Milk price volatility has been a feature of dairy farming since David Williams milked his very first cow so he has built a business that can cope with it.

Producing milk from a grass-based block calving herd milked once-a-day is a low-cost simple system which doesn’t need high capital expenditure and generates cash.

Even in 2016, when milk prices plummeted to an historical low, a positive cashflow situation was maintained thanks to the high margin low input approach, says David, who farms Clawdd Offa with his wife, Carol, daughter, Vicky, and sister-in-law Sue Pope.

“Because Carol and I struggled in the early days we are very focussed on cashflow, it’s what drives us.’’

Clawdd Offa, which sits on the outskirts of Northop in Flintshire, is a tenanted holding that David’s parents started farming in 1962.

With a mix of rented and owned land, the Williams’ are now farming 156 hectares (ha) on two blocks.

Measuring, monitoring and analysing informs decision making.

China is currently awash with milk but it will balance out towards the autumn

“Whether it is AI figures, conception rates, grass utilisation, you need to know where you are,’’ says David.

“We have a spreadsheet that measures cashflow and on that we have everything. When the milk price alters we alter the price on the spreadsheet and that affects cashflow.’’

When they did that after the last milk price drop the spreadsheet turned into “a sea of red’’.

In reaction, discretional spending was removed from the spreadsheet to return cashflow to a positive situation.

David is hopeful that the current milk price drops is temporary.

“All the indications are that it will come back towards the autumn. China is currently awash with milk but it will balance out towards the autumn.’’

It comes on the back of a challenging 12 months, resulting from last summer’s drought which hit the farm hard.

It has sandy soils that don’t retain moisture and which perform well in a wet year. “We love wet weather,’’ says David.

Changes have been introduced to make the farm more resilient to dry conditions, including a move away from a policy of all spring reseeds; a third of new leys will now be established in the autumn.

“We had plenty of silage left in the clamp last year so we took fields out for reseeding in May, too many in retrospect because the rain never came and it was September before we could graze them again,’’ David recalls.

All in all, an expensive year.

To “hedge our bets’’ against future droughts, David says he has been “more or less persuaded’’ to sow deep rooting herbal leys, although the numbers man in him does have reservations.

“One of the hardest things about growing herbal leys is that there aren’t any numbers to back it up.

“You’ve really got to strip out all the costs to make it work.’’

David, who is NFU Cymru Clwyd County Chairman, and Carol are the second generation to farm at Clawdd Offa, Vicky will be the third.

She had graduated from university with a degree in criminology but the lure of farming brought her back to Clawdd Offa where she now shares the milking and paperwork with David. Her two older brothers, Sion and Rhys, both work off-farm.

David is outnumbered by women on the farm.

Carol’s sister, Sue, joined as a member of staff in 2007. She takes charge of the AI and metri checking, and does 90% of the tractor work.

Carol has responsibility for calf rearing and grass measuring. “She is an exceptional manager of grass,’’ says David.

As David looks to the future, a quote from Warren Buffett, who is widely regarded as the most successful investor of all time, is one that inspires him: ‘A valuable business converts profit to cash. A poor business consumes cash to maintain profit’.

“A business must generate cash, if you have got cash you have got choices,’’ says David.

“For us that comes from running a simple system. As soon as you put a machine into a farming system it costs money, but grazing cows generates cash.’’