Business management for tropical dairy farmers

Contents......Page 12
Foreword......Page 6
About the author......Page 7
Other books and technical manuals by the author......Page 9
Acknowledgements......Page 10
Chemical warning......Page 11
1. Introduction......Page 18
1.1.1 Some key points about this book......Page 20
1.2 Outline of the manual......Page 21
1.3 Role of manual in training programs......Page 24
2. What is Farm Business Management?......Page 28
2.1.1 Maslow’s hierarchy of needs......Page 30
2.2 A set of key tasks for dairy farm managers......Page 32
2.2.1 Production technology......Page 33
2.2.3 Business management......Page 34
2.3 Making the best use of service providers......Page 35
2.4.1 Breaking down dairy production technology......Page 38
2.4.2 Developing a hierarchy of business management......Page 39
3.1 The importance of livestock to resource-poor farmers......Page 42
3.1.1 Smallholder dairy farmers......Page 44
3.1.2 What matters to dairy farmers most......Page 45
3.2.1 An historical context......Page 46
3.2.2 The growth of dairy industries in South and East Asia......Page 47
3.2.3 Future projections of demand and supply of milk in South and East Asia......Page 50
3.3.1 Objectives of dairy development......Page 53
3.3.2 Types of dairy development......Page 54
3.3.3 The importance of rural wages and other growth factors......Page 55
3.3.4 Losses in the dairy value chain......Page 56
3.3.6 Strengthening and enabling smallholders......Page 57
4. Feed production technology on smallholder dairy farms......Page 60
4.1 Feed nutrients required by dairy cows......Page 61
4.2.2 Energy......Page 62
4.2.3 Protein......Page 63
4.2.5 Vitamins and minerals......Page 65
4.2.6 Essential nutrients and sources summary......Page 66
4.3.2 Energy......Page 67
4.3.3 Protein......Page 69
4.4 Increasing dairy farm profitability through improved pasture technology......Page 70
4.4.1 Recent sources of information on tropical forages......Page 72
5. Improved herd management on smallholder dairy farms......Page 74
5.1 The lactation cycle......Page 75
5.1.1 From calving to peak lactation......Page 76
5.1.2 The rest of lactation......Page 77
5.2 Persistency of milk production throughout lactation......Page 78
5.2.1 Theoretical models of lactation persistency......Page 79
5.3.2 Marginal milk responses to extra feeding......Page 81
5.3.3 An example of marginal milk responses......Page 82
5.3.4 Immediate and delayed milk responses......Page 83
5.4 Rearing replacement heifers......Page 85
5.5 Reproductive performance......Page 86
5.6 Exotic breeds and crossbreeds for milk production......Page 87
5.7 Describing environmental stress for dairy cows......Page 89
6. The harvesting and marketing of milk from smallholder farms......Page 90
6.1.1 Milk composition......Page 91
6.1.2 Milk quality......Page 93
6.1.3 Examples of two milk grading schemes......Page 94
6.2 Formal and informal milk markets......Page 95
6.3 The role of dairy producer cooperatives......Page 97
6.3.1 Types of services offered by dairy cooperatives......Page 99
7. The base price for raw milk......Page 102
7.1.2 External influences......Page 103
7.2.1 Annual variations in different countries......Page 105
7.2.2 Current farmer returns for fresh local milk......Page 107
8. The importance of record keeping......Page 110
8.1.1 Farm records to keep......Page 111
8.1.2 Livestock records to keep......Page 112
8.1.3 Financial records to keep......Page 114
8.2 Describing the farm’s physical and financial resources......Page 115
8.3 Comparative farm performance or benchmarking......Page 118
9. Categorising farm costs and farm revenue......Page 120
9.1 The costs of farm production......Page 121
9.1.2 Variable costs......Page 122
9.1.3 Opportunity and labour costs......Page 123
9.1.6 Personal expenses......Page 124
10. The key tools of farm business analyses......Page 132
10.1 Balance sheets......Page 133
10.1.1 Assets......Page 134
10.1.3 Equity or net worth......Page 135
10.2 Cash flow records......Page 136
10.2.1 Cash operating surplus......Page 138
10.3.1 Key measures from income statements......Page 139
10.3.2 Anticipating problems by interpreting farm business data......Page 140
11. Measures of farm profit......Page 144
