Douglas Green Consulting Limited
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Pasture to Profit

2016
20
DEC

Pasture To Profit Conference 2016

Tom recently attended the Pasture to Profit Conference in Worcester and here are some snippets of information from presentations on business  management pertinent to all farmers. Below is the industry world view with Sean Rickard.

Farming Issues

  1. The UK farming industry is part of a global industry is subject to fluctuating global markets and long term world trends
  2. Small imbalances in supply and demand will cause large fluctuations in milk price and volatility
  3. Farming facing a trilemma: Increased demand for food, depreciation of world resources and climate change

Answers

  1. The supply chain must focus on maximizing production capabilities. Inputs vs outputs to reduce cost
  2. Adoption of technology to improve scale and efficiency of farming operations
  3. Small scale farms have 4 options to weather the storm: 1. Off farm income 2. Vertical integration 3. Improve productivity 4. Exit
  4. Food manufacturers must focus on productivity, capability & creating distinctive product

Working With Your Bank (Euryn Jones HSBC)

  • A business plan needs integrity, realism and clarity. Own your budget and stick to it
  • Have a clear business strategy
  • Management capability has a huge impact on farm profitability. The bank isn’t just investing in the business but also you. Borrower`s character & ability is key
  • Managing volatility and good cost control is key
  • Lending position is based on affordability, equity and security

Estimating cash availability (affordability)

EXAMPLE FARM

£k

Profit (before interest) 50
+ Depreciation 20
- Private drawings & tax 40
= Cash available for finance cost (interest & capital) 30


Farmer`s Perspectives

Business Resilience with Matt Pilkington - North Hants,  Malcolm Fewster - Yorkshire, Geoff Sayers - Carswell Group, Di Wastenage - Devon & Cornwall.

  • Resilience defined as: The capability to recover from a downturn in income and profit
  • The lowest cost producer will be the last to enter a downturn and the first to come out of it
  • Build a good team where everyone understands the business ethos
  • Adopt a positive mindset and outlook. Plus a continuous cycle of continuous improvement
  • Simple, repeatable systems – less decisions, ability to respond to change quickly
  • Cashflow management is key especially during time of rapid expansion an output price falling
  • Monitor and measure. Physical and financial. Monitor the debt: Asset ratio regularly and protect the assets
  • Focus on areas in the business which will provide the biggest impact on profit
  • “Needs & wants philosophy” Do you want it or do you need it?   Do the maths
  • Don`t be afraid of change 
  • Better is better before bigger is better

Retaining & Managing Staff With Excellence

How to manage farm staff by Nolliag Heiffernan, Psychologist.

  • Lack of clarity is one of the leading causes of job dis-satisfaction
  • Clear roles can only be defined if there is a strong understanding of how the business operates
  • Effective management and retention of staff starts by identifying exactly what the business requires
  • Reflect on your management behavior, and interaction with staff. Can you articulate what you need/ what is required?  Self-development is important. Be self-critical
  • What does the employee think their responsibilities are? Is this what you think they are?

Real Time Information For Improved Herd Performance

We have been reflecting on how clients use their management information and how to get the best from it. Here are some thoughts…

  • In majority of cases information available to us, the consultant is historic
  • Costings are a good example. They are a good indication of herd performance and feed efficiency, however by the time they are presented, it can be between 3-8 weeks from the month end in question…
  • On one herd this winter performance was not going to plan, &  by the time the costings were available it was estimated the extra feed had cost the business £8.5k
  • Presenting costing at the beginning of the month and estimating  the milk cheque is far more useful to us then waiting for the milk cheque to arrive
  • Doing your own  weekly quick assessment i.e. daily feed kg/divided by milk sales is a good  barometer of efficiency
  • Making sure your milk recorder has all the events available in an easily accessible format makes it much easier to asses fertility, production and SCC
  • Provide us with the latest backup file from the on farm accounts package, fully reconciled and an up to date list of creditors and debtors. This will allow the progress of the business to be tracked monthly to ensure profit requirements are achieved and measures can be put in place is performance is off budget or the overdraft limit has been reached
  • The old saying “if you measure it you can manage it” is very true but how frequent it is measured is also as important!

Farming Ammonia Reduction Scheme Grant

Details of this scheme have just been released

  • Grant funding is available to cover a slurry store i.e. floating covers or free standing for tanks
  • Available for dairy & beef farmers which have existing slurry stores
  • Up to 100% grant funded and no capital cap. Included in the scheme is one2one advice to help farming business reduce their ammonia losses and improve nitrogen efficiency
  • Apply from 1 December 2016. Your application must be received by Natural England on or before 31 January 2017. Late applications will not be accepted
  • Agreement length is a minimum of 5 years and slurry stores must be registered with the EA prior to applying for the grant

If you would like to discuss or need help applying for farming grants, please get in touch!

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Douglas Green Consulting
Brinkworth House
Brinkworth
Chippenham
SN15 5DF
UK

t: 01666 817278
e: douglas@douglasgreenconsulting.co.uk