We analysed their financial data over several seasons and talked to them about how they achieve low-cost systems on a regular basis.
As a dairy farmer myself I found this incredibly valuable and it certainly has challenged my thinking for our own business.
All these farmers operate at or below $3/kg milksolids (MS) farm working expenses while still achieving good levels of milk production.
I have highlighted what I believe to be four key points for success that run across their personal circumstances and farm systems.
These farmers:
• Farm for profit first. By doing this they can achieve both their business and personal goals. This is a core philosophy in all they do. Each of these farmers evaluates the cost and return of the decisions they make. It has become a natural part of their business. It hasn’t necessarily come naturally – for some it has been a learned skill. This has resulted in costs that are generally low across all spending categories, based on DairyBase analysis.
• Know that profit is achieved by reaching good production levels at low cost. It’s not about one or the other. They understand the inputs that give them their return and don’t get caught up in product name or hype. Identifying if they truly need something before buying is common, so they might test animals or plants more frequently. This means they get the right application of the right input at the right time at the right price.
• Drive for pasture grown and harvested that uses the natural strengths of their farm. All these farmers are non-irrigated and live in drought-prone areas so pasture growth is essential. They are harvesting 10-30% more pasture than the benchmark for their district by focusing on growing lots of feed and getting the cows to harvest it directly. This means pasture management is key, with simple, clear guidelines for achieving pasture covers and body condition score throughout the season. Some form of spring rotation planner is used every spring and monitored to make the most of the season. Communicating this to staff is critical. Simple clear systems across the board assist all staff to know what the targets are and the impacts of achieving them.
• Haven’t been swayed into trying to produce marginal milk. These high-profit farmers focus on their core business – growing feed onfarm and converting it to milk. They didn’t change the amount of supplement bought in response to payout. This has also meant little capital or infrastructure investment, low associated repairs and maintenance, and low depreciation.
These actions might sound simple, but often require a mind-set change. The application of them will take time and determination and will challenge most farmers, including myself.
For presentations from the DairyNZ Farmers’ Forum visit dairynz.co.nz/farmersforum.
• Wilma Foster is DairyNZ senior consulting officer for Western Bay of Plenty.
