AHDB updates characteristics of top performing dairy farms analysis

Financially top-quartile dairy farmers, typically make over £120,000 per year more than the bottom 50% of dairy farms.  With falling milk prices and consolidation in farm numbers understanding how to optimise business performance is more critical than ever. The report identifies common actions that a dairy farmer might take to become among the best performers.

The full report can be found here: THE CHARACTERISTICS OF TOP-PERFORMING DAIRY FARMS IN THE UK – 2024 UPDATE

Key findings:

1. Keep a ruthless focus on cost control

Top performing dairy farmers keep costs at a minimum without impacting output or milk quality. This is a top imperative for commodity farming and in many respects, the other actions feed into this one crucial driver of financial performance.

2. Calculate what your most efficient stocking rate is then make sure you get to it

As margins are tight maximise output. This is not per cow necessarily, as their numbers can be increased, but per hectare. Whilst there will be an upper limit, higher performers in general get more farming output from each productive hectare, usually with higher stocking rates.

3. Concentrate on what you are best at – including your farm system

Keep a focus on dairy farming, know your dairy-farming system, and spend less time with other livestock enterprises for example.

4. Know exactly what the market requires and make sure you produce exactly that

The best dairy farmers are paid an extra 1.7p/l over the lower performing producer. Keep milk clean and drive your farm system to produce the constituent parts that your milk processor requires.

5. Know what you and the management team wants to achieve

Knowing what you want to achieve is important so you know when you have got there and when to celebrate. Have a short-term focus (budget) and a long term business plan. Build in your and other key people’s wishes and share the plans with those who can help you achieve your dreams.

6. Keep a very close eye on detail

The devil is always in the detail. Keep a close eye on key performance indicators that might flag an early warning if something is not quite right. Whilst it is impossible to know every little detail of your farm business, it is important to be able to see when they go wrong.

Finally, farming is an industry that provides far more than simply financial rewards, offering a way of life that most would not swap. Most farmers are hard-working, a necessity for success, but to raise performance requires change which often involves bravery and self-belief to do well. Focus on the things that make you and your business partners happy, but within that, make sure that your business is viable.

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