Transcript Definition of economic sustainability

Maitoa taidolla myös tulevaisuuddessa
AGRICULTURE IS GLOBALIZING,
WHAT DOES THAT MEAN FOR OUR
DAIRY FARMERS.
Chiefadvisor Ole Kristensen, Knowledge Center for Agriclture, Denmark
To be economic sustainable dairy farms have to
be in line with their surrounding environment
The role of agriculture
within the local community
(neighbouring issues, job
creation, community)
National conditions
regarding
• Economy
• Politics
• Environment
• Animal welfare
• Social conditions
•
Local community
National community
•
European community
World community
•
•
•
•
•
Decreasing income support in exchange for providing public goods
Intervention system only to be used in crisis situations
No milk quota regulation after 2015
Production on market terms implying much greater volatility in prices
A growing population
and a growing
middleclass
Increasing demand for
food  good market
prospects
Management of
resources/resource
efficiency
Future production conditions
- production on market terms
10.0
A growing population
A growing middle class
Positive market
prospects
Billions
8.0
6.0
4.0
2.0
0.0
Volatile prices
Resource management
and efficiency
Less developed regions, excluding least
developed countries
Least developed countries
Animal welfare
More developed regions
Competitive milkproduction
Competitive compared to:
Finland
Other milkproducers
Denmark
Price of milk
Other types of farmproducts
Price of production factors
Other use of farmland
New Zealand
Factors that influence competitiveness
(special for Finland)
 Geografic and climatic conditions. (water, short growing
season, distances)
 Holding structure. (FI relative small holdings, < 40 cows, strong
consolidation (-40% 2003-2010))
 Ownership, workforce and level of skills. (family farms,
less than 13% other workers, well educated farmers)
 Production facility  Level of investment. (374 to 558
euro cow/year from 2000 to 2009, transition from tied up to loose housing)
 Economy in milkproduction (high cost, to labour consuming efficiency)
 Strenght of the value chain
5...|
Precipitation
Tons milk pr. km2
2%
45%
18%
26%
6%
8%
6...|
Denmark
Netherlands
Finland
Lithuania
Sweden
Austria
Luxembourg
Belgium
Estonia
Malta
Latvia
UK
Poland
Slovenia
Czech Republic
Germany
Hungary
Bulgaria
Ireland
Spain
France
Portugal
Romania
Italy
Slovakia
Greece
Net investment per cow, Euros
Net investments in dairy farming
1,500
1,250
1,000
750
500
250
-250
-500
-750
FI
7...|
2005-2009
2000-2004
Source: FADN
120
(average 2007-2009)
100
80
60
40
20
0
Slovakia
Austria
Slovenia
Finland
Luxembourg
Czech Republic
Malta
Denmark
Sweden
Ireland
Germany
Italy
Hungary
Romania
France
Latvia
Netherlands
Belgium
Estonia
UK
Poland
Lithuania
Spain
Bulgaria
Portugal
Euros per 100 kg milk
The costs of producing milk
Cash costs
Interest on own capital
Milk output per kg milk
Milk output + other output + subsidies
Depreciation
Own labour costs
Milk output + other output per kg milk
Profit recirculated in the value chain
Profit
Feed and
other input
supply
Production
Processing
Retail
Consuming
• Product innovation and development
• Keep and maintain the cooperatives competitvenes
• Through productionstrategies Cooperative can mitigate the price variation
The value chain is
dominated by
strong
Cooperatives
10...| 2 July 2010
International networks
The European Dairy Farmers is a network
of leading dairy farmers to exchange
experience and knowledge.
www.dairyfarmer.net
International Farm Comparison Network
www.ifcndairy.org
European Cattle Innovation Partnership
http://www.scar-cwg-ahw.org/index.php/livestocksectors/cattle/
11...| 2 July 2010
Leadership and management tools
- managerial coaching(advisory board,
legal board, mentor)
- management roles, allocation and staffing
- tools ex SOP, LEAN,
- management implementation.
Key Performance Index (KPI)
The KPI Tool
Translated - generic
13...|
Rene Rasmussen Marts 13th 2014
Reproduction results
Target
14...|
Number of insemination
Fertility rate
Achived
Average
Advisory BOARD support you the way you
choose
Established by the farmer
Group of advisors e.g
• Economy
• Production
• Political
• Car dealer
• Public person
Fixed agenda
National discussion groups - Focus
1. Leadership
2. Strategy
3. Economy
Tools
•
•
•
SWOT, budget etc
Strategy plan
Economy reports
•
•
•
Meeting on the farm
Dialog and discussion
Input to the host
Choose what you need
Local
network Stable
”Coffeeclub”
groups School
Club
National
discussion
group
Advisory
Board
board
Mentor
One to one
“Many of the really good leaders are not head of anyone.
People follow them nonetheless - consciously or
unconsciously.”
Education and social media
Disseminate
Video
Cooperate
Network
10
9
8
7
6
5
4
3
2
1
0
Facebook
Branding
Promote
Pictures
Co-produce
Files
Word
18...| 2 July 2010
Crowdsource
Engagement
Discussion
TWITTER
• Strong value chain
• Research, advisory service
• Less strong competition
from other types of farming
• Level of investment
• Relatively high solvency
• Age structure <35/>55 (FI=
0,25 EU average=0,11)
19...|
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Conditions inherent in nature
Low density  long distances  extra costs
Farm structure (FI)  extra costs
Strongly dependent on economic support
Will Finish milkproduction be
competitive in the future?
 Geografic conditions
 Huge distances, short growing season, not the best land allocation 
high cost to produce
 Structure of the holdings
 Average herd size number 19 in EU
 70% of the cows in herdsize less than 100 cows
 Owner and workforce
 Good age distribution between (<35 years/>55 years)
 About 87% is family labour
 Farmers with a good education. More education needed?
 Investment
 Cost of production ?
 Valuechain
 A good advisory system (AKIS)