MAx. Profit v life style

milkprofit

Agriland recently reported on a Teagasc Dairy Expansion seminar where it was stated that ‘If you’re not farming for profit, we’d like to wish you well with your hobby’.

An interesting statement, but one that implies that profit is the only measure of success for a dairy farmer. Many dairy farmers are very busy chasing profits without understanding why. Are they chasing profit for profit’s sake? Farmers need guidance regarding how much profit they need from their business and for what purpose.

A profitable farm is rarely an end goal in itself, rather a stepping stone towards other bigger goals. This appears to have been forgotten. We need to develop a wider range of ways to measure farm success. Most farm comparisons only measure farm financial performance and the technical data that correlate strongly to it. While these will always be hugely important, they don’t acknowledge the long-term goals or objectives of many farmers.

Consider Farmer A. He is one of the most profitable farmers that I know. His technical ability and farm financial figures are held-up as something the rest of us can aspire to.

Farmer A has worked hard for over 40 years developing his business. He uses little or no hired labour, does his own hoof paring, AI and the majority of tractor work. These choices contribute hugely to keeping his costs low and his profits high. As a younger man, he was heavily involved in sport, but has drifted from that over the past 20 years as he has been working long hours most evenings and weekends.

A combination of sports injuries and long hours has left him in poor physical health now. His grown-up family, seeing the ongoing punishing schedule their father undertakes, combined with his physical ailments, have chosen not to get involved in the farm, despite it being hugely profitable. Is Farmer A a successful farmer? Would any of our young turks currently busting a gut to enter or expand in dairy farming genuinely aspire to be where he is 40 years from now?

Now consider Farmer B. He too is very strong technically. Running a very compactly-calving herd, with a strong emphasis on grass management, he has developed a very solid and consistently excellent system over his 30 year career.

Yet, his profits are not in the top 10%, or even the top 25% – something for which I and others often criticise him. On spending more time with this farmer you soon learn that he is very happy with the profit levels the farm is delivering. His hired labour and contracting bills are considered excessively high, as he has no machinery of his own apart from a quad and only does five milkings himself per week. All machinery work is done by contractors, including winter feeding and all fertiliser spreading. He takes regular and long holidays with his family including numerous weekends away during the year. He is involved in a variety of sporting and cultural organisations in his community but interestingly none are farm-related as he actively seeks to broaden his horizons beyond agriculture to, as he says himself, ‘give his head a rest from cows, grass, milk prices and weather’.

Farmer B is in good physical shape with none of the aches and pains of Farmer A. For him, farm profit is just one of a number of barometers of his farming success. He would give equal importance to having good mental and physical health, job satisfaction and quantifying how many days he spends off-farm per month. The farm is just a vehicle towards a happy, healthy and varied life for this farmer.

Young, ambitious dairy farmers would do well to consider which guy they would like to be 30 years from now. During difficult periods on dairy farms such as the summers of 2009 and 2012, or last year’s fodder crisis, I observed that guys like Farmer A were miserable as their profits were under attack. Farmer B and his ilk were able to compartmentalise the farms problems, leave them at the farm gate and get on with enjoying the other aspects of their lives.

Farm advisors tend to focus exclusively on farm profit, naively assuming that this is the goal of the farmer too. Of course, it is hugely important but we need to be more balanced in how we define the success or otherwise of our farms.

Muckit

Did you not post this before?

Justjens

Work to live not live to work;)

blackdog1

milkprofit wrote: »

Agriland recently reported on a Teagasc Dairy Expansion seminar where it was stated that ‘If you’re not farming for profit, we’d like to wish you well with your hobby’.

An interesting statement, but one that implies that profit is the only measure of success for a dairy farmer. Many dairy farmers are very busy chasing profits without understanding why. Are they chasing profit for profit’s sake? Farmers need guidance regarding how much profit they need from their business and for what purpose.

A profitable farm is rarely an end goal in itself, rather a stepping stone towards other bigger goals. This appears to have been forgotten. We need to develop a wider range of ways to measure farm success. Most farm comparisons only measure farm financial performance and the technical data that correlate strongly to it. While these will always be hugely important, they don’t acknowledge the long-term goals or objectives of many farmers.

Consider Farmer A. He is one of the most profitable farmers that I know. His technical ability and farm financial figures are held-up as something the rest of us can aspire to.

Farmer A has worked hard for over 40 years developing his business. He uses little or no hired labour, does his own hoof paring, AI and the majority of tractor work. These choices contribute hugely to keeping his costs low and his profits high. As a younger man, he was heavily involved in sport, but has drifted from that over the past 20 years as he has been working long hours most evenings and weekends.

A combination of sports injuries and long hours has left him in poor physical health now. His grown-up family, seeing the ongoing punishing schedule their father undertakes, combined with his physical ailments, have chosen not to get involved in the farm, despite it being hugely profitable. Is Farmer A a successful farmer? Would any of our young turks currently busting a gut to enter or expand in dairy farming genuinely aspire to be where he is 40 years from now?

Now consider Farmer B. He too is very strong technically. Running a very compactly-calving herd, with a strong emphasis on grass management, he has developed a very solid and consistently excellent system over his 30 year career.

