This is a subscriber-only article
by Niall O’Regan, Ulster Bank
For most farmers, that means staying focused on the basics of good grass and crop production, along with livestock husbandry. Investing in areas of the business that give the quickest and best return such as soil fertility, grazing infrastructure and herd health will ensure your business has the resilience and capacity to withstand future challenges. Whether you are a new entrant to dairy or an established tillage farmer, it’s always worth assessing how you could utilise less time, effort and resources, to achieve your goals, thus providing greater returns.
While price volatility may impact on cashflow, the biggest unknown and challenge in farming is the weather. The weather will ultimately determine crop yields, grass growth, grass utilisation and the amount of feed that has to be purchased. 2018 has proven to be a costly year due to the difficult weather in the spring and the prolonged drought for parts of the country during the summer. Experienced farmers have learnt to mange with previous shocks to their business such as in 2009, 2012, and 2013 when a combination of lower farmgate prices, fodder shortages and difficult weather conditions tested their resilience.
Building a culture of continuous improvement by looking at ways you can do the job better and more efficiently throughout your business will allow the day to day operations run smoother and allow better use of time. Everything from cow flow in the parlour, easy access to paddocks in the autumn and spring, to having all tools and hardware in a designated place can make life easier and save a lot of time at busy times of the year. Good stockmanship skills are often undervalued and can be let slip over time. It’s time well spent for all farm employees to brush up on the basics of good animal and crop husbandry such as hitting targets weights for young stock, using timely and accurate vaccinating and dosing procedures, and taking timely action with hoof care or general animal ailments. This can help to reduce veterinary expenses and save significant time while achieving the full potential from the herd or flock.
While capital expenditure might have been postponed in 2018 as a consequence of the weather events and impact on cashflow, the temptation can be to reduce costs in the short term which could affect output and farm performance in the long term. While financial discipline is important, it’s equally important not to allow efficiency to be affected by cost cutting. For example, changing to cheaper or inferior genetics when it comes to breeding cows might reduce costs in the short term. However, the effects of this can be seen in the years ahead when output from the farm may be compromised due to lack of genetic gain or having less valuable stock on hand. The priority for 2018 should be to get through without compromising cow welfare and health, along with maintaining soil fertility to maximise grass and crop production for 2019 and beyond. Short term gains such as deferring reseeding, lime, P and K applications or not maintaining the appropriate body condition on animals will impact on profitability in the medium to long term. Looking after the health and welfare of your herd or flock and achieving optimum soil fertility are the key areas of your business that will deliver the best dividends in the years ahead.
Benchmarking performance is a standard procedure for all businesses and farming is no different. The Teagasc Profit Monitor and grass measurement are some of the important tools easily available to allow farmers compare their performance to see where they are doing well and areas that can be improved. Comparing performance with fellow discussion group members is a valuable source of knowledge transfer and information sharing.
Maintaining good working relationships, particularly in a more difficult year, can be a hidden asset to a business. Having a good relationship with all stakeholders involved in the business such as contractors, feed suppliers, milk processor, bank manager, Teagasc or Agricultural advisor and your accountant can make for a lot less stress and hardship. It takes time to build a relationship of trust with these people and this goodwill can be very valuable to a farming business. The importance of good, independent technical advice, quality and reliable products and dependable service should not be taken for granted and are important components of any successful business.
Our Agri team are ready and available to meet with you, contact us on agri@ulsterbank.com
