WestVic Dairy News - July 2010 Edition
Are you the Master Chef in managing your Dairy System?
By Helen Chenoweth and Michele Ryan, DPI Warrnambool
Recently two groups of southwest Victorian dairy farmers explored aspects of their dairy business as part of the Changing Rooms project. Some surprising discussions were had that had a lot in common with successful kitchen baking!
Topics focussed on three main areas:
- How to identify your cost of production and use the information to better manage the resources you have
- Measuring and managing risk using John Mulvaney’s tower concept and other tools such as SWOT analyses
- Examining the current dairy system and answering the ultimate question: Have I got the big settings right for our business and family goals?
They explored a series of questions that tied in many aspects of dairy business management including what is a dairy system, how do you know you have the right one for you and if the one you have isn’t meeting your needs how do you change it?
The groups met four times over eight months. The two hour sessions were run around the host farmer’s kitchen table and discussion facilitated by Warrnambool DPI Dairy Extension Officer’s Helen Chenoweth and Michele Ryan. The final session focussed on “understanding your dairy system” and some robust discussion occurred as the farmers grappled with this often confusing concept.
What is a dairy system?
The farmers defined a dairy farm system as being…
“Like a recipe to get a defined outcome. It’s a bit like cooking where there are many ways to make a cake. Just as you don’t have one recipe that’s right for all cakes, each farmer needs to work out what combination of elements are right for their business to achieve their financial and personal goals”.
So, thinking along the lines of the Master Chef TV series where all the “elements” have to come together in the correct order for the dish to be a success, the farmers enthusiastically identified elements that need to be selected and managed to construct the dairy farm system for them.
They did not just consider the “cake’s appearance” (superficial measures that may look impressive for those people outside the business such as high per cow production or bright new machinery), but looked for ingredients that will provide long-term nutrition (income and increasing net worth) as well as excellent taste and satisfaction (the lifestyle benefits of being your own boss, no peak hour traffic snarls and spending time with the kids).
The exercise resulted in clearer understandings around dairy farm systems. They were:
- There were as many successful farm systems as farmers in the room!
- The definition of success needs to be broadened to include both personal goals and finance performance.
- The perception was challenged that there is only one successful dairy farm system that the industry should be aiming towards. One size doesn’t fit all and bigger or more intensive systems will not always be better. In the same way, less intensive operations still have a place in the dairy business landscape.
- Each system has strengths and weaknesses and all aspects must be managed well to achieve the family’s business and personal goals.
- Each system also has its own associated risks that must be identified and managed well to achieve long-term business success.
- Each element of the dairy system is becoming more complex to manage with new technologies regularly arriving, new information and skills to be learnt and the ever present cost-price squeeze affecting margins.
As one farmer commented:
“This has been a great exercise to make sure we are heading in the right direction. I have found it very useful to spend a few hours away from the farm to examine what we are doing, why we are managing our business this way, share our ideas and gain valuable feedback from others.”
The benefits of knowing your own dairy system
As experienced and competent “Master Chefs” in their own kitchen, they now feel more in control of “their cooking” (the results of their labour) and confident to take on new challenges as they inevitably come along.
True success is now apparent in a clearer understanding of their own business, greater enthusiasm and motivation for managing their operation and a positive outlook as they know their dairy system is helping them achieve their financial and personal goals.
And who knows, one day they may take that ultimate challenge and showcase these new culinary (management) skills by producing wonderful dishes that will excite and satisfy even Matt Preston!
