Profitable farm business practice
As individual business operators and at an industry level, we are best to focus on the profitability variables that farmers and industry can best control. While there is no silver bullet to ensuring long-term farm profitability, ADF is committed to developing opportunities to best support profitable farm businesses.
Over the past decade, many dairy farmers have questioned their ability to sustain or improve profitability while facing both short-term and long-term challenges around the volatility of milk prices and input prices, as well as climatic extremes.
Farm profitability is controlled by two sets of drivers:
- Macro drivers: Issues that happen outside of the farmer’s control, for example weather, milk prices, input prices, asset value and government policy; and
- Micro drivers: Issues that are mostly under the individual farmer’s sphere of influence, including how well they farm with underlying profitability levels, and how well they prepare through risk mitigation strategies.
Working alongside other industry bodies, including Dairy Australia, ADF is committed to supporting dairy farmers’ wealth creation through tactical and strategic management decisions, including those made to minimise the negative impacts of macro drivers.
- Foster an industry-wide culture where the principles of profitability and wealth creation are better understood, encouraged and put into practice.
- Equip farmers with risk management decision-making processes to best make tactical and strategic management decisions to control the elements they can and reduce the influence of those drivers which are largely outside of the farmer’s control.