Yet, his profits are not in the top 10%, or even the top 25% – something for which I and others often criticise him. On spending more time with this farmer you soon learn that he is very happy with the profit levels the farm is delivering. His hired labour and contracting bills are considered excessively high, as he has no machinery of his own apart from a quad and only does five milkings himself per week. All machinery work is done by contractors, including winter feeding and all fertiliser spreading. He takes regular and long holidays with his family including numerous weekends away during the year. He is involved in a variety of sporting and cultural organisations in his community but interestingly none are farm-related as he actively seeks to broaden his horizons beyond agriculture to, as he says himself, ‘give his head a rest from cows, grass, milk prices and weather’.

Farmer B is in good physical shape with none of the aches and pains of Farmer A. For him, farm profit is just one of a number of barometers of his farming success. He would give equal importance to having good mental and physical health, job satisfaction and quantifying how many days he spends off-farm per month. The farm is just a vehicle towards a happy, healthy and varied life for this farmer.

Young, ambitious dairy farmers would do well to consider which guy they would like to be 30 years from now. During difficult periods on dairy farms such as the summers of 2009 and 2012, or last year’s fodder crisis, I observed that guys like Farmer A were miserable as their profits were under attack. Farmer B and his ilk were able to compartmentalise the farms problems, leave them at the farm gate and get on with enjoying the other aspects of their lives.

Farm advisors tend to focus exclusively on farm profit, naively assuming that this is the goal of the farmer too. Of course, it is hugely important but we need to be more balanced in how we define the success or otherwise of our farms.

What does the wife do for living in farmer B's case? Maybe she has a good job and he doesn't need the job.

Gillespy

Article would have worked better with less extreme examples of two farmers.

frazzledhome

I showed it to my missus and her reply was "if you were farmer B, you'd be divorced"

As Gillespie says very extreme examples. It depends on what you're working towards. I'd actually know more farmers in the top 10% that'll never miss a family or community event simply because they are totally focused and organised

mf240

Never seen a trailer after a hearse yet. Ya cant take it with ya.

stanflt

Are the most successful not farmer a with farmer b lifestyle because a successful person knows the value of delegation

Farmer a is only a dictator and can't rely on anyone else

If your willing to share your skill other people will share theirs with you

Sorry for going off topic

moy83

mf240 wrote: »

Never seen a trailer after a hearse yet. Ya cant take it with ya.

Did you hear the one about the solicitor putting a cheque into the coffin of the lad that wanted to take all his money with him

keep going

I have a theory that a farm will make a certain amount of money with any sort of half decent effort but ask it to make 10 % more would take 40 % more work.but if there are needs for to make 10% extra then it has to be done otherwise the whole thing is b#ll#cked.usually people wh o pose this question are comfortably off whereas people who owe a bit of money have to get on with it

Coonagh

I actually got annoyed when I read this article reason being all farmers were farmer A at some stage they had to be, starting/expanding business takes massive commitment, long hours, investment and sacrifice. That's where I am at the minute and tbh honest it's been tough going at times but I am working towards a farmer B type situation. Starting or expanding a business is a risky thing to do and the best way to offset that risk is too work bloody hard at it. People need to remember that anything worth having never came easy.

Greengrass1

Its a very good artical. I showed it to my parents and they couldn't understand why someone wouldn't do there own work. There still in the mode if having to do everything themselves. There so used to working and never taking a break or holidays . it has taken them the yr since I came home to start realising that they can actually going off and not have to worry.
The way it is now. I'm up at half 6 and do milking/calves. father gets up around 8 gets his breakfast and heads off to look at yyoungstock.
Stan is dead on in what he says. Its more about sharing work and becoming a better farmer.
If you try do everything things won't get done right

Gillespy

Who's to judge anyway? It's like with the IHFA open day, it's so clinical, c/l, solids per cow delivered etc or nothing. Or the lad doing his own silage. It's not unreasonable to believe some get enjoyment out of their work even if it looks like slavery from the outside. I've seen almost all everyday jobs and the word torture close by on here so who knows what's acceptable these days.:)

JeffKenna

It's all relative. If farmer A has for example 100 cows and farmer B has 500 then farmer B is the more successful and profitable by default. To be fair to farmer B his operating a very flexible system in that all costs seem to be variable thus if he ran into trouble he could cut them quickly as opposed to fixed costs like machinery loans farmer A might have.

Hopefully farmer B has a mistress on the side to occupy his time! He seems like the kinda fella that would!

quietsailor

keep going wrote: »

I have a theory that a farm will make a certain amount of money with any sort of half decent effort but ask it to make 10 % more would take 40 % more work.but if there are needs for to make 10% extra then it has to be done otherwise the whole thing is b#ll#cked.usually people wh o pose this question are comfortably off whereas people who owe a bit of money have to get on with it

There's a law that seems to get applied to nearly everything in life - the 80/20 rule - 20% of the effort gets you 80% of the profit but it takes the final 80% effort to achieve the final 20% profit. The numbers may vary but you get the idea

Here's a link to it but it's heavy going,

milkprofit

JeffKenna wrote: »

It's all relative. If farmer A has for example 100 cows and farmer B has 500 then farmer B is the more successful and profitable by default. To be fair to farmer B his operating a very flexible system in that all costs seem to be variable thus if he ran into trouble he could cut them quickly as opposed to fixed costs like machinery loans farmer A might have.

