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Gut feel not enough to survive dairy downturn
Gut feel not enough to survive dairy downturn
Dairy farmers who have a detailed understanding of their businesses will be in the best position to reduce costs, improve efficiency and ride out the dairy downturn, new ANZ research reveals.
“Cash flow pressures in the dairy sector are set to persist and uncertainty exists on the timing and extent of recovery,” Agri Economist Con Williams writes in ANZ Agri-Focus.
“Dairy farmers face the difficult challenge of minimising near-term losses, while not cutting too deeply into the long-term productive capacity of the business. Striking the right balance is no easy task.
“The imperative to minimise losses is likely to be greater if the financial viability of a business is more precarious. However, recalibrating the cost structure and productive efficiency of a farm is usually of greater significance.”
Decisions on improving a farm business’ viability need to be supported by a formal decision making process. A big part of this is completing a business plan and multi-year budget.
ENDS
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