Life would have been very different if we had a future version of ourselves time-travel and give us all the secrets that we know now. We are talking about things that we, as cattlemen, wish we knew sooner.
These are things I wish I knew sooner and that most people don’t ever figure out before it is too late. These are in no particular order, and they’re simply things that we wish are known to all cattlemen, or at least appreciated – earlier in farm life and that we would like to pass along to them right now.
Management Information System
We all take conscious calls regarding herd, herd size, shed design, infrastructure and investment, capital structure. All decisions will have pros and cons and have an impact on financial resilience and success of the dairy farm. There is no way to reverse bad decisions. The only way out is to make correct strategic, tactical and operational decisions that mitigate the adverse implications of wrong decisions taken. MIS provides the essential information gathered from a variety of sources, pooled into a single database and compiled for easy processing and decision making. Prepare and analyse MIS so efforts can be directed at cash flow improvement.
Cash flow is king
Focus on building cash flows and current ratio, even if that is done at low margin. Fatal to have insufficient cash flows – especially in the beginning. Margin improvement may follow. There are many ways to increase margins once the basic operations are built, e.g. dual branding, higher value added products to increase margins etc.
Fixed cost and Cash Reserves
Evaluate fixed costs and maintain cash reserves on the balance sheet for 12 months. We are tempted to say 18 months, and that will be excellent.
Focus on cow sale and breeding
Do whatever it takes, but make sure your herd size is aligned to the infrastructure and bandwidth available. As a thumb rule, 20-25% of the herd should be rolled over every year. This is extremely critical. Also, do not compromise on breed quality – imported semen cost may not cost more than 1-2% of farm expenses. That will help cash flows in two ways – it will not only improve yield, but will also fetch a higher value at the time of cow sale.
Reliance on vendors and price transparency
Build a team of reliable vendors. Reliability needs to be assessed in terms of product quality, price, timely deliveries, service quality and vendors’ understanding of dairy business in general. Most farmers around you can help. You may also access the Rates section to check prices.
Save underground water
Intense pumping results in lowering of the water table. Depletion of water table not only risks water supplies but also has immense impact on water quality, cost of dairy operations and equipment repair. Quality of milk also gets impacted by this.
Monitor Water Quality
Hard water marked by high total dissolved solids in water. It doesn’t just affect the cows. It affects chemicals in parlour, it affects pumps that pumped water, it affects nearly every aspect of dairy.