11.1 Quantifying cash and non-cash profit......Page 145
11.2 Quantifying change in farm efficiency......Page 146
11.3 Quantifying wealth creation......Page 149
11.4 Drivers of profit......Page 151
11.5 Assessing the business ‘health’ of Asian smallholder dairy farms......Page 152
11.5.2 Solvency......Page 153
11.5.4 Efficiency......Page 154
11.6 FEEDPROFIT and FARMPROFIT, two computer programs to quantify farm profits......Page 155
12.1 Defining ‘Milk income less feed costs’......Page 156
12.2.1 Introduction to case studies......Page 158
12.2.2 Case study 1: Formulating least cost rations......Page 160
12.2.4 Case study 3: Feeding cows during the dry season......Page 162
13. Feeding decisions driving profit......Page 166
13.1 Determining the optimum herd size......Page 167
13.1.1 Other factors influencing herd profitability......Page 168
13.2 Determining optimum on-farm stocking capacities......Page 169
13.3 Flow charts of feeding decisions that drive profit......Page 171
14. Key performance measures of farm profitability......Page 174
14.2.1 Stocking capacity......Page 175
14.2.2 On-farm forage production......Page 177
14.2.3 Forage quality......Page 178
14.2.4 Concentrate feeding program......Page 179
14.3.1 Proportion of productive cows......Page 180
14.3.3 Reproductive performance......Page 183
14.3.4 Heifer management......Page 185
14.4 Ease of collecting raw data to calculate KPIs......Page 186
14.5 A final word about KPIs......Page 187
15. Budgeting for future farm development......Page 190
15.1.1 Cash development budgets......Page 191
15.1.2 Partial budgets......Page 192
15.2 Steps for a partial budget......Page 193
15.2.1 A case study for partial budgeting......Page 195
15.3 Sensitivity analysis......Page 198
15.4 Accounting for time in a budget......Page 199
16. Risk in tropical dairy farming......Page 202
16.1.1 Business v financial risk......Page 203
16.1.2 External v internal sources of risk......Page 204
16.1.4 Good and bad risks......Page 205
16.2 Strategies for managing risk......Page 206
16.2.1 Analysing risk in farm management......Page 207
16.3 Biosecurity as a risk management strategy......Page 209
17. Case studies of profitable tropical dairy farming systems......Page 212
17.1 Cost of production of dairy farming in Thailand......Page 213
17.1.2 Comments on IFCN methodology......Page 216
17.2 Comparing dairy farm production economics in Thailand and Vietnam......Page 217
17.2.1 General comments on Asian dairy industries......Page 218
17.3 Comparing rural and peri-urban dairying......Page 220
18. Planning and conducting workshops in Farm Business Management......Page 222
18.2 Workshop preparation......Page 223
18.3.1 Workshop 1......Page 224
18.3.2 Workshop......Page 225
18.5 Theoretical farm case study in Workshop 2......Page 226
18.5.1 Calculation of financial measures......Page 228
18.5.2 Developing partial budgets......Page 230
18.6 Conclusions from FBM workshops in Thailand......Page 231
19. The future for smallholder dairy industries in tropical Asia......Page 234
19.1 The relevance of ‘high technology’......Page 236
19.1.1 The process of technological change......Page 239
19.1.2 Technology and fertilisers......Page 241
19.1.3 Technology and animal health......Page 242
19.2 Making agriculture more sustainable......Page 243
19.2.1 Pollution and the public perception of dairy farming......Page 245
19.3 The role for Public Private Partnerships in dairy development......Page 246
19.3.1 The key roles for both public and private sectors......Page 247
19.3.2 Lessons learnt from the nine country study......Page 248
19.4 Ensuring a future for smallholder dairying......Page 250
Indonesian dairy smallholder pamphlet......Page 253
Appendix 1 Temperature Humidity Index......Page 257
Appendix 2 Conversion of units of measurement......Page 258
Appendix 3 Currency converter for South and East Asia......Page 261
Appendix 4 Tables of nutrient requirements......Page 262
Appendix 5 Worksheets for ration formulation......Page 266
Appendix 6 Financial statements......Page 270
Appendix 7 Examples of expectation and evaluation forms for Farm Business Management workshops......Page 276
Glossary and abbreviations......Page 280
References and further reading......Page 292
Index......Page 296