At a recent dairy discussion group Comparable Farm Profit (CFP) feedback meeting, several common issues where highlighted by the 16 businesses involved when they were setting their targets for 2018/19.
Across the board 2017/18 has seen their overall margins improve on the previous year, both with better control of their costs but also the obvious improvement in milk price.
Labour costs formed a significant part of the discussion, the shortage of good labour is becoming a major issue on many farms, not just dairy, and the group felt this was only likely to get worse. With targets being set for the next 12 months, how to tackle the issues included:
• Reviewing work routines to maximise efficiency.
• Discussing more flexible working conditions with staff to ensure they were able to fulfil and be involved with family life at home.
• Ensure staff have good quality facilities for break and lunchtimes – microwave, seating, tables, kettle, clean cups, radio etc.
• Have a regular team meeting off farm so any issues can be raised and addressed – including a breakfast meeting in a local café or fish and chip lunch.
• Review where capital investment is needed to reduce work load or where a heavy labour requirement is needed – milking times, does the tractor start in cold weather, outdated facilities with poor cow flow.
Alongside labour, feed costs were looked at, especially the need to recoup additional cost that had occurred through the spring due to the unseasonal late turnout. This also led onto fertiliser and re-seeding. A number of farms highlighted the need to understand what dry matter in grass yield return they had gained from fertiliser applied. On a few farms the group felt investment in re-seeding needed to be increased to ensure they maximised the impact of the spending on variable costs.
There are many costs that all farms will incur during normal farming operations, the benefit of CFP’s and budgeting is to highlight the strengths and weaknesses within a business, highlighting where improvements can be made, in a constructive and supportive way.
With the challenges above affecting many farms, rising feed costs and what is looking likely to be a very dry summer, can we help you develop a plan to minimise this risk? Contact your local FCG office or Andy at firstname.lastname@example.org