BUSINESS SIDE
Cost control and the five ‘nahs’ Words by: Anne Lee
W
ith the sparkle of a high milk price still glinting in the distance it could be easy to get a little distracted from keeping a grip on cost control but don’t do it was the clear message at the South Island Dairy Event (SIDE). Three proponents of tight cost control, all experienced in the roller coaster of milk price volatility shared their tips on how to set up and run an operation capable of withstanding the lows and still achieve profitability, equity growth and farm ownership. Carlos Cuadrado, featured in last month’s Dairy Exporter, came to New Zealand from Argentina in 2002 with his wife Gisella. From a dairy assistant role and with no family financial backing they’ve grown their business and achieved farm ownership of a 430-cow, 120ha property near Oamaru with a cost of production at $3.97/ kg milksolids (MS) for the 2020/21 season while retaining their 860-cow, variable order sharemilking job in Canterbury, where that farm has a total cost of production of $4.21/kg MS. “You must know the difference between needs and wants.” In their household Gisella has the answer when Carlos is contemplating a purchase, he says. “It’s called the five nah’s – I ask, she says nah so I think about it and come back again a few weeks later with why it’s a good idea and she says nah so I think about it some more and so it goes on.” Eventually if he puts up a good case, usually a revised plan, it might get a yes
Carlos Cuadrado speaking at the SIDE conference in Ashburton.
but the process of rethinking creates discipline. He’ll also scout around and try and get it for 20% less. “If others talk about holding every cent a prisoner – well, for us that cent dies in the dungeon.”
OTHER TOP TIPS FROM CARLOS: • Learn to manage grass well and don’t rely on costly supplements. • Make use of industry resources to learn all you can, identify and talk to top performers and learn from them so you’re working smarter to get top results. • Have a do-it-yourself mentality so learn other skills – welding, how to build, for example.
Dairy Exporter | www.nzfarmlife.co.nz | August 2021
• Don’t buy equipment you don’t use often – hire it, borrow it, come up with a sharing scheme with a neighbour. • Don’t buy new - avoid overcapitalisation. • Work hard - your kids will learn that too. • Record every expenditure, monitor and analyse all the time. • Question the need for every item and even scrutinize the need for some farm practices – don’t just do it because you always have. • Use what’s around you.
THE FULTON’S STORY Hannah Fulton and her husband Craig are 50% equity partners in Paddock Wood, a 160ha effective, 625-cow Canterbury irrigated farm that they also contract milk. They featured in the November 2017 Dairy Exporter and have progressed through the sharemilking system, winning the 2007 Waikato Sharemilker of the Year Award. Their first year in Paddock Wood coincided with the payout crash from $8.40/kg MS to $4.40 with no retrospective payments coming in. “I worked out that for every tanker going down the track we were losing 55cents/kg MS,” she recalls. “We can’t control the price of milk so we 39
