It seems to me that the dairy industry is coming under increasing pressure financially. The returns from dairy products have stagnated while costs have increased leaving smaller margins to be shared between the farm owner and management staff. Some competent contract milkers and sharemilkers are questioning the viability of remaining in the industry.
IMO, it is unrealistic to ask farm owners to pass on a bigger share of the income to meet the requirements of on farm management. So what is the answer?
There is little gain to be made by cutting costs further as most farms have exhausted the opportunities in that area. There also can be little expectation of increased production without increased inputs – an unpalatable option in the present climate.
I suggest that there is an untapped opportunity on most NZ dairy farms to become more profitable by farming smarter. The NZ dairy industry is supported by some of the world’s most innovative scientists who are providing farmers with a raft of opportunities to farm more efficiently. If we could grow more and better quality pasture, increase the yields of crops, match crops to the nutritive requirements of lactating cows through the seasons and have the tools and knowledge to manage and utilise all this, profitability will increase.
I have seen this happen on a number of Southland dairy farms. As owners, contract milkers and sharemilkers have grasped these opportunities, understood the principles behind what they do, grow more quality feed and learn how to use the budgeting tools etc that I offer, things generally fall into place. Typically MS production increases and unit cost of production drops.
My decision to start blogging is an attempt to outline what is happening on the farms I visit – the issues those farmers are facing, their short term management strategies, medium term planning and the benchmarks they are aiming for. I hope you will find it useful.