Future-proof company
Arla and farmer tackle the profit together
More than 300 dairy farmers in England will participate in an Arla program to make companies future-proof. In concrete terms, this means that the livestock farmers are given tools to arm themselves against a volatile milk price. This should increase the profits of the companies.
Although Arla's primary task is to bring value to the milk, the cooperative in England is now going one step further. In recent years, for example, the company has seen that dairy farmers are finding it increasingly difficult to keep their heads above water, as a result of the extreme movements in the milk price. To help livestock farmers, the 'R500' program has been launched, which should give companies more opportunities in the modern dairy market.
Profits can turn out higher
In the meantime, more than 300 dairy farmers have already signed up for the program. The rationale for driving the program is the evidence that profitability can be increased if dairy farmers are better informed and given the opportunity to respond to market demand.
“Market volatility is something we cannot ignore in the dairy sector,” said Graham Wilkinson of Arla Foods UK. "But we have also seen that when dairy farmers approach their business in a different way, they are better able to adapt. To be able to do that, the program provides them with tools and support."
Specifically, R500 provides a scorecard of the 500 highest performing companies. It then examines the company's strengths and weaknesses, providing insight into opportunities to improve efficiency and profitability. At the same time, the dairy farmers are sharing each other's experiences and are thus tackling the challenge of a volatile milk price together.
2 challenges
Wilkinson says the industry is still getting used to the end of the milk quota. This data, together with the volatile milk price and Brexit, leads to dairy farmers tending to focus on only 1 of the 2 challenges. “Dairy farmers are either good at taking profits in good times, or they are good at planning to guard against risk. We found that the dairy farmers best able to switch between these extremes are the most successful ."
With this, the cooperative is taking the lead in encouraging dairy farmers to think more about the company (in the context of a free market). It indicates that there is more going on in the background and that the milk supply is a point of attention. In Ireland is For example, it has already been shown that when a cooperative embraces something, the dairy farmers are also prepared to get to work on it.
Herman van den Pol
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