Initial Situation
Having purchased the farm in 2007, the Lishmans decided they needed to strategically assess all aspects of performance to secure the future of the business.
Strategic Review
As the family wanted to stay in dairy farming the strategy determined in 2009 was to drive performance from the flying herd through a combination of optimum cow numbers and performance per cow to increase profitability and ensure loan repayments could be serviced with less impact on net worth.
Strategic Objectives
- Increase cow numbers to meet unit capacity
- Increase production from forage
- Exploit the advantages of the farm such as good grazing platform
- Review and reduce costs in line with production
- Progressive improvement in profitability
- Increase output per cow
- Supply milk in line with customer requirements, including opportunity that existed for additional production
Actions to Deliver Strategy
- Focus on dairying with beef enterprise wound down
- Cow numbers increased by 14%
- Grazing infrastructure improved to allow increased production from forage
- Cow comfort improved – small kennels replaced with straw yard initially. Now yards being replaced with sand cubicles to reduce bedding costs
Technical Results
| March 2008 | October 2015 | |
| Cows in herd | 114 | 130 |
| Yield per cow (L) | 6,933 | 7,393 |
| Milk from forage per cow (L) | 1,473 | 3,738 |
| Concentrate use per litre (kg/l) | 0.34 | 0.25 |
| Other feed cost/cow (£) | 46 | 6 |
| Concentrate equivalent per cow (kg) | 2,808 | 1,826 |
- Herd size increased to 130
- Yield per cow increased by 7% to 7,400 litres
- Production from forage increased by 250% to 3,738 litres per cow (50% of all milk produced). Over 2,650 litre per cow from grazed grass
- Purchased feed reduced by over 1,000kg/cow concentrate equivalent
Financial Results
- Farm turnover increased by 31%
- Gross margin increased by 52% due to more turnover, improved technical performance and cost control
- Profit more than doubled over six years
- Finance charges a more manageable proportion of turnover
Farm Costs Comparative Analysis
| Comparative % | 2015 | 2008 | |
| Turnover | 100 | 100 | 100 |
| Variable costs | 50 | 40 | 43 |
| Gross margins | 50 | 60 | 57 |
| Direct overheads | 29 | 22 | 22 |
| Resource costs | 11 | 18 | 26 |
| Profit | 10 | 17 | 10 |
The Future
Continued focus on driving technical performance. Move to sand cubicles will allow saving on bedding costs and improve cow comfort. Farm is now rearing own replacements which, while affecting cashflow and reducing profits in the short term, will improve genetic merit of herd and increase production.
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