the same name just outside Edinburgh.
Some of the land was sold to build a new hospital and so he bought the 133-hectare (330-acre) unit he runs today on which he keeps all the cows and grows some grain. Joining this are another two farms within a 10-mile radius where he grows barley and wheat.
The combination of dairy and arable works well together with the cows kept in straw bedded courts instead of cubicles, some of the wheat is retained for their rations and the dung and slurry put back on the land saves Donald £50-£75 per hectare (£20-£30/acre) on fertiliser costs.
- 130 pedigree Holsteins milkers
- Herd averages 10,000 litres per cow
- 40,000 litres per day is processed
- 3,500 litres of milk comes from the herd, the rest is sourced from local farms
- 4.3 per cent butterfat and n 3.3 per cent protein
- £3 million investment
- £20-30/acre saved on fertiliser costs
- 20 lorries
- 50 staff
The herd averages more than 10,000 litres per cow at 4.3 per cent butterfat and 3.3 per cent protein, and has been selectively bred to produce high butterfat levels. This, says Donald, is crucial to the profitability of the business.
“When it comes to processing, the cream is where the money is made,” he says.
Well-known on the show circuit, Cauldcoats Holsteins have won the Highland Show several times and have been showing there for more than 50 years. Initially this was under Donald’s father, James, who won the championship three times in a row in the 1970s, and then under Donald and his herd manager Gavin Redpath.
Donald has invested heavily in the herd over the years, spending up to £20,000 on heifers with the right Canadian bloodlines, which complement his herd and keep the milk quality high without compromising yield.
Some of the best breeders have been Twilight Midnight Electrix and Boalcrest Councillor Camilla, bought from Canada. The most successful of the home-bred lines are Cauldcoats Colona and Cauldcoats Elizabeth, which go back to some of the original cows in the herd.
“Only about 50 per cent is down to genetics however, the rest is about feeding and caring for the cows,” says Donald.
He takes three cuts of silage and keeps the highest dry matter crop for the milking cows, which he buffer feeds with a combination of silage, whole-crop and a dairy blend all year round, despite the herd being at grass during the summer.
When the herd moved to Pathhead, Donald started supplying local Fairfield Dairy with his milk. He, along with another farmer, provided 4,000 litres per day for Fairfield which sold bottled milk and cream, and in 1998 when the dairy came up for sale, Donald jumped at the chance to buy it.
“I thought as I produced milk I may as well take it from the cows right through to the consumer.”
Three years later the chance came to buy Bonaly Farm Dairy, where he remains today. Built on the site of the old Bilston Glen Colliery, it is ideally situated to provide milk to shops, hotels and restaurants in Edinburgh and the local Lothians.
Although Bonaly was a concern when he bought it, he transferred some of the processing machinery from Fairfield and increased production to around 8,000 litres per day.
Over the last 10 years the business has continued to expand. With investment totalling aro-und £3 million including updating production lines from glass bottles and cartons to plastic, the dairy is now nearly at capacity, handling 40,000 litres of milk per day, six days per week.
Around 3,500 litres of milk comes from his own farm and the rest from local farms. Any shortage is made up by First Milk, but is still sourced locally.
“All the milk comes from a 10-mile radius and our customers like to know the provenance of their milk and dairy products and that they are supporting local farmers,” he says.
Whole, skimmed and semi-skimmed milk, plus double, whipping and single cream are all produced at the factory while yogurt, butter and cheese are bought in to supply customers. There is a huge customer base in the surrounding area with most of the milk going to local shops, hotels and restaurants.
Along with a tanker to collect the milk there are a further 20 lorries, which are on the go more or less 24 hours each day delivering the product. In fact, Donald now employs around 50 staff from production workers, office staff, lorry drivers plus two salesmen.
“Next to buying the milk, my biggest outgoing is wages.”
The price he pays his suppliers is in line with the big processors, but he pays a flat rate throughout the year. “The bonuses and penalties set by the big companies are made to look as though they are paying the farmer more money, but there is usually a catch and it is the processor who becomes more profitable. My customers are happy with a flat rate.
- The arable side of the business is based on growing winter wheat and malting barley
- This year Donald tried 16 hectares (40 acres) of a new low nitrogen variety of malting barley, Moonshine, which yielded 6.1t/ha (2.5t/acre) and sold at £205/t on the spot market
- 36ha (90 acres) of Makof, is also grown which is a high N variety that yielded 7.4/ha (3t/acre) and sold at £205 per tonne
- 36ha (90 acres) of spring malting barley Toucan is grown
- Another high N variety also yielded 7.4t/ha (3t/acre) but was sold on contract at £170/tonne
- 56ha (140 acres) of Alchemy winter wheat yielded 8.6t/ha (3.5t/acre). Most is used for the dairy herd and the remainder sold
Profit from cream
“The profit in processing milk is just one pence per litre, but cream is where money is to be made. This is why I want to keep the butterfat levels up on the herd - the more cream which can be skimmed off the milk, the more profitable the dairy becomes. While milk is around 50p per litre, cream is £2 per litre.”
Industry guidelines say whole milk must contain at least 3.5 per cent butterfat and semi-skimmed 1.5-1.8 per cent.
“The big processors skim all the cream off and add back in the minimum. We sell our whole milk the way it comes into the dairy and only skim to the required level for the semi-skimmed. We get lots of feedback from our customers saying our milk tastes so much better than supermarket milk.”
Customer feedback is one of the reasons Donald enjoys having the dairy so much. “We have built the business on providing good service and a quality product and that is how we have been able to expand, and because our customers are local, we save on costs such as diesel.”
There have been many exa-mples when locality has worked in their favour and customers and suppliers appreciated the closeness of their working relationships. Last winter Donald was still able to both collect milk and deliver milk despite more than a foot of snow in Edinburgh and the surrounding area.
Bonaly is the only surviving small dairy in Edinburgh and that does not surprise Donald. “When I first came here there were about six small dairies round the city but the red tape and bureaucracy has killed them off.”
He describes the record keeping and paperwork as excessive and expensive. The dairy is in a quality assurance scheme in order to provide milk to schools, but he has to pay £1,700 for this and someone comes and spends two days checking paperwork.
Another example of seemingly needless paperwork is for the Intervention Board. There has been no intervention for milk for years, but Donald still has to keep every tanker ticket for three years and two people come from the board once-a-year and randomly check the tanker tickets against the production on any one day.
“I have a number of data loggers which have to be used and records kept to prove the milk is never more than 5degC, yet the milk delivered to my doorstep customers can be in the sun all day while they are out at work.”
It is this insight into the other side of the business which most farmers do not see and Donald enjoys. “I can see the industry from both perspectives, but from my point of view, keeping my suppliers and customers happy is what matters most.”