Decisions4Dairy cost of production: Reducing labour - a false economy?

Decisions4Dairy cost of production: Reducing labour - a false economy?

After feed, labour is often the second biggest cost to a dairy farm business. Figures from the AHDB Dairy Evidence report GB Dairy herd performance 2014/15 shows that there is can be a marked difference in the labour deployed as can be seen below.

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In times of financial challenges, the temptation is to look to reduce your labour costs as a way to save money. But is this always the right approach and, although you may save yourself money in the immediate short term, are you in fact risking higher production costs in the medium and long term by getting rid of staff? Ian Lindsay of LKL Services takes a look as part of the Decisions4Dairy theme on cost of production.

Compared to Europe and the US, the UK is already stretched when it comes to number of employees it has on farm. Despite similar pay levels and labour costs, farms across Europe would, typically, have one person for every 75 – 80 cows and the US would have one man for every 65 – 70 cows. Here in the UK, we would have more than 100 cows for every man. Farm staff often only have time to do the basics every day such as milking, feeding and emergency herd health work with little time to undertake proactive and preventative herd care. It’s a preventative approach with time to undertake the attention to detail that can have a major positive impact on your margin – especially in times of reduced milk price and so reducing labour isn’t always the smart thing to do but, in some circumstances, it may be a short-term necessity as a last resort. Most people who have reduced or got rid of their paid labour regret it. Simply having the time to get round everything in a day can be pretty tough without a workforce if your herd size and system has previously been reliant on paid labour.

Here’s the other thing, you need time for two crucial areas as the farm owner, areas that even in good milk price years we often don’t give enough importance to – they are time to run your business and time off away from the farm – yes! Time away from the farm (and not to go to a farming show!). Making time to run the business side of things gets even more important in volatile and depressed milk price times. A day in the office negotiating better energy prices, deals with your suppliers and making sure your bank is working for you can be the most profitable time you have that week. Getting away from the farm now and again, taking a break will keep you in a better frame of mind to tackle the challenges you face and, let’s face it, even in the good times, you work hard enough, you deserve some time away! Reducing or getting rid of your staff will make it hard to do both these things.

I’ve got rid of all of my paid labour, what can I do now?

With regret, circumstances have meant that you have had to get rid of your staff, what can you do to make sure the jobs still get done while minimising the pressure on you and the rest of the family? First of all, work out what jobs can be outsourced and what funds are to outsource them. For example, having your fertility work contracted out to a breeding company will make sure there is an extra pair of eyes on the farm every day checking tail paint and undertaking the breeding, the operatives often make you aware of any sick or lame cows they spot as they are doing the rounds and, so, some of the crucial attention to detail is being undertaken without having to pay a full wage. Perhaps feeding the herd can be outsourced to a tractor driver from your local contractors, he could come in before going off to silage and feed the cows with the TMR. Can you outsource your heifer rearing or go to a flying herd to reduce time looking after youngstock? It’s about prioritising and making sure you have the time to undertake the things that matter to your bottom line. 

Is my only option to reduce staff numbers? – How can I get better organised with my labour to perhaps get cost savings elsewhere?

Your only option isn’t to reduce staff numbers and, yes, most farms can get better organised, therefore saving costs elsewhere! Firstly, change your view from looking at your labour bill as a cost and start looking at it as an investment. When you look at it as an investment, you will want to make sure you are utilising that investment! This can be in practical terms such as getting more efficient use of your labour force. One of the biggest tasks we can often make more efficient is milking. Take a look at your milking routine, is it efficient? If we change the order in which we do things or look to change the routine, will this speed up milking? Can we make a few minor adjustments to improve cow flow per side and milking time overall? – More time to do the attention to detail and more time for the cows to be eating and lying down where they really make the milk!

Can we train our staff in mobility scoring so they spot lame cows earlier before the lameness impacts on the margin that cow is bringing in, can they be better trained in heat detection so that fertility improves, are they up to speed with the latest fresh cow care techniques so that returning cows into the herd recover from calving quicker and are in better health to face the lactation. Do they know the preventative protocols to minimise vet and drug use? Asking your nutritionist to spend a little time teaching the tractor driver the importance of getting the diet exactly as specified and in a manner that encourages maximum dry matter intake, also the basic costs of the diet will encourage him to do the best job possible, reduce waste and ensure your cows are getting the diet as specified. All these things and more contribute to reducing the often hidden costs of poor fertility, lameness and feed inefficiency. The savings, however, will show themselves on your bottom line.


As tempting as it may be, reducing labour is more often false economy. You may save some money today but it could cost you far more further down the line. Making maximum use of your labour and ensuring they have the skills and the time to undertake proactive attention to detail is what you should look at first and utilising your labour investment. Speaking with your team and being open about the challenges the farm business faces will help – if done in the right manner – not a “moan” – but by being open with them and asking if they have any ideas on how to make things more efficient. If you have to get rid of some or all of your staff, look at other ways to make sure that not only the basics get done but also the all- important attention to detail and make sure you have time to manage the business and take a breath once in a while.


Ian Lindsay
Regional Contracts Manager (North)
Tel: 07802 596869