15 September 1995

CHECK BUSINESS HEALTH WITH BPI

MILK producers must design a blueprint for their business to help it stay competitive.

This will be the advice of ADAS at this years Dairy Event. In its Blueprints for business document, it will stress the need for producers to assess the health of their businesses. To do this it advises use of its Business Performance Index (BPI).

This will highlight the competitive strength of a business relative to the rest of the industry. It uses a score of 0 to 100, with a high index reflecting a strong business that is competitive. A change in index from year-to-year would measure management success.

"Long-term strategies for a successful dairy business must be based on proper analysis of current performance," says ADAS head of dairy development, John Sumner.

He recognises the need to assess the worlds political and market changes, and the performance of competitors such as those in New Zealand and the US. Based on that analysis he warns that by the year 2000, dairy producers could face downward pressure on milk price.

"Emphasis must, therefore, be on reducing the unit costs of production and on devising a blueprint to take the business forward," says Mr Sumner.

That blueprint should include four key elements, namely milk marketing, quota management, diet specification, and genetics. Its success would depend on skilful integration of these elements into the business management plan.

Diet specifications should relate to milk price. "There is the chance to manipulate milk fat and protein content and to change calving pattern to maximise returns depending on contracts offered by milk buyers," he says.

For many producers the most viable option would be to maintain the current calving pattern and manipulate milk compositional quality to obtain the best milk price.

Being able to manipulate milk quality depended on genetics and diet.

For the diet he advised maximising use of grazed grass and forages and as for genetics, selecting and breeding high index cattle was the way forward.

"Yield of fat and protein with emphasis on yield of protein should continue to be the main selection criteria," he says.

The Blueprint report recognises the need to reduce reliance on overseas genetics and urges the industry to invest in its own young bull testing schemes.

&#8226 ADASs own Blueprint for high profit milk production has been used to manage a 120-cow herd at ADAS Bridgets, Martyr Worthy, Winchester, Hants. Year one of the project examined alternative husbandry techniques, and the second, and now third year are assessing the results (see table below) of applying this husbandry. &#42


ADAS Blueprint herd performance

April 94July 95March 96

(forecast)

Yield623489279358

Conc kg/cow212730163121

MOPF £/cow100016501838

Concs kg/l0.340.340.33

MOPF p/l16.0418.4819.65

"Emphasis must be on unit costs of production and on devising a blueprint to take the business forward" – John Sumner.