26 March 1999

TIGHTEN UP TO STAY AHEAD

It looks like winter may, at last, be over. For some, when turn-out comes, it will be the first time cows have been outside since last Julys monsoon conditions forced early housing.

Despite the optimism, there are dark clouds ahead for milk producers. Milk Marque appears to be failing to secure reasonable prices, while, in the longer term, Agenda 2000 agreements and an increase in milk quota across Europe are unlikely to improve prices.

The only option when the going gets even tougher is to tighten business management even further.

According to one consultant in this Update that means forgetting things that dont help improve profits; meaningless management measures.

His list of useless figures includes cow yield, concentrate fed, milk from forage, dairy costings and gross margins.

And any analysis of a business must include all its costs, he warns. Feed costs must include minerals, forage, additives and feeding out costs.

But there is potential to make better use of these figures. Comparing them with other producers in a similar situation can help identify areas for further cost-cutting.

Joining a discussion group will help find out how other producers are coping. But a key element is sharing information often regarded as confidential, but which can lead to gains on both sides. An open mind is a key way to prepare your business for the challenges that lie ahead.