Presentations & Papers

Developing financially resilient dairy businesses for the next 10-15 years - what will be the key strategies?

By David Beca

The South African dairy industry has been very successful over the last two decades at improving farm profitability and consistently growing national milk production. Although it is widely accepted that a focus on pasture production and increasing pasture harvest has been the most important factor that has improved profitability, it is not so well understood what other factors have been important. In addition, there does not appear to be a widespread understanding of areas of weakness within the present farm production systems, or what external factors may have changed and could significantly influence the future. These three webinars endeavour to answer these questions and identify what may be the most important factors for farmers to focus on to build sustainable businesses over the next 10-15 years, including how to develop more resilient businesses that can withstand volatility in milk and other commodity prices as well as with the climate. All three of these presentations also have significant relevance to other dairy industries including the Australian, Argentinian and Uruguayan industries.

Webinar #1: What are the three dominant factors that farmers should focus on to increase profit on dairy farms?

The sub-title to this presentation is “Which are the essential ratios for dairy farmers to monitor if higher profit is the goal and how do these ratios change when pasture harvest increases, milk production per cow increases, and farm production systems change?” The presentation describes the ratios that can be used to describe profit and that should be monitored by dairy farmers to determine the impact of farm management changes on profit. It then reviews how these ‘profit-monitoring’ ratios change as pasture harvest increases, milk production per cow increases, and farm production systems change through reductions in pasture as a per cent of the cow’s diet. And then it develops conclusions from this review as to the three dominant factors that impact on dairy farm profit, which should as a result be the focus for building more financially resilient dairy businesses.

To view a video of the webinar presentation please click https://youtu.be/9pnmO-3yQNI

To view a video of the full webinar with Q&A please click here.

To download the PowerPoint slides please click here.

Webinar #2: What is the single dominant factor that has driven improvements in profit in South Africa over the last 20 years compared to other countries…and what is South Africa’s ‘Achilles Heel’ limiting profit in the future?

The sub-title to this presentation is “What more needs to be done to confidently establish the industry’s international competitiveness and provide a potential platform to becoming an exporting country?” The presentation compares the trends in the South African dairy industry over the last two decades with New Zealand, Australia, Argentina, Uruguay and United States. It then analyses the South African industry’s strengths and weaknesses, and confirms the dominant factor driving growth for the last 20 years. And then it identifies the major remaining industry weakness and outlines some strategies for South Africa to develop a competitive export milk industry.

To view a video of the webinar presentation please click https://youtu.be/Kk98UA5Ioto

To view a video of the full webinar with Q&A please click here.

To download the PowerPoint slides please click here.

Webinar #3: What are the step-by-step changes a South African pasture-based dairy farmer would need to make to lower their cost of production and increase their profit margin to establish a more financially resilient business?

The sub-title to this presentation is “What are the challenges and opportunities when changing a production system and including a higher percentage of pasture in the diet?” The presentation initially reviews how a model was developed to represents an average pasture-based South African dairy farm. It then reviews the key assumptions that change as pasture as a per cent of the diet changes, and the impact of these changes on farm performance. Conclusions are then outlined as to the impact of these changes on profit, cost of production and a host of other ratios, as well the impact on the international competitiveness of the industry. Finally, it identifies the most significant business challenges faced by farmers when they implement a lower cost of production system.

To view a video of the webinar presentation please click https://youtu.be/Frtn0jQVZxs

To view a video of the full webinar with Q&A please click here.

To download the PowerPoint slides please click here.

To download the full farm business analysis reports of the models in South African number format please click here.

To download the full farm business analysis reports of the models in Australian/NZ/UK number format please click here.

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