A new approach to dairy systems

Published 8 September 17

Page 3 Tom Hind , AHDB Chief Strategy OfficerTom Hind, AHDB Chief Strategy Officer

A key focus of AHDB’s work this autumn will be helping our industry gear up for Brexit. Whatever your views on Britain leaving the EU, for any business, it is prudent to prepare, think ahead, understand different scenarios and have a plan.

And while there are undoubtedly opportunities, there is also the likelihood that the British dairy sector will be open to more competition, less support and increased volatility.

Although the liquid milk market provides some insulation, our industry has to compete in a European and increasingly global market. Competitiveness, by controlling costs, will be more crucial than ever.

The promising story is that the best British dairy farmers can compete with the best in Europe. But the range of performance and systems that farmers appear to employ could well be barriers to succeeding in this very rapidly changing world.

Our sense is that those farms that focus on a clearly defined production system tend to be more profitable and competitive. Many of our competitors around the world have built dairy sectors by focussing on a much narrower range of production systems, with clearly defined KPIs, tools and programmes that support producers.

Therefore, taking into account our new strategy, AHDB Dairy will focus our future work around production systems – inspiring dairy farmers to understand what system is best for them, their market and giving them the tools to operate that system to the best of their ability.

Fundamentally, British dairying falls into two systems:

  • Block calving where all cows calve within a 12 weeks window
  • All year round (AYR) calving with seasonal emphasis on calving

Block calving herds typically have lower overall costs of production, can be simpler to operate and can have lifestyle benefits, depending on land suitability, housing and location.

The best AYR producers can achieve production costs comparable with block-calving and higher output can bring greater income. But the system can bring complexity making it harder to spot weaknesses in performance.

Our job isn’t to tell farmers which system is best, let alone make the choice for them. But it is to inspire the industry to succeed by helping farmers to determine what system they are currently on, help them hold a mirror up to themselves and then give them the tools to make a positive choice about what system is best for them.

Currently 80% of dairy farmer say they produce milk all year round, which begs the question as to whether this is optimum for the industry as a whole to operate at its most competitive. This is a debate we need to have. Many dairy farmers will say their milk contract is a barrier to moving toward block calving. It’s certainly the case that our processing sector needs a relatively level supply of milk.

But does this require an approach where farmers are pushed into level supply and all year round calving? We think a more flexible approach could achieve the same result whilst helping more farmers to adopt the system that might be best for them.

Irrespective of system AHDB will showcase and highlight the best performers and what is achievable through inspiring excellence in both production systems, by:

  • Identifying the KPIs that are critical to performance under either system
  • Rolling out strategic dairy farms operating both systems to demonstrate best practice and encourage farmer to farmer learning
  • Incorporating research projects common to producers, as well as system specific
  • Enabling farmers to benchmark using our new Farmbench tool
  • Providing relevant market intelligence tools and analysis
  • Assessing the impact of switching system and support farmers based on their choice

The key thing is that farmers approach 2019 with eyes open and make conscious, strategic choices to best address potential risks and opportunities. The last thing we want is for the industry to sleep walk into Brexit.

Find out more about Optimal Dairy Systems...