Successful farmers have a strong business acumen and are continually developing their business, delegates at a dairy conference were told on Tuesday.

Speaking at CAFRE Greenmount, Wisconsin dairy farmer Lloyd Holterman gave some straight-talking advice to local farmers: “The fastest way to go out of business is to make no changes. The day you decide ‘this is good enough’ is the day you should sell.”

Holterman bought his farm in 1981 and Rosy-Lane Holsteins has since grown from an 80-cow unit to 1,100 cows at present.

Holterman has gradually passed on management of most areas of the farm to his staff and he now only looks after finances and herd genetics.

He suggested staff management would become more important for NI dairy farmers in the future. “I know your farms are smaller, but your industry is going to consolidate. This will be partly because of economics, and partly because of technology.”

Holterman advised NI farmers to monitor farm finances closely and use them as the basis of decision making: “The farm runs on money, not blue ribbons or accolades.”

He said replacement heifer costs were “low-hanging fruit” that can be exploited to increase financial margins.

A key topic also explored was how to reduce culling rates through better animal husbandry, disease control and genetics. This has a positive effect on margins due to lower mortality rates, reduced heifer-rearing costs and the higher yields that come from older cows.

Buying land

When asked if NI farmers should buy land at typical prices of £12,000/acre, Holterman said they should if the land is beside the farm and the bank allows it.

“You have inflation on your side, so 10 years from now it will look cheap,” he suggested.

Giving the example of the US, Holterman said less than 1.5% of land comes up for sale each year: “You only get a chance every 72 years.”

Costs per cow up £1,000 in 20 years

Total costs on NI dairy farms have increased from £615/cow in 2000 to £1,552/cow this year, CAFRE’s financial benchmarking figures indicate.

“We have added the guts of £1,000 to costs per cow, excluding family labour, over the past 20 years,” Jason McFerran from CAFRE told farmers at Greenmount. During his presentation, McFerran compared historic NI milk prices which showed the highest milk price year was 2013 when it averaged 31.34p/l. The lowest milk price year in his comparison was 2006 when it stood at 16.75p/l, although he pointed out that this is worth 24.02p/l in current prices when inflation is factored in.

Averages

Although milk price has fluctuated, McFerran said the five-year and 10-year averages both stood at around 25.5p/l.

The CAFRE adviser was asked if benchmarking results showed which type of dairying system was most profitable in NI.

“There are profitable businesses in every type of system,” McFerran responded, “You can do your best with the system that suits your farm if you look at your figures and make decisions based on that.”

Ignore consumers at our peril – Whelan

Consumers need to hear more positive stories about the dairy industry in NI, Dale Farm chief executive Nick Whelan has said.

“There is a real change in consumer behaviour. This is something that is right here, right now and we ignore this at our peril,” he said.

Speaking at the Greenmount conference, Whelan presented the findings of a UK-wide survey of 2,000 young people aged between 18 and 24 years old.

Despite hearing mostly negative stories about dairy, 84% of respondents still have a positive attitude towards to it.

Health and nutrition

The survey found that 44% of stories that respondents heard about dairy were positive, and these mainly related to health and nutrition. Most negative stories were about animal welfare and the environment.

“The big issue is that over 50% think that plant-based alternatives are better for the environment and 52% believe that animal farming in any form is cruel. We have a lot of work to do here,” the Dale Farm chief said.

However, the main factors that influence survey respondents when purchasing food are taste, health, price and natural. “All of these play to dairy’s strengths,” Whelan said.

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