LEARNING FROM THE BEST RESULTS FROM INTERVIEWS WITH 20 OF THE BEST PERFORMING DAIRY FARMERS IN DENMARK
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1 LEARNING FROM THE BEST RESULTS FROM INTERVIEWS WITH 20 OF THE BEST PERFORMING DAIRY FARMERS IN DENMARK SCANDIC PARK HELSINKI, FINLAND, SEPTEMBER 3 RD 2015 SENIOR ADVISER ULRIK TOFTEGAARD JENSEN, CAND.AGRO SEGES TEAM FARM MANAGEMENT CATTLE PRODUCTION JTA@SEGES.DK 1...
2 WHY IS IT RELEVANT? 2...
3 ABOUT THE PROJECT 1. Mapping of best practices 2. Comprehensive survey of farmers who are continually among the best, measured on the bottom line (ROA, Farm Assets Return on Farm Assets) 3. Knowledge from the project is used to lift the other producers 3...
4 PARAMETRES/QUESTIONS 1. Strategy 2. Personal leadership 3. Production and economic planning 4. Motivation and values 5. Family life 6. Inspiration, sparring and use of advisors 7. Check value of the production facility welfare, logistics and routines 4...
5 SELECTION OF THE 20 CATTLE FARMS 1. Milk producers - 80 % of the gross income must come from cattle or forage production 2. Looking ahead: do not run attrition strategy 3. Over 150 cows 4. Equity to assets ratio, solidity of at least 10 % from 2011 to
6 WHO ARE THEY? Scale of production 6...
7 WHO ARE THEY? 18 one-man owned, 2 partnership 7 free trade, 7 partnership with former owner and 6 family trade Age: from mid-30 s to mid-50 s 10 milking parlours, 5 robot milking, 3 carousel, 2 with milking parlours and robot milking 7...
8 TO WAYS TO PROFIT Contribution margin - Demand to contribution margin = profit 8...
9 CONTRIBUTION MARGIN, CATTLE Gross income, Cattle Milk, beef sale, net sales of livestock, real and price changes of livestock - Unit related costs Feed costs, vet & med. breeding, cattle advice and other cattle related costs = Contribution margin 9...
10 DEMAND TO CM = CAPACITY COSTS + CAPITAL COSTS 10...
11 TWO WAYS TO PROFIT Contribution margin - demand to contribution margin = profit 1. Low cost Demand to margin, cattle < 11,000 DKK per cow = LOW COST 2. Yield max (Gross income, cattle (milk, livestock and beef sale) DKK per cow > 30,000 DKK = YIELD MAX 11...
12 BALANCE IN THE FARM ECONOMY ( ) 12...
13 KEY SUCCESS FACTORS LOW COSTS KISS keep it simple stupid High capacity utilization Cost efficient supply chain (make-or-buy) Conservative investments strategy Sharp eye on the input prices (bargain with supplies) 13...
14 KEY SUCCESS FACTORS YIELD MAX Extraordinary good animal welfare Optimal facilities for the cows to perform Highly skilled and dedicated workforce Contentious focus on the qualities of feed and other input factors Long time relationship with few trusted suppliers 14...
15 THE FACILITIES ARE WELL UTILIZED (1) The barns are neither new nor very old, typically built between and extended five years afterwards. They exploit the framework they have - and they do it very well 15...
16 THE FACILITIES ARE WELL UTILIZED (2) Most of them At least one cubicle per cow Have cow and calves mortality below the Danish average They can improve their disease prevention Are very aware on claw health and to check lame cows immediately 16...
17 THE FACILITIES ARE WELL UTILIZED (3) Most of the farmers Cows and heifers are calving in common calving boxes with low stocking density They are especially alert on first calf cows They give colostrum before 6 hours after birth They exploit the framework they have - and they do it very well 17...
18 HOW ARE THE BEST? a. Competence and history b. Leadership c. Visions and strategy d. Inspiration and sparring e. Financial and management 18...
19 A. COMPETENCE AND HISTORY Very passionate about dairy farming Limited formal leadership training Working hours per week Act strongly (powerful) and flexible Conscious of their own strengths and weaknesses Adept at their craft - cows Motivated by the results of benchmarking Business acumen 19...
20 WHO DO YOU BENCHMARK AGAINST AND WHAT MOTIVATES YOU? 20...
21 B. LEADERSHIP Flat structure Training of employees: "follow me" method High degree of delegation of responsibility Participation in everyday life: presence Good relations with employees Handling and attitude walk the talk Motivating employees approval & recognitions, empowerment, salary, bowling 21...
22 LEADERSHIP - ADJUSTING
23 C. VISIONS AND STRATEGY There must be harmony and balance Low cost vs. yield max Clear strategies with focus on the bottom line An inner strategic compass gut feeling A large herd size is not a goal in itself Focus on cows outsourcing of field work 23...
24 D. THE SOURCES OF INSPIRATIONS AND SPARRING 24...
25 E. GREAT OPERATIONAL AND FINANCIAL MANAGEMENT Well-planned and systematic workflow Excellent overview over the production and the farms economy Use of key performance indicators (KPI) Clear communication about the farm goals Huge involvement of the staff in the goals of the farm Sharp follow-up on the KPI 25...
26 TENDENCY BY MORE THAN 300 COWS Greater focus on delegation of farms with more than 300 cows They have learned to delegate (others are afraid of the size > 300 cows) Biggest challenges: - Management of staff - Time for family life The employee nationality < 270 cows > 270 cows Only danish Foreign and danish (mixed or only foreign) 26...
27 FARM INVESTMENTS (AVERAGE ) 27...
28 CLEVER INVESTMENTS Did not buy land during the bubble ( ) Solid investment calculation (NPV and pay back time) Always has a maximum bidding price Strength to say NO Gut feeling is important If I can't sleep at night - I am not doing it 28...
29 SUM UP 29...
30 HERE THEY ARE ESPECIALLY GOOD Excellent overview over the production Conscious of their own strengths and weaknesses Staff management Planning and organization of the daily work Business acumen (no new tractors, thorough preparation before any investments, strength to say no) 30...
31 BIGGEST CHALLENGE FOR THE 20 BEST Staff management Time for family life Public bureaucracy and control Delegation (afraid of losing control) 31...
32 IMPORTANT LESSONS 1. They are not good at all things 2. But very aware of their strengths/weaknesses and uses them strategically 3. Strategy is not something they have but something they do! 4. Alignment between attitude and actions walk the talk 5. Important to make tough decisions early For example: Weak calves Employees - there has been trouble with several times 6. Leadership you can always improve 32...
33 POTENTIALS FOR FARM ADVISERS Advisers, who have the courage to go (even) closer and tell the truth push me not please me HR-support Leadership training Elite discussion groups (national or international) Inspiration from great leaders from other trades 33...
34 REFLECTION (5 MIN) 1. Find 1 or 2 things from the two presentations you find interesting 2. Consider what the biggest obstacle is for you to carry it out (who can support you) 3. Please tell it to your neighbor 34...
35 SMILE AT THE WORK TASK 35...
36 PERIODIC TASK 36...
37 THE GOOD JOB START (BEFORE HIRING) 37...
38 THE GOOD JOB START (AFTER HIRING) 38...
39 THANK YOU FOR YOUR ATTENTION YOU CAN DOWNLOAD THE REPORT AT OR VISIT
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