Dairy consultant Fiona Smith has spent many years helping farmers across Australia navigate their business, assess profitability and deal with issues including succession and scenario planning.
She was a guest speaker at this year’s ADC conference.
Fiona said while there is always a lot of variability in the way farmers manage their own business, she has noticed some consistent themes amongst the top 25 per cent of farmers.
“A good farmer chooses and manages a system that suits their physical and financial resources and they nail it. They work in their business, manage all aspects and are usually a couple of weeks ahead of the pack ‒ they aren’t farming from a seat on their veranda,” Fiona said.
She said when it came to making early decisions, it didn’t necessarily mean acting out the decision a couple of weeks earlier then everyone else, but rather planning and setting the wheels in motion.
“They also have good decision making skills and focus on productivity and terms of trade and if you are not prepared to put the work in profitability will suffer,” Fiona said.
She said interestingly profitability didn’t necessarily depend on how many cows you milked or how much homegrown feed you grew, it all came back to the chosen system and doing it well.
“Nailing the sweet spots with stocking rate and kg/ms per kilogram liveweight, looking at labour efficiency and understanding productivity, managing risk effectively and utilising infrastructure and technology are all major components.
“Learning from each season, the good and bad is equally as important.”
She said it was also important to remember to cautiously compare yourself to your neighbours.
“I always caution farmers to be careful making comparisons ‒ every farm is different and every system is different.”
Other points include:
- use trusted advisors – consultants, accountants, lawyers, discussion groups and farmers.
- utilise debt effectively – never let debt limit operational discussions, it can be used to leverage business.
- invest and develop in good communication skills.
- utilise data effectively – collars, herd testing, genomic testing.
- continue to spend money on repairs, maintenance, fertiliser and pasture renovation to ensure continued productivity and profitability.
“Dairy farming has always been complex by nature but over the years it has become even more so from a paperwork and red tape perspective.”
She said for the industry to survive it must do better when it comes to a work/life balance so young people are attracted to the industry in the future.
“We need to be realistic as an industry and maybe growth isn’t always the answer, maybe we are stable where we are.”
Fiona was raised on a dairy farm in south-western Victoria and currently runs a beef operation with her husband.
She is actively involved in the Dairy Farm Monitor Project and was also involved in recent productivity and competitiveness work.