How to strike Gold in the dairy industry

About 600 agriculturalists, including a coach party from Northern Ireland, turned up at Brompton, near Northallerton, to find out how Geoff Spence and his team had become last year's winners of the Gold Cup awarded annually by the Royal Association of British Dairy Farmers and NMR (National Milk Records). RABDF organised the open day.

In 1957, Geoff Spence's father, Tom, moved onto their current farm with 30 cows to put on to 90 acres and got 100 gallons a day – a good figure for the time. He understood breeding and by 1999, he and his son had built the herd up to 140-150 milkers averaging 7,000 litres a year each on 210 acres.

Business adviser Paul Dennison, from Strutt & Parker, who were called on for help at that time, told the visitors: "They were at a bit of a crossroads. The milk price had dropped to around 19p a litre, after getting to 25p in 1996. They had to get out or get on."

Geoff Spence had always had a vision of the kind of 'kennels' cows wanted and he set about building them, with sand bedding and assisted ventilation. In 2001, the animals moved in and productivity went up 30 per cent.

Before buying a new milking parlour, in 2003, Mr Spence spent months milking in other people's, to decide what he wanted. By this time, the milk price was down near 17p. But the farm recovery had started. The herd grew 10 per cent a year and on Wednesday morning this week, the milkers gave 34.9 litres each.

To get that from 400 cows on 210 acres means buying in feed at a cost which is now nearly 11p a litre, said Mr Dennison. That was a startling figure to most dairymen but it was included in total variable costs of 14.5p, so the profit margin – on milk for Asda, which gets a 1.25p premium on the Arla standard price – was on its way to 8p.

One area of saving was in herd health, which the farm's vets, Kebir House of Northallerton, can monitor through computer-generated records of every cow's activity and productivity every day.

Mark Glover of Kebir House said most dairy farmers made an average loss of 4p a litre through poor fertility. It was that money which paid for "investment in health" on the Spence farm. The returns came in animals maturing earlier, conceiving more easily and requiring less recovery time between calves.

Mr Glover said: "Output last year included 3.8 million litres of milk – 9,800 per cow – and 80 new-calved cows, 39 maiden heifers, 12 breeding stock, 37 beef heifer calves and 130-odd beef bull calves sold to other farmers."

Feed advisers KW Alternatives said one of Mr Spence's secrets was sugar-beet pulp in quantity.

The farm's methods amount to more or less indoor farming, of the kind contemplated in proposals for 'superdairies' in Lincolnshire, where big arable farms are crying out for manure.

Nobody in Yorkshire is yet proposing anything so extraordinary and Mr Spence said he had enough on his hands.

But he was not against somebody else trying it.