Business analysis may not be the most exciting phrase but it is an essential activity when trying to successfully manage a dairy farm.
Farmanco farm consultant Tom Farran spoke about a new online program to help improve farm business performance, known as DairyBase, at a seminar during the 2016 International Dairy Week.
DairyBase, developed by Dairy Australia, is a free online tool designed for farmers to enter the physical and financial data about their farming business and extract detailed reports analysing this data.
The analysis aims to help farmers make more informed business decisions, measure their performance against other farms, reduce risks, identify opportunities and assist with business planning.
Mr Farran said users could set their data to private so fellow users were unable to identify their farm.
DairyBase delivers benchmarks which provide general trends and indicators that are associated with high-performing farms, however Mr Farran emphasised that farmers should not get caught up on this detail.
``You can see characteristics of good farming but that’s not necessarily the cause,” Mr Farran said.
``The comparison with your own farm over time is the best thing you can do.
``Every farm has a unique set of resources and operators have different skills, experience and attitudes to risk.’’
Mr Farran also discussed the importance of understanding the difference between cash and profit and accounting for appreciation and depreciation.
``Cash flow might struggle, but you have to account for the increasing value of stock.’’
Reports and analysis can be monitored at any time on DairyBase however the physical and financial data only needs to be input once a year.
Since the product was released in May last year, Mr Farran said the feedback had been positive and many had commented on the user-friendly nature of DairyBase.
Program uptake has been positive with well over 500 registered users nationwide and 135 in the Murray dairy region.
While DairyBase provides valuable information, Mr Farran emphasised the importance of farmers having an understanding of the information it produced.
``I think it’s extremely useful, but it’s how they (farmers) interpret information coming out that is the most critical part.’’
To register for DairyBase, visit www.dairybase.com.au