{"id":12965,"date":"2014-11-07T00:00:00","date_gmt":"2014-11-06T11:00:00","guid":{"rendered":"https:\/\/www.farmersweekly.co.nz\/pushing-for-profitability\/"},"modified":"2014-11-07T00:00:00","modified_gmt":"2014-11-06T11:00:00","slug":"pushing-for-profitability","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/news\/pushing-for-profitability\/","title":{"rendered":"Pushing for profitability"},"content":{"rendered":"Reading Time: <\/span> 4<\/span> minutes<\/span><\/span>

\u201cEvery group is different,\u201d chairman Phillip Buckthought said.<\/p>\n

\u201cBut the concept can be changed to suit different areas. We\u2019d like to see the programme grow throughout the country.\u201d<\/p>\n

He milks 600 cows on 180ha at Kerepehi, running a DairyNZ System 3 operation with palm kernel and kibbled wheat fed through an in-dairy feeding system if conditions dictate. The farm produced 233,000kg milksolids (MS) last season and has a target of 250,000kg MS this season.<\/p>\n

The Dairy Push programme is the brain child of George Moss and a group of farmers in South Waikato which was taken up by the Hauraki Plains P3 Trust. The trust was started three and a half years ago by a group of seven local farmers and the chief executive of one of the local vet clubs. P3 stands for Profitable, Progressive Plains and the trust\u2019s mission is to increase the wealth, value and satisfaction of dairy farmers on the plains and benefit the community as a result.<\/p>\n

A focus farm was set up on Angus and Karen McInnes\u2019 property and after three years they passed the baton to Megan and Michael Webster.<\/p>\n

P3 decided to take a multi-pronged approach to achieve its purpose, so alongside its other initiatives DairyNZ encouraged P3 consider the Dairy Push project. Contact was made with the South Waikato group, whose initiative included a focus farm. After a series of meetings and a lot of discussion the green light was given to go ahead in June last year, with the aim of having everything in place by the end of 2013. Buckthought was appointed chairman of the P3 Dairy Push programme, having been a trustee of P3 from the beginning.<\/p>\n

Tenders were called for facilitators and AgFirst Waikato was successful. It now has seven local consultants involved.<\/p>\n

\n

\u2018It\u2019s all about where your costs are sitting and some don\u2019t realise that they are so good or so bad.\u2019<\/p>\n<\/blockquote>\n

The next step was getting interested farmers signed up, which included them joining DairyNZ\u2019s DairyBase benchmarking system to make certain that the information coming out would have integrity.<\/p>\n

A target of 25 participants was set, because at least 20 were needed for a DairyBase benchmarking group. The geographic area was defined as stretching from Tirohia to Tahuna in the south and up State Highway 27 to State Highway 25 to Thames in the north.<\/p>\n

A launch was held at the end of October last year, where Moss and another South Waikato farmer, Craig Littin, spoke to 65 Hauraki Plains farmers. Forty-six participants signed up, with three pulling out when they moved out of the area for the 2014-15 season. There are 24 farm owners taking part, nine 50:50 sharemilkers and 10 variable-order and contract milkers, with the last group being very much encouraged to join.<\/p>\n

\u201cWe saw these young farmers as the future of the industry,\u201d Buckthought said.<\/p>\n

\u201cThe potential gains if we\u2019d had this sort of initiative some years ago were made clear to everyone.\u201d<\/p>\n

A three and a half to four-year timeframe was set with the aim of increasing profitability of participating farmers by $500\/ha more than the average for the greater Waikato area. Farmers agreed to series of visits from an AgFirst consultant. Unlike the original South Waikato group, a small contribution to funding was required with farm owners paying $1000, 50:50 sharemilkers $500 and variable-order and contract milkers $300.<\/p>\n

\u201cIt was part of the frame-up from the beginning,\u201d DairyNZ Hauraki Plains consulting officer Fiona Wade said.<\/p>\n

\u201cIt didn\u2019t put anyone off.\u201d<\/p>\n

DairyNZ is the principal funder with Hauraki Plains District Council also contributing in a small way. She said the programme fitted well with the dairy industry strategy of increasing profit to $65\/ha from the present $50\/ha by 2020, and she\u2019s already had interest from both North and South Islands about extending Dairy Push to other areas.<\/p>\n

\n

Profitability on the way up \u2013 looking back over the Hauraki Plains from Tahuna.<\/p>\n<\/div>\n

There\u2019s a big range in the farming operations, with herds ranging from 160 up to 900 cows and profitability from -$400\/ha up to $3900\/ha.<\/p>\n

AgFirst consultant Lycinda Lett said one of the interesting points to come from the project so far was that some farmers already achieving good profitability were among the most driven to improve what they were doing. Financial information, which is kept confidential, is presented at field days on scatter graphs which she said was \u201ca real motivator\u201d because many thought their position relative to others in the group was better than it actually was.<\/p>\n

\u201cIt\u2019s all about where your costs are sitting and some don\u2019t realise that they are so good or so bad,\u201d she said.<\/p>\n

\u201cThey also learn about how little things do make a big difference.\u201d<\/p>\n

Wade said it was a huge advantage that honest data was used in the comparisons. A scorecard developed by the P3 group two years ago is handy for many in the group to keep track of their financial information. It\u2019s a quick and simplified version of DairyBase with a small set of key performance indicators, easily showing profitability trends.<\/p>\n

Because Dairy Push is individual to each farmer\u2019s business, goals and aspirations, targets can be broken down into bite-sized chunks of key actions if they\u2019re not being achieved at consultant meetings, which will take two to three hours.<\/p>\n

\u201cThat\u2019s where the facilitators are key as some farmers procrastinate when it comes to the business and budgeting etc,\u201d Buckthought said.<\/p>\n

Occasionally, there have been situations where the participant and the facilitator simply didn\u2019t gel, for whatever reason.\u00a0 The Dairy Push group realised it was imperative to recognise this early on so changes could be made. It was also made clear farmers\u2019 own consultants were welcome to attend meetings along with rural bankers who saw the initiative as a way of lifting farmers\u2019 budgeting and monitoring skills.<\/p>\n

Lett said the lower milk payout this season was certainly helping farmers get a better understanding of the importance of budgeting and cashflows.<\/p>\n

\u201cBut for some it\u2019s still more satisfying to fence a kilometre of waterway than do a revised budget and alter five expenditure items.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"As the Hauraki Plains Dairy Push group celebrates its first anniversary there are plans to get another underway in the Morrinsville-Matamata area.\n","protected":false},"author":33,"featured_media":12966,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[3],"tags":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t