Good practical advice on cost savings

There are no silver bullets for cash-strapped dairy farms but SIDE workshop presenter Marv Pangborn suggests scores of small savings which can add up to a solution. "˜If you came here looking for silver bullets you are going to be disappointed because there are none,' says Pangborn, who stresses the need for good farm management in such times reports The Rural News. It is all about planning, implementation and monitoring and a farm should have a mission or objectives statement to set the philosophy under which it operates, he says. "˜A low cost of production itself doesn't guarantee survival,' he adds, alerting delegates to account for debt servicing, tax, drawings and capital expenditure (if any).To keep expenses down Pangborn says:Get quotes and monitor contractor work. Engage contractors in the search for savings. Shop around for all inputs. Feed: know supplement and feed out cost, utilisation and response. Heed 5% of payout guide. Regrassing: use Pasture Renewal Calculator to determine payback, consider direct drilling, and is the latest cultivar and full seed rate really necessary? Animal health: are all vaccinations, parasite controls, dry cow treatments, reproductive technologies really necessary?Consider less AB and only two herd tests. Are all heifers needed? Could retaining high PW carry-over cows be an option? Look at Minda Link recording if Minda Pro isn't used to full. Heed diminishing return of N fert and consider possible P cuts (caution). Investigate night and weekend electricity rates; Soil moisture meters can cut irrigation costs; Check repairs and maintenance "“ "˜grease and oil are cheap.' Share machinery; look at options eg motorbikes v small trucks. Is staff fatigue adding to breakdowns? On the income side, in-calf cow sales, colostrum and off-farm earnings can prove worthwhile but the big one remains conversion of pasture to milk. "˜Results still show 30% of pasture in NZ is unused.' Debt and financing costs also need to be addressed. Rules of thumb are a maximum 50% debt to asset ratio "“ "˜in the US the average is 9.1%' "“ and debt servicing (ie interest) should be no more than 25% of income, ie, at $5.20/kgMS no more than $1.30/kg MS. Farms over those guides should consider "˜de-leveraging', selling assets or introducing equity, and, if possible, reducing interest rates, perhaps by capitalising "˜hard core' overdraft debt. As for tax, the accountant can be the farm's "˜best friend' in such circumstances.