Diversifying helps dairy survive

24 Apr, 2017 11:07 AM
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It was well worthwhile to be able to monitor and know exactly where your business is...

DIVERSIFYING their business helped South Australian dairyfarmers Lorraine and Brian Robertson remain in the industry when dairy giants Murray Goulburn and Fonterra dropped prices to below the cost of production in 2016.

For seven months the Fonterra suppliers say they “didn’t see a milk cheque” as the equity in their business dropped by $200,000.

A week before the price crash, the Robertsons had signed up to participate in the pilot program of Rural Business Support’s Dairy Farm Business Strategic Review. They credit the review, and the ongoing help of RBS Dairy Analyst Lachlan Hood, with helping them ‘crunch the numbers’ to remain profitable.

“We managed to survive but it was in a state of shock and with huge emotional turmoil,” Mrs Robertson said.

“With the help of the Dairy Farm Business Strategic Review, we have managed to move on from there. The program helped us to have the confidence to go to the bank and we’ve changed our outlook significantly since.

“Working with RBS meant we were able to demonstrate what our financial position had been and what it could be. We ran through all of the different possibilities and strategies and used them as a sounding board to work through the options.

“I would recommend the program to any dairyfarmer. There are so many benefits whether you’re looking at succession, expanding or upgrading. It was well worthwhile to be able to monitor and know exactly where your business is, and where you want it to be. It’s an amazing opportunity for people, especially as the program is also free.”

The Robertsons leased a centre pivot and water to a sharefarmer to grow seed potatoes, sold beef-cross calves and halved their herd of dairy cattle to 150 milkers, retaining the Normande portion of their herd and selling their Swiss Brown cows.

Leasing the centre pivot which was the farthest from the dairy had flow-on benefits as cows no longer had to walk as far to the dairy, which maximised milk productivity.

“It was very hard to part with them,” Mrs Robertson said. “But, many people knew we were going to be selling them through the Warrnambool Livestock Auction, and as people don’t often sell Swiss Browns, there were a lot of people after them. After the sale, a lot of people who had bought them got in touch through Facebook, so we were able to see they had gone on and done well, which made us happy.”

A relatively rare breed of dairy cattle in Australia, the Normande produces high protein A2 milk and BB Kappa-casein, which is sought after in cheesemaking. The Robertsons have spent many years building up their herd of Normandes and will look to show stud cattle and sell embryos in future.

SA Dairyfarmers’ Association President John Hunt was a participant in the pilot. He recommended it to all dairy families.

The Dairy Farm Business Strategic Review is a joint initiative between DairySA, the SA Dairy Industry Fund and Primary Industries and Regions SA developed and implemented by Rural Business Support to help dairyfarmers establish business plans for their future.

RBS Chief Executive Officer Brett Smith said registrations were still open in South East South Australia and he encouraged families to consider participating.

“We had great success with the pilot program, with dairyfarmers involved saying it was a great way to evaluate and set out specific and tailored plans, providing those involved with goals, deadlines and the confidence to move forward,” Mr Smith said.

Contact: Phone (08) 8364 2577 or email executiveassistant@ruralbusines ssupport.org.au to join the program. For more information visit www.dairysa.com.au or www.ruralbusinesssupport.org.au.

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