UK - Rural Business Research, the group of universities and colleges behind the Farm Business Survey, have found that dairy farms in the top 25 per cent performance category made £450 more profit per cow in 2015.
Detailed analysis of almost 300 dairy farms participating in the annual Farm Business Survey looks at the features of these top performing dairy businesses. Which, in 2015 achieved farm business incomes 45 per cent higher than the average dairy business.
These results, as Rachel Lawrence from the University of Cambridge explains, are not purely the result of higher yields and prices, but reflect a bigger picture of farm business performance.
“Top performing farms tend to have higher yields, but also a tighter control on costs. Concentrate to milk conversion is a clear example of this. These figures add up, resulting in per cow gross margins that are over 50 per cent higher for the top farms.”
There’s also a big difference in labour and machinery performance on these more productive farms. The top category of dairy businesses spend 27 per cent less on labour and 18 per cent less on machinery for every £100 of output.
The top 25 per cent invest 3 per cent more in capital improvements per cow, per year. This reflects investment in fixed assets and improvements including buildings, equipment and machinery. It’s possible that this extra investment is helping to improve labour and machinery efficiencies on these top performing farms.
Looking to the future, dairy businesses that are more efficient are likely be more resilient to further price fluctuations. Ms Lawrence continued: “What really separates our top performing farms is productivity; a greater financial return for every pound spent.” Careful investment, with a focus on productivity can reap financial rewards for businesses.
TheCattleSite News Desk