Key fac­tors in suc­cess

South Waikato News - - RURAL DELIVERY -

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.

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