Dairy Farm Business Analysis
Farm owners and share farmers who have access to farm finance figures and the ability to make changes on their farm. The course is ideally suited to those who have previously benchmarked their business in some form, but previous benchmarking is not a pre-requisite.
GOALS OF THE COURSE
To enable people involved in a dairy business to ‘assess’ the business – long-term and short-term perspectives
- To know the right questions to ask of a business’ financial figures and how to get the right answers when reading financial reports.
A Dairy Farm Business Analysis activity has been developed for farmers, based around the DairyBase online program. It is conducted over 3 days.
Day 1 focuses on foundation principles - the factors affecting profitable dairy farming
- Day 2 teaches the mechanics of DairyBase – completing the input sheet and entering the data
- Day 3 examines case studies already in DairyBase including sometimes your own reports
The reason for undertaking an annual business analysis is to provide meaningful data on historical performance that can be also be used as a solid base to make future decisions.
The volatility of the operating environment and the increasing complexity and diversity of dairy farm businesses make it more important for managers to understand the individual performance of their business.
We rarely know if a business is really operating well without undertaking analysis of the business eg a farm that doesn’t look flash can be profitable.
The use of annual business performance data will depend on the question that is being asked.
This workshop is about linking the ‘getting the big picture settings right’ (eg how many cows do I milk, how exposed should I be to the purchased feed market and to debt) with the day to day decisions (eg should I feed another kg of grain per cow, should I put on 80 or 100 kg / ha of urea).
DairyBase is a tool that provides a sound analysis of annual performance. However, we want participants to question what is behind the numbers, what are they based on and how are they calculated. We don’t want participants to treat DairyBase as some kind of magic black box.
We want participants to understand the limitations of DairyBase, in particular that DairyBase generates average values as they are calculated from the total output divided by the total input (e.g. kg MS / cow). This means DairyBase is not the appropriate tool to predict potential increases in profit as a result of a change in management. We need to use different tools that include marginal thinking, marginal analysis and partial budgets.
RESOURCES THAT WILL BE USED
Expressions of interest
For information and course dates, please contact DairyTas on:
Phone: 6432 2233
More DairyBase information available from the Dairy Farm Business Analysis Fact Sheets page.