The dairy farm has been struggeling for years with a low profit margin. It's almost unimaginable that the dairy farms that barely earn enough with the now historically high milk price, also survived in 2009 when the soil was at barely €17,- per 100kg of milk.
This is because primary production companies are often selling price followers. Their cost price follows the selling price with a delay of approximately 2 years.
The source of this is within the management of the businessmodel. Most dairy farmers wear 3 masks; the entreprenour, the manager and the employee. The more time is spent in de last one, the higher the cost price will be.
Oftwen we look at our income in order to decide if we can invest in something.
The agriculture is a sector where it's popular for people to invest because they don't have to pay things like income taxes.
Expenses and income are two different entities. Thereby I mean that expenses and income have nothing to do with eachother. But because of the 3 masks, mainly the employee, expenses and income become related to each other. In other words, because you're so busy as an "employee" by doing your day to day work, you can lose the focus of being a manager. As a result your expenses will increase and your profit margin will drop.
“Controlling expenses makes a free man.” – Ado Bloemendal
Het is belangrijk je te realiseren dat beheersing van de kostprijs leidt tot een vrij gevoel. Jij hebt het gevoel weer aan het roer te staan en controle te hebben. Dus met andere woorden, bovenstaande statements geven aan dat jij succesvol de macht kunt nemen over de kostprijs en dat dit jouw veel vrijheid gaat geven omdat je dan minder afhankelijk bent van kosten van de input; denk aan concentrates and fertilizer prices that fluctuate.
This is done by realising that there are choices, always!
Recent studies shows that Irish farmers have more than 50% income, that 40% have no loans and that they have more that €0,045/kg more profit margin per liter milk. Their profit margin is double compared to the Dutch farmer.
“Whether you think you can or whether you think you can’t, you are right.” – Henry Ford
In other words; change your businessmodel to one where grazing is in the center of attention and you'll automatically earn more. One where the focus is on expenses per liter of milk.
Now you might think, how?
PG NxT-STEP® Farming is the Nature-inclusive agricultural businessmodel that gives you all the tools and knowledge to succesfully convert to a businessmodel focussed on expenses. Your own added value is very important!
Do you have questions or do you want to talk to one of our experts? Our coaches will help you. https://puregraze.com/pure-graze-coach/
More information can be found here; https://puregraze.com/nxt-step-farming/wat-is-nxt-step-farming/