Sustainable businesses need time to grow

“Like many other businesses, dairy farming tends to be ‘task’ driven. In other words, decisions are driven by the need to complete the various tasks associated with the daily running of the farm.

“Although getting cows milked, fed and bred accurately and on time is still essential, knowledge about the business and how outside factors are impacting on it is becoming increasingly more important.

“Task driven decisions are about today, tomorrow and next week. They might stretch into the next lactation but seldom further. What is needed is decision making based on lifetime profitability and performance, which means a minimum five year planning horizon.”

Mr Jones says farmers have more data available to them than ever, and it is now being provided in a way that allows long term planning. While many traditional data sources like margin over feed and accounts only look at a year in isolation, information on lifetime yields, for example, is more readily available.

Longer approachs

“Managing cows is not a short term business,” he says.

“Just think about a decision to breed a cow today. Assuming you get a heifer calf, she will calve into the herd around three years from now on average and will still be milking in 2017. That is why it’s important to look to the longer term and use meaningful data on how a cow will contribute over her life.”

Mr Jones says models on lifetime performance and profitability should assess the total contribution from a cow, taking into account rearing costs, milk production, feed rate and culling rate.

“It allows an objective assessment of how the herd is performing and identifies the areas where management improvements will improve financial performance and provide more stability, essential in a fast moving global economy.”

Once a long term view has been taken, Mr Jones says it is then important to focus on the tasks. He suggests the important difference is a change in emphasis, arguing that task management must follow a long-term plan.

“You need to know where you are going and then manage the tasks to get you there, rather than focusing on tasks and hoping you will end up in the right place.”

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