SFP Euros contribute to big dairy expansion

27/03/07

Cornish dairy farmers, M J Grills & Sons, are aiming to be long-term players in the milk sector. Currently advancing from 250 cows to 300, the family partnership at Trelay, Marhamchurch, has embarked on a three-year development programme which will lift eventual milking numbers to 400.

"You could say that we're fairly heavily committed to dairying," said Anthony Grills, the son in the partnership which also includes wife, Abigail, and parents, Michael and Angela.

"My grandfather bought Trelay 50 years ago, giving us a sound foundation on which to create what we have today. As a result, we now own 378 acres and rent a further 248, land from which we produce close to 3m litres of milk a year. Our goal, however, is to use that acreage to support 400 high yielding cows within a business that is structured to deliver a profitable future in dairying."

Covering the three-year development of additional cow accommodation and the cost of acquiring extra cows has required careful planning, good use of Single Farm Payment (SFP) euro income and a close relationship with his Clydesdale Bank Agribusiness Partner.

"We took our first SFP in sterling but switched to euros in 2006, using the income to cover repayments on a euro-based loan," said Anthony. "We'd talked to a lot of people about the idea of taking SFP in euros but didn't really appreciate the potential of what was available until we sat down with our Agribusiness Partner and went through the figures. He understood our dairy vision and was fully in tune with our development, factors which definitely helped to create the right package.

"When we found ourselves looking at a euro base rate of 3.75% in May/June 2006 for a loan timed to run until 2013, our conclusion was that we needed to have a crack at it. Coupled with the use of a fixed interest rate for the loan in question, it really was too good a deal to miss."