With a background in agricultural research, the industry has always appealed to Lachie’s love of growing fodder and caring for stock. He is continually amazed by the ability of good dairy farm managers to adapt to the tough situations that inevitably come along.
Lachie has seen farmers battle through significant challenges in the region including high water prices, droughts, and floods.
“It is a credit to our farmers to watch them pivot and adapt,” he says.
Lachie says many farmers are sophisticated in their use of the water market, feed contracts and long-term milk contracts, which has been a great risk management tool that many farmers use to their advantage.
“Our farmers are getting better at using contracts and understanding markets that allow them to lock in profits, manage risk and secure finance for investment back into their business,” Lachie says.
He says a contract helps plan for the season ahead, forecast income, lock in some variable costs and provide a higher level of certainty for financiers to better back any future investment.
In addition, Lachie says farmers know it is critical to monitor their business performance – and those that really know their numbers can better identify areas to focus on and ways to better control costs.
According to Lachie, understanding the water market and making use of available options is essential to Murray Dairy farmers when irrigation underpins the success of the region.
“If we can better understand the fundamentals of the water market and lock in profits through feed security and milk prices using tools like carryover or leasing, then that gives us more options for our farming systems,” he explains.
“I have watched farmers change their systems to maximise fodder yields while utilising infrastructure to look after cows and paddocks in tough times, to maintain margins when terms of trade are tough.”
While the Murray Dairy region is diverse, he said all farmers have adapted their management systems to better cope with variability to take away some of the volatility.
“I started in Murray Dairy in 2016 after the milk price drop when the press headlines were screaming doom and gloom,” Lachie says.
“No-one is saying that was an easy time. Yet across the region – from dryland farming in the north-east to irrigation farms with years of no water in the Riverina – good farmers lent on the solid dairy fundamentals of the Murray region and found a way forward.”
Lachie adds the ability of farmers to work together and share information with each other is one of the hidden strengths of the industry.
“It has been great to see the benefits of the past couple of seasons. To see farmers sure up the foundations to take them into the future through investing in capital – shows positivity and encourages the next generation,” he says.
With the end of financial year approaching, now is the time to check in on your farm financial position and be even better prepared for the new season.
There are many tools and programs available to provide analysis of your dairy farm business performance, production costs and profitability – and the Murray Dairy team can help farmers improve profitability and operational efficiency.
For support with your farm business management needs, contact Lachie Barnes on 03 4811 6008 or email lachlanb@murraydairy.com.au, or visit Enhancing Farm Business Management | Dairy Australia to find out more.
