Key factors in success
Business skills are crucial to highperforming and profitable farms, new research from DairyNZ shows. The research covered 150 dairy farms in Waikato and Canterbury, and identified the key characteristics of the top-performing farms.
It took the top quarter of farms surveyed, ranked on operating profit per hectare, and identified their common characteristics.
‘‘It’s not animal husbandry, feed or people management – the biggest skill gap is in the business area,’’ DairyNZ economist Matthew Newman said.
Topping the list of seven characteristics is benchmarking, where farmers use resources to measure their performance against other farm businesses.
‘‘Benchmarking is definitely the No 1 characteristic associated with the top farms. It came through as very statistically significant in the research results,’’ Newman said.
Next is budgeting, with 85 per cent of farm managers in the top quarter of farms surveyed more likely to have a budget.
They were also more likely to check actual expenditure against expected expenditure, and to buy supplies only as required.
Third on the list is confident decisionmaking. ‘‘The farm managers were more likely to run their farm the way they want to, regardless of what others said. The top quartile managers also found planning easier and were less likely to use an adviser or business planner.’’
Networking is No 4, with farm managers in the top farms more likely to catch up with other farmers to swap ideas, to help other farmers improve their practices and to be a source of advice.
Fifty-nine per cent also took part in DairyNZ discussion groups.
At No 5, having couples as managers is an important factor in farm performance, with a greater proportion of the top quartile farms managed this way. At No 6, managers of top quartile farms were more likely to have a dairying background.
‘‘Experience proved to be a significant factor in the most profitable dairy farm businesses. Based on the farms’ operating profit per hectare, the results showed that a higher proportion of the high-performing farms had managers with more than 15 years’ experience in dairying,’’ Newman said. ‘‘Top performers were also likely to have a family background in dairying, growing up on dairy farms during their school years.’’
Rounding out the top seven is reliable plant and equipment, with 55 per cent of the top farms more likely to describe their dairy shed as more up-to-date and reliable than average in their district.
DairyNZ strategy and investment leader Mark Paine said the research was significant.
‘‘We know that benchmarking is really important. That emphasises the importance of making benchmarking simpler to use and a better fit with how farmers prefer to do it,’’ he said.
LEADERS: Findings detail the factors of topperforming farms.