Milk producers are being offered levy-funded workshops to help them ask and answer fundamental questions about their businesses.
Under the banner Decisions4Dairy, AHDB Dairy aims to help farmers make the right decisions about the future.
The events include support and advice from consultancy firms, farming charities and banks.
There are two types of workshop:
- Decisions4Dairy – regionally focused on broad subjects such as A and B pricing, constituents and cost structure
- “What if” – individually tailored advice stemming from actual individual farm costs of production.
Advice so far under the programme has included consultancy from Savills, Andersons and The Dairy Group. Farmers are encouraged to assess cost of production prior to meetings in order to get full value from the sessions.
The AHDB-led programme follows the March Dairy Allied Industries Forum which heard about half of British dairy farms were “financially vulnerable” in December.
The “What if” workshops will be take producers through five areas of business planning:
- Greater cost understanding and management
- Better returns from inputs
- Effects of reducing inputs, litres or cows
- Improved feed use
- Producing the right milk for your contract
The level of business scrutiny will be loosely based on the 12 questions business consultant William Neville from Savills came up with for dairy farmers to ask about the future of their businesses.
- Do you have the mindset to take control of your own destiny? Or are you a hopeless victim of circumstance?
- Is dairy farming right for you and your family? Inheritance plans? Non-farming family members?
- What will you need to invest in your facilities in the next 10 years? How will you fund it and justify it?
- Do you really know your cost of production?
- What is the realistic future milk price? Evidence v hope?
- Have you worked out whether you are producing what your milk purchaser really wants – for example, are you maximising your return under your milk contract?
- What are you really paying yourself an hour? What can you afford to pay yourself and remain competitive? Would you be better off paying someone else and trying to add value to other parts of the business? What are your other skills? How much could you earn off farm part-time or full-time?
- Might there be a day when you will find yourself stranded without a milk purchaser at all?
- Are you buying all your inputs at the best prices and when did you last check alternatives?
- Are you ruthlessly and honestly benchmarking your performance and constantly trying to identify ways to incrementally improve performance?
- Do you have your eyes open for niche opportunities, even if they start small?
- Do you have the right skills for the technologically and market-driven global dairy industry of the future?
Rachael Chamberlayne, technical manager at AHDB Dairy, said the “What if” discussions would explore short and mid-term business changes, such as selling stock or testing the potential of cereal or beef enterprises.
“Early meetings have already been successful,” she told Farmers Weekly.
“One farmer went home and sold some beef stock that were not performing for the business.
“It’s about this type of immediate and short-term impact but also getting the right message for those producers who will see better times round the corner.
“Specialist consultants work with farmers on the day to explore their businesses using actual cost of production collated by the farmer prior to the workshop as a base point.”
An online business “decision tree” is being developed to steer dairy units through increasingly volatile times by informing short- and longer-term fundamental decisions.
Scottish farmers can visit the Scottish Dairy Hub website, an AHDB- and Scottish government-funded service connecting sources of advice to strengthen technical and structural elements of businesses.