Focus energy on profit rises
Published 26/01/2010 | 05:00
As of last Thursday a total of 400 Dairy Profit Monitors from spring milk producers were processed by Teagasc.
Was yours one of the 400? Hopefully it was, but the bulk of them were from discussion group members.
Last year's figures do not make for pretty reading. I know they will not cheer you up, but the story they tell is just as important as the story they told when milk was 35c/l.
Several times over the years in these articles I have mentioned that dairy farming is a business -- just like any other business. The bottom line is the cows must generate profit and surplus cash. Last year was a tough year to be in the business in Ireland. A large number of them failed and the evidence is there for all to see when the business does not open on a Monday morning. It's a very black and white issue.
The dairy farming business isn't black and white. The farm may not be generating surplus cash, but it doesn't close down on a Friday and not open again.
A dairy business that is not generating cash can be the equivalent to a slow death, bleeding the owner dry over time. It becomes a vicious circle, inefficiencies creep in, motivation goes and, when that happens, you are better out of the industry.
The bottom line is dairy farming is a business. In that business you only have control of two areas: the first of these is the output from the farm (litres of milk sold) and the second is the cost of the inputs. You have control over very little else. Certainly, you have very little control over the price of a gallon of milk.
There is very little reward in time spent trying to alter things that are happening outside the farm gate. That is why it is so important to be really on top of what is happening inside the farm gate.