Burying your head in the sand when things get difficult is a common reaction to a sudden change in the environment - but this tactic won't help dairy farmers manage through the recession which is engulfing them reports LIC. The advice comes from one of New Zealand's most successful dairy farming couples, Peter and Karen West, of the Hauraki Plains, who have made some pragmatic and strategic decisions post the reduced payout from Fonterra. "Farming has always been a long term thing, so when things get tough the trick is not to panic but to take charge of the situation. "Communication is key, we saw our accountant and bank manager, re-did our risk analysis and have planned for the next two or three years." "We looked at a lot of different scenarios when re-doing our budgets and planning. We decided what costs could be cut and considered all our options. "Staff is an area that can be tweaked "“ however, for us the risk of losing what you might gain/save in wages, is lost in terms of increased time spent getting the job done. Also for us it is important to have a pool of good people around us when things improve. "Trying to avoid, ignore or hide from problems resulting from the reduced milksolids payment is not the solution," Peter says. "We looked at a lot of different scenarios when re-doing our budgets and planning. We decided what costs could be cut and considered all our options. "Staff is an area that can be tweaked "“ however, for us the risk of losing what you might gain/save in wages, is lost in terms of increased time spent getting the job done. "Herd testing is another management tool we're not prepared to sacrifice. As a breeding tool herd testing's a necessity - the value it generates justifies the investment. We've always done four herd tests a year and have never been inclined to cancel the last test because that's virtually free given that four tests qualify for a 5% discount - so cancelling the last test would be false economy. "When it comes to mating, we've always done six weeks of AB and will continue to do that. The quality of our herd means any surplus heifers are always in demand and that's not going to change."
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