Right organisational structure takes business forward

Putting the right organisational structure in place will be crucial to James Bowditch’s next six-year business plan. Ian Ashbridge reports

James Bowditch has now reached year five of his six-year plan for Bowditch Family Farms, which will see him take on more of the overall direction of the family’s dairy, beef, sheep and arable enterprises.

Part of that plan was for the three dairy herds – Laverstock Farm, Cooper Dean Estate and North Bowood Farm – to increase yields to 10,000 litres a year. Under the new contract with Arla, which makes Bowditch Farms the furthest west of Arla’s London milkfield, all are returning an improved margin.

“We’re 2p/litre better off than we were last year. But the one thing we absolutely cannot afford to do with this business is stand still. There is not enough room in that margin for us to re-invest, and some parts of the dairy business, particularly Laverstock Farm, have suffered from underinvestment in recent years.”

Fit for purpose

Mr Bowditch knows that if he is to take the business forward into his next six-year plan, the organisational structure must be fit for purpose. “We are in the process of evaluating our options to ensure we make the right decisions that will take us forward.”

As things stand, each dairy unit is supported by one dedicated herdsman, with casual labour employed for relief milking and holiday cover. But a shortage of relief milkers means Mr Bowditch’s time is increasingly occupied with providing such cover himself and the present structure requires too much supervision, distracting him from running other parts of the business. “We have to evaluate the structure of three, one-man dairies.”

Mr Bowditch needs to find an effective way to manage the business as a whole, something that is made more difficult when the dairies require so much of his working day. Options such as profit-sharing or share-farming arrangements would allow Mr Bowditch to step back and concentrate on the direction of the overall family business.

Shortage

The effects of a shortage of relief milkers are being seen already. As well as leaving Mr Bowditch with just two days off each month, the cows are unsettled by a disrupted rhythm and affected yields. “We’re also missing a lot of bulling heifers because there’s not enough consistency, and that costs us £75 a time.”

It is also interfering with calving index and threatens the level milk profile Mr Bowditch is striving for to meet Arla’s expectations. Coupled with this, the effects of last summer’s heatwave are still being felt. “The high temperatures really made cows uncomfortable and reduced conception rates, pushing the calving index back by several weeks. I wouldn’t be surprised to see a big flush of milk from the south west this spring.”

All three dairy herds have recently completed their first farm assurance inspection with milk buyer Arla, since Mr Bowditch switched from Milk Link last year.

Under the national Dairy Farm Assured Scheme, the inspection affords the same accreditation and there are no more regulations, but Mr Bowditch believes the whole process took the equivalent of three days of management time to complete.

Increase profitability

“There are opportunities to increase profitability in dairying but we have to keep things moving forward. Over the lifetime of the single farm payment we will receive about £0.5m. I cannot get to 2012 and find I just used that money to prop up cashflows due to an insufficient milk price. I have to make investments that will pay us back in the future.”

Among recent investments is a new £21,500 Keenan FT140 feeder, although Mr Bowditch is disappointed the old one failed to last the four years he had hoped for. “But this machine does a much better job of chopping the straw and mixing it into the ration.”

It also means the smaller herd at North Bowood Farm can be fed in one pass, saving more precious time. “And avoiding split loads means there is less margin for error.”

After one year, Mr Bowditch’s bull-beef operation through Blade Farming South West has performed well enough to allow them to move on to the premium contract. Bulls are returning 280kg after slaughter and the new pricing structure means a price increase of 10p/kg to 200p/kg deadweight. Mr Bowditch has 14 bulls due for slaughter this week. “We’ve proved ourselves, which is very satisfying.”

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