Hopefully farmer B has a mistress on the side to occupy his time! He seems like the kinda fella that would!

Is that Good or Bad

blue5000

I think it's all down to management ability, with time management being the most important, after all it is the ultimate commodity. I know both types, I'm sure we all do, and by and large the farmer B types are more successful in the long run. Farmer A types have families who they hardly even know, nevermind talk to. I was a farmer A type in my 20's I bloody well had to.

rangler1

blue5000 wrote: »

I think it's all down to management ability, with time management being the most important, after all it is the ultimate commodity. I know both types, I'm sure we all do, and by and large the farmer B types are more successful in the long run. Farmer A types have families who they hardly even know, nevermind talk to. I was a farmer A type in my 20's I bloody well had to.

Like wise here, a lot of farmers had to be. I look back now sometimes and wonder was it worth it.
Lifestyle rules here at the moment

JeffKenna

milkprofit wrote: »

Is that Good or Bad

I suppose that depends on one's own morals.

grumpyfarmer

milkprofit wrote: »

Agriland recently reported on a Teagasc Dairy Expansion seminar where it was stated that ‘If you’re not farming for profit, we’d like to wish you well with your hobby’.

An interesting statement, but one that implies that profit is the only measure of success for a dairy farmer. Many dairy farmers are very busy chasing profits without understanding why. Are they chasing profit for profit’s sake? Farmers need guidance regarding how much profit they need from their business and for what purpose.

A profitable farm is rarely an end goal in itself, rather a stepping stone towards other bigger goals. This appears to have been forgotten. We need to develop a wider range of ways to measure farm success. Most farm comparisons only measure farm financial performance and the technical data that correlate strongly to it. While these will always be hugely important, they don’t acknowledge the long-term goals or objectives of many farmers.

Consider Farmer A. He is one of the most profitable farmers that I know. His technical ability and farm financial figures are held-up as something the rest of us can aspire to.

Farmer A has worked hard for over 40 years developing his business. He uses little or no hired labour, does his own hoof paring, AI and the majority of tractor work. These choices contribute hugely to keeping his costs low and his profits high. As a younger man, he was heavily involved in sport, but has drifted from that over the past 20 years as he has been working long hours most evenings and weekends.

A combination of sports injuries and long hours has left him in poor physical health now. His grown-up family, seeing the ongoing punishing schedule their father undertakes, combined with his physical ailments, have chosen not to get involved in the farm, despite it being hugely profitable. Is Farmer A a successful farmer? Would any of our young turks currently busting a gut to enter or expand in dairy farming genuinely aspire to be where he is 40 years from now?

Now consider Farmer B. He too is very strong technically. Running a very compactly-calving herd, with a strong emphasis on grass management, he has developed a very solid and consistently excellent system over his 30 year career.

Yet, his profits are not in the top 10%, or even the top 25% – something for which I and others often criticise him. On spending more time with this farmer you soon learn that he is very happy with the profit levels the farm is delivering. His hired labour and contracting bills are considered excessively high, as he has no machinery of his own apart from a quad and only does five milkings himself per week. All machinery work is done by contractors, including winter feeding and all fertiliser spreading. He takes regular and long holidays with his family including numerous weekends away during the year. He is involved in a variety of sporting and cultural organisations in his community but interestingly none are farm-related as he actively seeks to broaden his horizons beyond agriculture to, as he says himself, ‘give his head a rest from cows, grass, milk prices and weather’.

Farmer B is in good physical shape with none of the aches and pains of Farmer A. For him, farm profit is just one of a number of barometers of his farming success. He would give equal importance to having good mental and physical health, job satisfaction and quantifying how many days he spends off-farm per month. The farm is just a vehicle towards a happy, healthy and varied life for this farmer.

Young, ambitious dairy farmers would do well to consider which guy they would like to be 30 years from now. During difficult periods on dairy farms such as the summers of 2009 and 2012, or last year’s fodder crisis, I observed that guys like Farmer A were miserable as their profits were under attack. Farmer B and his ilk were able to compartmentalise the farms problems, leave them at the farm gate and get on with enjoying the other aspects of their lives.

Farm advisors tend to focus exclusively on farm profit, naively assuming that this is the goal of the farmer too. Of course, it is hugely important but we need to be more balanced in how we define the success or otherwise of our farms.

Personally I'd prefer to be somewhere in the middle of these 2 extremes.. Everybody who judges somebody else's success is doing so using their own yard stick and natural bias..

JohnBoy

Depends on what you want from life.

if you want more money you're gonna have to do more work. But if you have enough money then you can afford to do less work. how much money is enough is up to you.

Our farming dream would be to setup at once a day milking. if we could clear 20k a year for my wife to work from 9-2 monday to friday with me doing at least half the weekends then we'd be quite happy with that.

whether that would involve a couple of years of being farmer A first or not is another question.