Digesting Data

Published 15 August 15

In the Dolphenby farm office, Ian Powell of The Dairy Group used AHDB Dairy’s newly published Evidence Report 2015 to show the value of collecting data for comparative purposes.

“The Dolphenby team uses CFP – comparable farm profit; this is one way of measuring performance, but remember that CFP excludes rent and finance,” he said. “However there’s plenty of other data out there to match your business against. The important thing is not to measure yourself against the average as the figures usually encompass an enormous variation in performance. You want to be aiming for the top 25% and, if you’ve reached that, the top 5%.”

Taking the revenue from milk – which showed a broadly similar milk price across all farms in the Evidence Report 2015 data groups – he drew attention to differences in feed and herd replacement costs between the best and worst performing herds. “How you feed cows is critical for business performance – there’s 3.6ppl difference between the top and bottom 5%. But make sure you’ve attached proper costings to forage production as this can often be underestimated. Herd replacement costs differ by 3.9ppl in the same groups – whether that’s down to inefficiencies or mortality is not clear.

Article 5“Then there are also big differences in cost of labour. It’s not to do with how much you are paying your staff but how you utilise that labour. It indicates a difference between businesses that have motivated family or staff members working to maximum efficiency, and those that have teams which are just going through the motions.

“So, while in the AHDB Dairy report figures, the better performing herds are showing higher stocking rates, more cows calving within the year indicating a tighter calving pattern and a greater milk yield, they are also showing 14 hours per cow fewer labour hours between the top and bottom 25%.

“In total, this has led to a 20ppl difference in economic margin between the top 5% and the bottom 5% – or more than 11ppl between the top and bottom 25%. No one can afford that, especially at today’s milk prices.”

Ian also emphasised the importance of collecting physical data to help keep the financial results on track. He referred to the whiteboard in the farm office which displayed the key performance indicators the team was working towards.

At the top of the list was ‘Simple and enjoyable’ – reminding staff of the overarching ethos of the culture on the farm. “The big ambition of profitable milk production (£££) is next,” he pointed out, “followed by specific targets such as 90% calved in under 6 weeks, 75% heifers calved in 3 weeks, less than 20% replacement rate, revenue from surplus stock, and more than 14 tonnes DM/ha grass grown.

“These are great targets, keeping everyone on the same page and also ensuring the building blocks are in place to deliver the desired financial results.”

 

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