Living with stress of planning
No doubt these farmers can relate to their children, whose Christmas wishes must satisfy Santa’s regulatory clauses before any gifts are delivered. Eventual dairy success will require a fine mix of planning and patience.
Both of these qualities were in evidence at last week’s Teagasc annual dairy conference in Cork. Along with rolling out the new Dairy Manual (see below), the conference featured guest speakers such as Dairygold chief executive Jim Woulfe, Teagasc director Gerry Boyle, James Allen of New Zealand-based agri-business advisors AgFirst, plus experts from Teagasc, animal health companies and banking sector.
Dairy farmers are hatching ambitious expansion plans now that will not come to fruition for at least three years. Teagasc’s guest speakers showed both the potential gains and the stresses that come with moving from life as a solo operator to being the manager of a team of people, few of whom are family members.
For instance, New Zealand agri advisor James Allen said: “Learning to manage stress is important. Going from being hands-on to hands-off is not easy. It takes five years to learn to delegate responsibilities.
“In New Zealand, most farm businesses have 10 to 15 people working. Owners have to learn to ask themselves, ‘am I the best employer that I can be?’ You must capitalise on what you are good at and learn to outsource the rest.”
Mr Allen said farmers must ask themselves how big they want the business to be? They must examine economies of scale, core personnel issues, such as the need for experienced milkers and drivers, and multi-lingual regulations for non-English speakers working on their farm.
He also noted that 70% of businesses (and not just farm businesses!) are initially shot down by the banks because they apply for loans without any formal business plan.
For clients who cannot face the stress involved in being a business owner, he said the best advice may well be not to do it at all. Farmers attending the conference heard Mr Allen tell the story of young Kiwi farmers Ian and Pamela’s 20-year farm plan, one of whose goals is to play no active part in milking the cows once they’ve turned 45 years of age.
In the interim, having increased cow numbers from 240 to 340 on their farm in North Waikato, they have taken on more work, more stress and more debt. Ian and Pamela’s debt levels went from around NZ$20 per kilo pre-expansion up to NZ$30 per kilo post-expansion. This extra cost came from having to invest in extra sheds, machinery, capital and staff costs.
The farmers also heard the tale of Denis Finnegan, a young farmer who has partnered with his father Dan to expand the family farm in Coachford, Co Cork.
In 1988, Dan Finnegan was milking 82 cows with a calf to beef system, at a time when Denis was finishing Agricultural College. Dan was farming over 200 acres, of which 136 acres were rented. In 1999, a 54-acre adjoining farm was purchased, bringing his land to 119 acres.
A few years later, having conducted a profit monitoring exercise, Dan and Denis saw that their dairying operation was eight times more profitable per hectare than beef. In 2006, they launched a joint partnership, mapping out the goals they wanted to achieve by 2010.
Not unlike the New Zealand farm, this involved accepting a certain level of increased stress. Denis estimates that the fertility, stock, machinery and other capital costs for expansion came to around €2,200 per cow.
Nonetheless, both father and son see the move as a success, achieving their goals of sustaining two livelihoods, delivering a working business and ensuring the safe succession of the farm. Having hugely improved performance such as grassland management and herd fertility, they plan to milk 180 cows by 2015.
The expansion looks like being a long-term success. They’ve changed from a dairy/beef to a dairy/heifer replacement farm, built roads and water systems and doubled their herd size.
However, perhaps more impressive still has been their success in achieving the “softer” goals: better lifestyle with a better income, incorporating time off into the working week and annual holidays for both partners.
Naturally, the threat of super levy fines formed a backdrop to all of the hotel discussions, looming like Santa’s lump of coal over the dreams of the next generation of Irish dairy farmers.
