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LEARNING FROM THE BESTRESULTS FROM INTERVIEWS WITH 20 OF THE BEST PERFORMING DAIRY FARMERS IN DENMARK
SCANDIC PARK HELSINKI,FINLAND, SEPTEMBER 3RD 2015
SENIOR ADVISER ULRIK TOFTEGAARD JENSEN, CAND.AGRO SEGESTEAM FARM MANAGEMENT – CATTLE PRODUCTION [email protected]
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WHY IS IT RELEVANT?
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ABOUT THE PROJECT
1. Mapping of best practices
2. Comprehensive survey of farmers who are
continually among the best, measured on the
bottom line (ROA, Farm Assets – Return on
Farm Assets)
3. Knowledge from the project is used to lift the
other producers
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PARAMETRES/QUESTIONS
1. Strategy
2. Personal leadership
3. Production and economic planning
4. Motivation and values
5. Family life
6. Inspiration, sparring and use of advisors
7. Check value of the production facility
welfare, logistics and routines
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SELECTION OF THE 20 CATTLE FARMS
1. Milk producers
- 80 % of the gross income must come from cattle or
forage production
2. Looking ahead: do not run attrition strategy
3. Over 150 cows
4. Equity to assets ratio, solidity of at least 10 % from
2011 to 2013
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WHO ARE THEY?
Scale of production
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WHO ARE THEY?
● 18 one-man owned, 2 partnership
● 7 free trade, 7 partnership with former owner and 6
family trade
● Age: from mid-30’s to mid-50’s
● 10 milking parlours, 5 robot milking, 3 carousel, 2
with milking parlours and robot milking
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TO WAYS TO PROFIT
Contribution margin - ”Demand to contribution
margin” = profit
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CONTRIBUTION MARGIN, CATTLE
Gross income, Cattle
● Milk, beef sale, net sales of livestock, real
and price changes of livestock
- Unit related costs
● Feed costs, vet & med. breeding, cattle
advice and other cattle related costs
= Contribution margin
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DEMAND TO CM = CAPACITY COSTS +
CAPITAL COSTS
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Contribution margin - ”demand to contribution margin” =
profit
TWO WAYS TO PROFIT
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2. Yield max
(Gross income, cattle (milk,
livestock and beef sale) DKK
per cow > 30,000 DKK =
YIELD MAX
1. Low cost
Demand to margin, cattle <
11,000 DKK per cow =
LOW COST
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BALANCE IN THE FARM ECONOMY
(2011-2013)
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LOW COSTS
● KISS – keep it simple stupid
● High capacity utilization
● Cost efficient supply chain (make-or-buy)
● Conservative investments strategy
● Sharp eye on the input prices (bargain
with supplies)
KEY SUCCESS FACTORS
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YIELD MAX
● Extraordinary good animal welfare
● Optimal facilities for the cows to perform
● Highly skilled and dedicated workforce
● Contentious focus on the qualities of feed and
other input factors
● Long time relationship with few trusted
suppliers
KEY SUCCESS FACTORS
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THE FACILITIES ARE WELL UTILIZED (1)
The barns are neither new nor very old,
typically built between 1997-2004 and extended
five years afterwards.
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They exploit the framework they have
- and they do it very well
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THE FACILITIES ARE WELL UTILIZED (2)
Most of them
● At least one cubicle per cow
● Have cow and calves mortality below the
Danish average
● They can improve their disease prevention
● Are very aware on claw health and to check
lame cows immediately
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THE FACILITIES ARE WELL UTILIZED (3)
Most of the farmers…
• Cows and heifers are calving in common calving boxes
with low stocking density
• They are especially alert on first calf cows
• They give colostrum before 6 hours after birth
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They exploit the framework they have
- and they do it very well
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HOW ARE THE BEST?
a. Competence and history
b. Leadership
c. Visions and strategy
d. Inspiration and sparring
e. Financial and management
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A. COMPETENCE AND HISTORY
● Very passionate about dairy farming
● Limited formal leadership training
● Working 60 - 70 hours per week
● Act strongly (powerful) and flexible
● Conscious of their own strengths and weaknesses
● Adept at their craft - cows
● Motivated by the results of benchmarking
● Business acumen
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WHO DO YOU BENCHMARK AGAINST AND
WHAT MOTIVATES YOU?
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B. LEADERSHIP
● Flat structure
● Training of employees: "follow me" method
● High degree of delegation of responsibility
● Participation in everyday life: presence
● Good relations with employees
● Handling and attitude – walk the talk
● Motivating employees – approval & recognitions, empowerment, salary, bowling
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LEADERSHIP - ADJUSTING
● https://www.youtube.com/watch?v=GQm5P2KypeE
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C. VISIONS AND STRATEGY
● There must be harmony and balance
● Low cost vs. yield max
● Clear strategies with focus on the bottom line
● An inner strategic compass – gut feeling
● A large herd size is not a goal in itself
● Focus on cows – outsourcing of field work
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D. THE SOURCES OF INSPIRATIONS AND
SPARRING
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E. GREAT OPERATIONAL AND FINANCIAL
MANAGEMENT
● Well-planned and systematic workflow
● Excellent overview over the production and
the farms economy
● Use of key performance indicators (KPI)
● Clear communication about the farm goals
● Huge involvement of the staff in the goals of
the farm
● Sharp follow-up on the KPI
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TENDENCY BY MORE THAN 300 COWS
● Greater focus on
delegation of farms with
more than 300 cows
● They have learned to
delegate (others are
afraid of the size > 300
cows)
● Biggest challenges:
- Management of staff
- Time for family life
0
2
4
6
8
10
12
< 270 cows > 270 cows
Only danish
Foreign anddanish (mixed oronly foreign)
The employee nationality
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FARM INVESTMENTS (AVERAGE 2011-2013)
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CLEVER INVESTMENTS
● Did not buy land during the bubble (2005-2008)
● Solid investment calculation (NPV and pay back
time)
● Always has a maximum bidding price
● Strength to say NO
● Gut feeling is important
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”If I can't sleep at night - I am not doing it”
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SUM UP
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HERE THEY ARE ESPECIALLY GOOD
● Excellent overview over the production
● Conscious of their own strengths and weaknesses
● Staff management
● Planning and organization of the daily work
● Business acumen (no new tractors, thorough
preparation before any investments, strength to say
no)
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BIGGEST CHALLENGE FOR THE 20 BEST
● Staff management
● Time for family life
● Public bureaucracy and control
● Delegation (afraid of losing control)
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IMPORTANT LESSONS
1. They are not good at all things
2. But very aware of their strengths/weaknesses and uses them strategically
3. Strategy is not something they have – but something they do!
4. Alignment between attitude and actions – walk the talk
5. Important to make tough decisions – early
For example:
● Weak calves
● Employees - there has been trouble with several times
6. Leadership – you can always improve
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POTENTIALS FOR FARM ADVISERS
● Advisers, who have the courage to go (even) closer
and tell the truth ”push me – not please me”
● HR-support
● Leadership training
● Elite discussion groups (national or international)
● Inspiration from great leaders from other trades
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REFLECTION (5 MIN)
1. Find 1 or 2 things from the two
presentations you find interesting
2. Consider what the biggest obstacle is
for you to carry it out (who can support
you)
3. Please tell it to your neighbor
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SMILE AT THE WORK TASK
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PERIODIC TASK
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THE GOOD JOB START (BEFORE HIRING)
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THE GOOD JOB START (AFTER HIRING)
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THANK YOU FOR YOUR ATTENTION
YOU CAN DOWNLOAD THE REPORT AT
WWW.ARBEJDSPLAN.KVAEG.DK
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