IDENTIFYING which way a business was moving in, looking at whether objectives were being met and reviewing the sustainability of cost of production were important things to consider going forwards.
That was the message from Anderson’s Centre partner and dairy specialist, Mike Houghton, who told farmers at The Dairy Show, Shepton Mallett, Brexit brought an opportunity to strategically review their businesses.
Mr Houghton said: “Profit as a percentage of turnover is not very widely used, but farmers should be looking to target 15 per cent.
“At that level they would be able to afford to invest, draw a reasonable living and have a business which is sustainable for the future.”
The dairy sector was currently in a good place he said, with favourable conditions seen in spring and summer, and a promising maize crop on the horizon.
“Cows have performed well throughout the summer, fertility has been good and we have seen a very positive movement in yield from forage," he added.
Mr Houghton said forage remained the cheapest feed available and farmers should make the most of it. Nationally milk from forage was about 2,600 litres per cow, which he said was a long way short of the 40 per cent target.
He said the dairy sector was likely to remain robust under Brexit, dependent on the circumstances of the exit.
“The biggest challenge will be Northern Ireland. They put 850 million litres south of the border for processing, so if there is a hard Brexit that will be really challenging and will have some repercussions back in the UK.”
He said on the plus side, there seemed little hope in a strengthening of the pound which was often good for UK farming, making exports more competitive and providing an uplift in Basic Payments.
However, a no-deal Brexit remained a possibility which could lead to massive short-term upheaval on dairy markets.
Despite the challenges, he said farmers had lots of positive options going forwards. These included using the aim of reaching carbon neutral status as an opportunity for farmers to offset emissions from other industries.