A dairy diverse approach

The secret has been continually "thinking outside the square" by adding value to all commodities the farm turns off, capitalising on all resources, targeting niche markets and innovative management.

The Perrys have done this by supplying A2 milk, rearing Wagyu calves, selling export heifers, leasing cows to build numbers and combining farm infrastructure improvements with natural resource management.

The couple run two Holstein herds at "Perry View", Bellingen, and a second neighbouring farm, both under a pasture-based system, operating a total of 110 hectares.

Their herd of 150 A2 Holsteins produces 1.2 million litres of milk a year and the 140-head A1 herd produces 1.1m litres, all sent to Lismore-based dairy co-operative Norco.

Norco has six suppliers for its labelled A2 product.

A2 milk is naturally rich in the A2 type of beta-casein protein and does not contain the A1 form, which means often people with allergies to milk can drink A2.

The Perrys, who bought into dairying just after the industry was deregulated in 2000, moved into A2 supply three years ago, chasing the four to five cents a litre premium.

"Because we had the two farms, the opportunity was there to run two herds alongside each other and is a big advantage because it means you have an outlet for your A1cows as you build A2 numbers," Mr Perry said.

The A2 herd, which averages 30L a day milk production in peak times, is managed exactly the same way, primarily off pasture with conserved ryegrass supplementation in winter and grain rations given in the dairy.

The hardest part, Mr Perry said, had been sourcing quality A2 cows.

"We'd DNA test other herds and buy from other producers where we could," he said.

All the couple's heifers under two years of age are now A2, with 30 per cent of total cow numbers still leased, paid for with home-reared Wagyu-cross vealers.

Both a Wagyu and an A2 Holstein bull are run with the A1 herd and the A2 herd is artificially inseminated.

All the Perrys' calves are reared on-farm, with A2 heifers going as replacements while the longer term aim being to turn both herds over to A2 supply.

A1 heifers not required are sold to the lucrative export market and Wagyu-cross calves, grown to 100 kilograms, are sold direct to a Northern Tablelands feedlot.

The Perrys set up 25 purpose-built calf hutches last July, where calves are kept for their first three weeks and hand fed surplus milk from the dairy.

They then go onto a mobile feeder until they are 10 weeks of age and are shifted onto grain and pasture.

"It allows us both control of our replacement milkers and to value-add our cell count milk," Mr Perry said.

"We are using a resource we already have to add value to our calves."

The hutches are designed to be quickly and easily moved to neighbouring high country in floods, which in recent years have been one of the biggest challenges.

This time last year, the Perrys were hit with two floods where their farms went completely under water.

"Floods are not new but the force behind last season's did enormous damage, washing away an acre of land and wiping out all our pastures, plus destroying plenty of fencing," Mr Perry said.

They had to feed their herds for three months, and ongoing rain until the middle of July forced replanting of winter ryegrass.

Combined with grain prices that have risen 25pc in the past year and the downward trend of farmgate prices on the back of $1-a-litre supermarket milk, the tough seasons have put coastal milk production under enormous pressure.

"We're high-debt, having entirely bought into dairying. If it weren't for value-adding we wouldn't be here," Mr Perry said.

"The A2 premium has given us a buffer zone and our move into A2 is being funded by value-adding calves and selling heifers into the solid export market."