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How to survive a recession in dairy

Rural News
How to survive a recession in dairy

Think positively and think long-term - that's the recipe being offered by two prominent Taranaki dairy farmers to help colleagues survive the economic downturn reports The Taranaki Daily news. Kakaramea dairy farmer David Werder and Eltham counterpart Bill Gribble stress that while the circumstances globally may be different from recessions in the past, there is nothing new about farmers having to face hard times. They have done it before - especially in 1986 and 1987 - and there will continue to be recessions in the future. Their advice, which they now offer to other farmers, followed extensive discussions with professionals such as bankers and accountants, as well as with farmer colleagues. Cashflows: Farmers should go through these with their professionals. Once the cashflow has been completed, the farmer should adhere to it. Milk cheques: Money should be put aside from cash generated from milk cheques in February, March and April to act as a financial buffer for the winter and spring months, when cashflows will be very tight. In July and August, there will be only a 10-cent advance and farmers should be aware of this. Tax Liabilities: Farmers should re-visit these with their accountant. Fertiliser: There is an opportunity, that if Olsen P levels are 40 or above, that farmers should consider putting below- maintenance phosphate levels on their farms. The potassium levels must be maintained. However, Olsen P levels should not remain in the low 30s for too long. Autumn feed budgets: Farmers should get them done to avoid getting into a situation where they have to buy in expensive supplements through the winter and spring. Farm improvements: There is an opportunity for farmers to do cheap labour-intensive jobs right now.  Doing maintenance jobs and sprucing up the property will achieve far more than sitting at home and worrying about the situation. Payout: The payout is still volatile and the current Fonterra figure of $5.10 could go up or down. Farmers should be prepared for this. Contractors: Farmers should continue employing contractors - just use them less frequently. These people are needed by the farming industry. Herd Testing: The opportunity exists for farmers to reduce herd testing from four times a year to twice a year. Pregnancy testing: Farmers should consider whether it is necessary to test their whole herd in a season of low payout. Re-grassing: If a farmer's policy was to do a lot of re- grassing this year, perhaps this can be eased back. Dry cow therapy of the whole herd:  The SAM Plan, has been scientifically proven to work and it is an opportunity to save some penicillin costs. Once-a-day milking: If farmers are in a situation where they don't want to exceed their shareholding there is the opportunity of milking once-a- day and spreading milking out until May. This has the added benefit of putting condition on cows. Supplementary feed: This should not be bought in if it causes production to exceed a farmer's shareholding. Keep socially active: All three advice-givers stressed the importance of farmers and their families keeping socially active during tough economic times.

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