A summary of my presentation to the International Dairy Federation in Belfast, Ireland
While the presentation was to the IDF, it applies to all farmers.
Where there is change, there is opportunity.
As the industry changes some of your competitors will fall behind. Dairy producers will be rewarded for adopting new technologies. Producers must employ a system to discover, assess, and employ new technologies. Do not wait for suppliers to supply the tech. Waiting for the tech from suppliers will only keep a producer in line with the industry. Stay in the top 25% by creating a system that seeks new tech and tests it in your operation. Producers are already involved in industry peer groups, get involved in peer groups outside of the industry. Other industries have the same challenges with labor and tech, they may have breakthrough solutions. Seek out management training such as TEPAP at Texas A&M.
Technology is a disruption to how you interface with crops and animals.
A major pizza company sees themselves as a tech company that sells pizza. That philosophy has set them apart from the competition. Perhaps farmers need to see themselves as a tech company that produces food?
The future is now. We are employing new tech at increasing rates. I see the major disruption from tech coming to the area of management and how the farmer interfaces with plants and animals. Feedback and management will be real time. While productivity will continue to improve, I am not convinced the new tech will provide a major advance in productivity such as the Green Revolution. Productivity gains will be limited in low margin environments. The tech disruption will disrupt management. Tech will only be employed at the speed with which the supplier can advance producer aptitude and provide value. The reward will be to those producers that are able to advance their tech skill set at a rate that exceeds the competition. Many producers will find they need to hire these skill sets either through new employees or consultants.
The major long term benefit of the new technology is creating a more effective real-time feedback loop. The current milk price feedback loop is too slow. The producer receives the price signal well after inventories have swollen beyond manageable levels. If we can be allowed to dream, dream of a feedback loop that includes real-time consumer feedback that adjusts rations to adjust the milk production ratio of fat to solids/protein. Could that enlarged feedback loop lower the variation in milk powder inventories and lower the milk price volatility? Naïve? Impossible? Maybe. The tech devices in place today would have been thought an impossibility 20 years ago. Lower volatility is in the best interest of everyone in the dairy supply chain. Perhaps the industry can collaborate for the good of all those involved? Remember, 30 years ago butter was completely out of fashion…
Beyond employing tech, farmers will be required to operate in a larger more sophisticated sphere of relationships. It seems that dealing with people will continue to also be an area that will reward those with advanced EQ (Emotional Intelligence). We will rely more heavily, but not completely on suppliers and landlords. Farmers will need to deal effectively with consumer groups. Most importantly, as farms grow so will the staff. The staff of the new farm will be more skilled and sophisticated. Rather than performing manual labor, the future employee will provide management support. Employees will be looking for meaning in their work and a positive work environment. The good news, unlike IQ, EQ can be acquired via training. A manager that is continually improving will be able to improve EQ skills.
Keep exercising, still the easiest method to buy more time.
Keep advancing, keep learning. Change provides opportunity.
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