We are almost one month into 2020 and here at The Bullvine we are eager to be a relevant resource and sounding board for the new dairy year. For some of us, the indulgences of the holiday season are affecting both our waistlines and our health goals. It would be wonderful if we could grow our businesses as easily. In fact, we can, if we take what we know and turn it into actions.
“Taking a Risk Can Work but The Entire Dairy Team Must Work Too!”
Dairying in 2020 will have struggles as dairy farmers face multiple risk ranging from volatile milk prices, trade wars and declining milk demand. Throw in more recent risk of being slammed in the press or facing health and production risks from changing climate and environmental factors. The good news is that these symptoms of distress are fixable. None of them are easy, but the pathway is possible. Dairy operations must start by pulling the team together and taking the necessary action steps. Is the goal more milk with less work? Increased fed efficiency per pound of milk produced. Lower bulk tank SCC. Raise first service pregnancy rate. Dramatic improvements can occur in as few as 12 to 18 months. We must stop searching for headlines that deny the challenges and then buckle down as dairy managers always do. Get to work.
“Effective 2020 Change Starts at the Top”
Whether you are the actual top, meaning ownership of the dairy or whether you are the manager, change starts at the top. More clearly. Change starts in the heads of those at the top. Whatever is wrong with your dairy in 2020, it is functioning exactly as you have designed it. The first step to better dairy profitability is to accept that you are responsible for where you are today. You are also responsible for creating a 2020 plan of action that works. Then make sure that it is communicated to every person who is part of the process. Know it. Do it.
“Who Should Go? Who Should Stay?”
Even if your dairy team has recognized dairy stars, a bloated dairy team pulls the rest of your operation down. Dairy superstars have to work twice as hard when teamed up with a poor performer. The hardest working dairy staff probably won’t say anything. They will just suck it up and work twice as hard and burn out that much faster. Do you have some staff that are just poor performers? You must have at least one or two…Come on, be honest. If you do, then you need to let them go.
Letting people go is not an easy task for most dairy managers. We extend endless second chances. Let go and improve your bottom line. It will also improve team morale. The cattle herd and the dairy humans will both benefit. ‘Happy employee make happy cows” and we all know “Happy cows make milk.” Move forward with well-considered cow culling and staff cuts.
“Learn to Dairy by the 2020 Numbers”
If we expect to realize our 2020 resolutions, we must be prepared to gather and use all the data. One business source categorically states that 4 in 10 businesses don’t have a budget. Success or failure follows the numbers. First get the data measurements for your dairy operation and then respond to what the numbers say. You don’t want to measure yourself against oft quoted “averages”. What you want are the actual numbers of your own dairy farm. Know where you are at this exact time. It is important to target each step from where you are now to where you need to be. For example, targeting 110 pounds per day milk production may be a long way off. Don’t mimic the actions of the herd that is almost there already. You can’t get there by feeding a 110-pound ration to a cow that is currently producing 80 pounds of milk. To do so risks failure and also risks health issues. Target each small step. Start today.
“Not All Dairy Consultants Are Long Term List Ready”
Make list of the suppliers to whom you pay money. Make a corresponding list of the exact service or services they provide that make your dairy profitable. Make a simple note of the last time each one met or exceeded your expectations. Do they provide actionable advice? Do you count on them for reliable delivery and excellent follow-up on the paperwork? Don’t value suppliers on the basis of perks like a trip to an exotic meeting location, sports tickets or a new jacket or cap. These giveaways are pleasant but they don’t put money into your dairy bank account. Is your value as a customer being recognized by those who count on your checks? A 2020 dairy vision requires us to challenge the entire dairy team, including the ones who are off the farm. Keep the ones that meet changing needs and eliminate those who have become more social than business driven.
“Cut The 2020 Fat”
We need to continue this conversation because dairy operations that will remain financially viable in 2020 are already experts in cutting expenses. At boardroom tables around the dairy industry, CEOs and Financial Planning Departments have distributed lists, enumerating projected expenses and projected profit targets based on the needs and expectations of their head office gurus. The trickle down effect has every area manager and salesperson looking for ways to reach those targets. Dairy customers – such as your dairy farm — represent a number that they must check off on their road to success. For years, we assumed this was a win-win situation. The veterinarians, feed company, processor and many others, provided something we needed. We used it. We produced a healthy product. It was a win-win. In 2020, we need to check each of these inputs more carefully and make sure that we are actual receiving a value-added input. If not, we must cut the fat.
“From Reflex Resolutions to Real Dairy Reality”
Many of us indulge in making New Year’s Resolution. Before we even see February 2020 we know whether our plans are achievable or if we are already crying over spilled milk. Remarkable success needs to build from a foundation that focuses on actual dairy logistics that we can do better, faster, cheaper. This is what our individual dairy value proposition is built on. We say we are intelligent dairy managers but dairy success doesn’t arrive just because we were good at breeding show winners, or because we have a PhD in AgBusiness or because we are descended from generations of dairy farmers. What do we do that is EXCEPTIONAL and IMPORTANT to our dairy’s success? If you can’t answer these questions, the question of our ability to produce relevant success is also unknown.
“Technical Transformation Will Continue to Shape 2020”
We now browse the internet for information, take pictures with our smartphones and send emails from our laptops. This is digitization. If we truly expect to transform our dairies we have to go beyond a few technical process upgrades and embrace digital transformation. Farmers are increasingly using drones, daily satellite based images and near autonomous robots. Digital transformation is a process. It will make huge strides in satisfying the end customer of our dairy products. And – when all is said and done -satisfying the end customer is the very reason why we are in the dairy business.
“The Difference Is in The Details”
Although you may think the preceding proposals are difficult, there still remains the important task of summarizing your 2020 vision into a clear and concise action document. This gives you clear talking points to present to every financial advisor, farm consultant, vet, nutritionist, and geneticist that you work with. Details must be written down. Shared. Remembered and Repeated.
“Is this 2020 dairy decision making so difficult that it’s impossible?”
No! What makes this visionary foresight possible is simply getting started? Start sharing it with people who know what dairy success looks like. Start with yourself and your staff. Revise and refine. Once you have adjusted your draft, get back to your team and put it into action.
“You’ve Got to Give, In Order to Earn What You Take”
When we break it down this way, the changing dairy industry economics become easier to manage. We can’t just explain a desire for change. Instead, we need to actively define people’s expectations. We need dairy customers to feel like we’re giving, not taking. We need to feel that our dairy suppliers are adding value, not trying to extract it. We have to show customers that, our goal of a healthy food product is in complete alignment with their expectations. Yes, we must show the foresight that shows them the that we’re always looking out for them and their needs. They can expect to be taken care of. The same must be true of the other members of the supply team.
THE BULLVINE BOTTOM LINE
Leading a 2020 dairy operation into the future is all about what you are looking for. Eyes wide open doesn’t mean being blind to serious issues and risks. It does mean working every single day to make the conditions, cows and dairy teams the best they can be. Attainable and sustainable. Here’s to seeing our dairy business with ever greater clarity this year.