Can you be a high profit dairy farmer? Here's the 7 key traits you need
There are certain traits and characteristics that are common among profitable farmers that see them earning a higher margin compared to their peers, Agricultural Consultant and Land Agent Mike Brady told the room at this week's Irish Grassland Association conference.
He said that for him, the start line of a profitable dairy farm should earn more than €100,000 of profit, which he said can achieved on 40ha and a profit of €1,000 per cow. Net profit per hectare and then the number of hectares that are owned.
“€100,000 is what I would propose as the baseline that any farmer should be aspiring to, by the time all the bills are paid in my opinion,” he stated.
In order to achieve a decent level of financial performance, which he said should start at a baseline of €100,000 for a dairy farmer, there are 7 traits that farmers adhere to:
1. Scale of farm - own a lot of land
The amount of land farmed is the biggest contributor to the amount of profit earned, according to Mike. He said that there is a strong correlation between land owned and potential profit to be made, and as a farmer’s land bank goes up, so should the profits in a steady fashion.
“The more land you own, the more potential profit one can make. There’s two types of farmers in my eyes, good ones and bad ones, not big ones and small ones.
2. Focus – know their system of milk production
According to Mike, there’s a larger variation within a system of farming rather than between the systems themselves. He said the most profitable farmers he sees understand the the cow that suits there systems and work from there.
“It doesn’t matter what type of system of milk production it is. There’s bigger difference within systems rather than between systems.”
3. Financially savvy – understand the figures
Whether a plan is formally written or farmers have a plan made out and keep it to themselves, the farmers with the highest profit always have a plan for the future of their farm.
“High profit dairy farmers have a business plan, which has a clear end goal.”
He also said that these farmers are also good at assessing opportunities and threats and stay away from ‘fad or fashions’ within the dairy industry.
4. Leadership skills – can manage labour well
In order to increase profit margins, Mike said that farmers need to have good leadership skills to lead the team to success.
“You have to be good with people – on farm people staff an your family – as a leader you have to bring your followers with you,” he explained.
5. Technically efficient – good physical performance
According to Mike, it is not difficult to make a profit as a dairy farmer. However, he said that there is a huge difference between the best and worst farmers in the country, and that there’s huge scope to improve efficiencies on many farms.
“Breeding is what separates the high profit guys from the middle of the road guys. They know the cow that drives the profit in their system.”
6. Team – good team around them
“High profit dairy farmers have a good solid team around them, which has probably around for a long time. Discussion group, ag consultant, accountant, tax consultant, banker that understands your business, solicitor, are very important people to be surrounded by.”
7. Good values – balanced personal and business goals
“Ambition and pride are good, they’re important point in our industry but in moderation. Work and life balance must be right,” he said.
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