Managing a successful dairy business requires more than monitoring cash flows, planning the breeding strategy and winter feeding regime, said Promar International agri-food business consultant, Neil Adams.
Interpersonal sensitivity, personal flexibility and emotional resilience were equally important according to a recent Promar study of 65 producers in England and Wales that focused on leadership and leader capabilities within their dairy farming businesses and the influence of their emotional intelligence.
It concluded that those with the highest level of emotional and social competence made £739 profit per cow compared with £366 for the average and those in the lowest group, £117.
Those more likely to run more profitable farms were farmers with staff or family teams who had a people oriented personal style combined with a decisive command role. In addition, they:
- tended to be more highly aware of their emotions, strengths and limitations required to lead high performing teams
- were more likely to have trusted advisers whose purpose was to act as a sounding board
- took a longer term perspective on their business plans being clear about their goals over five to 15 years
- paid attention to their own well-being and were more likely to be tolerant of others mistakes
- were more optimistic and likely to trust people, see others as reliable and honest and believe what others said
Similar findings were reported by Ekkehard Herrman, farm manager of four German co-ops with a 6,500 ha mixed operation. His study taking in 200 farm managers, the majority born in East Germany, concluded that both commitment and discipline were key qualities for business success. “The majority believed that personality and work approach of employees is more important for performance than their qualifications and wage levels.”
Richard Price, Lowther Estates’ director of farming and commercial events said management of his four full time farm staff was pivotal to the 1,500 ha estate’s in-hand farming operations. “Our future moving forward to ensure profitability remains king and includes respect and involvement amongst our staff in order to take them with us. I don’t believe in offering bonuses,” he said. “Apart from an annual appraisal, management includes involving them in all aspects of the business from 7am Monday meetings, involvement in equipment purchases and other estate projects, days out to industry events, and introducing them to guests. I also deliver wage slips to their homes which ensures a measure of observation – making sure there is no leaky guttering and so on.”
Leading farm businesses – marginally better at everything
Active business risk management will be absolutely critical for farms to be sustainable and profitable post Brexit, according to AHDB chief executive, Jane King. “A generation of farming businesses haven’t had to actively manage their own risks as the CAP payments have effectively cushioned them.
She reported that AHDB’s own work had shown that the top performing farm businesses were often marginally better at everything, rather than being significantly better at anything.
“The phenomenal, inspirational success of our Olympic cyclists was attributed to incremental gains across all aspects of cycling – from the bike itself, right the way through to the athletes’ diets and their mental preparation.
“Similarly a key part of top performing farm business’ success is their relentless, almost obsessive approach to cost management. As an industry, we already know what delivers results and better profit – so why is it that we still have many farmers, particularly in the livestock sector that still don’t know their cost of production or their performance figures?”
“Now with CAP reform coming and with Brexit, these businesses will need to put a culture of risk management at their heart. Success will require an industry culture change as well as skills to deliver profitability and competiveness, ensure sufficient resilience is in place and find new sources, deliver win/win collaboration and enable commercially driven decision making.”
Busting future food demand myths
Market analyst, Cedric Porter busted the myth that farmers need to step up production in order to feed the spiralling global population. “We need to produce more food in the next 40 years than in the previous 10,000 years combined if we're going to survive as a species has become the perceived wisdom,” he said. “However, the rapid fall in commodity prices prompted me to look behind the headlines and analyse the world food situation.
“For the first time in 30 years, grain stocks have been more than 20% of use in last four seasons running. Prices rise dramatically when stocks fall below 15% and fall over 20%. In the 10 years to 1995, production could not keep up with demand. In last 10 years, production is outstripping demand. Population growth is also slowing down. The increase in world population is less than 1% a year, half of what it was 30 years ago. Furthermore, consumers are also eating less too.
“So will we need more food in the next 40 years than the last 10,000? The short answer is no. By my calculations, the world will need to produce 12.160 billion tonnes of food by 2050. That is 5.035 billion tonnes more than in 2010. That will require 388 billion tonnes of production between 2010 and 2050.
“The Population Research Bureau estimates that over 100 billion people have lived on the planet in the 10,000 years to 2010. If you assume they lived to an average age of 35 and required 500kg of food a year, less than half current volumes, then 1,750 billion tonnes of food was produced up to 2010. That means that the food needed in the next 40 years is 22% of the food produced in the last 10,000 years – an enormous amount, but nothing near the original claim.”
Not just Brexit; 2030 Agenda 17 Sustainable Development Goals requires attention too
The farming sector needs to widen its understanding on the implications of the UN Sustainable Development Goals and how they may impact on future farming methodologies, Barclays head of agriculture, Mark Suthern told the IAGM conference.
“Whilst thinking is firmly focused towards Brexit and its impact on both current and future agricultural strategies, equally important is the 2030 Agenda for Sustainable Development. What would appear to be a pipeline strategy called Transforming our World, it is in fact already reality and requires attention.
“Just over 12 months ago, 193 UN Member States agreed to a New Global Development Framework. The resulting 2030 Agenda consists of 17 Sustainable Development Goals (SDGs/Global Goals) and 169 targets, which commit all signatory countries to take action.
“Unlike their predecessors, the Millennium Development Goals, the SDGs are universal in nature; they are bold, ambitious, interconnected and can only be implemented in an integrated manner.
“In fact, the SDGs officially came in to force on 1 January and the UK is now moving forward by implementing the Goals at home and supporting other countries to achieve them overseas. To measure progress towards these Goals, the UN has agreed a massive 231 SDGs indicators.”
Of the 17 SDGs, the vast majority either impacted or involved UK agriculture and practice. Consequently, as a sector, Mr Suthern argued that it needed to focus on people – leadership management and approach to change; technology - how we adopt and adapt techniques from other sectors to help with for example, robotics, field and yield mapping, drones and weed control together with soil and water management.
“These three inputs are fundamental to all future farming businesses and will enable each to contribute towards achieving those goals which will be influenced by the sector.”
Data will undoubtedly play a significant role in future farm management decision making. Amongst the players, a new data platform is being developed by the Agrimetrics - an Agritech Centre of Excellence founded by the University of Reading, Rothamsted Research and NIAB.
“Agrimetrics is all about helping farmers produce food more efficiently and to better respond to food consumers changing needs,” Professor Richard Tiffin, Director of Science at Agrimetrics
“We are building a data platform that will make it easier to access and use data. In this way, data can become the currency which enhances knowledge of the system we are all part of. Farmers can be reconnected to consumers, they’ll be able to better meet their needs and procure a larger share of the value in food.”
He explained that the £12 million Government funded initiative supported by industry match funding
involved taking data from the worldwide web, exploring that information and connecting it with data from other sources from across the food sector.
“It’s not the actual data itself, it’s the insight that users will gain from that data. For farm managers, they will be able to get a better understanding of market conditions, for example monitor harvest – yield and quality, and then overlay an analysis or market and price trends and in turn connect the entire supply chain.”