Investments to improve the bottom line

Clay52

Member
Location
Outer Space
If you have a heap of money saving investments and cant pay your bills in a downturn you'll need to pay your debts before the heap grows in a good time, by which time the next downturn arrives.As for blame its always someone else's fault.
Not having a cash buffer in an industry like dairy that has up and down price cycles is just bad business.

Most money saving investments have reasonably long pay off times. Most wont be overall cash flow positive in the time the next down turn is expected.
So while in the long run something is a good investment. In the short term it can hurt you getting through low milk prices.

Or could just go with what most dairy farmers do. Price goes up. New tractor, new car, new motorbike, new bailer. Price drops. “Who do can we blame for me not having money to pay my bills, it must be the big farmers fault”
 
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Durry cows

Member
Location
Derbyshire
Bore hole
Silocompactor
Push up silage more often
Improve feed barrier and feed surface
Feed twice a day or once in between milking
Maxamise your milk cheque low scc, bacto, send your milk at the right time of year
Make sure you send all you milk i.e dont tip it down the drain so reduce mastitis fouls calving problem
Dry cow and transition yards
Efficient calf accomodation
I see silopactor is on that list is it really needed? We do all silage ourselves just asking if you find it that important? Or others advice? Thanks
 

supercow

Member
Location
Dumfriesshire
Surely bills are easier paid if u invest money to reduce tax now to reduce cop on downturn. It's six and two threes both opinions, spend to save next year or save to spend next year.
 
we've spent our monies on tracks/fencing splitting up a silage pit and debt reduction.
can't for the life of me understand why buying a shinny depreciating asset just before a down turn can ever be good ?
we had further plans for project concrete this winter but that is now on hold until we can get some certainty on where the bottom will be. monies saved there will sit in the current account and be used to see us through our cash negative months and hopefully reduce or negate the need for the overdraft.
 

Mouser

Member
Location
near Belfast
Not having a cash buffer in an industry like dairy that has up and down price cycles is just bad business.

Most money saving investments have reasonably long pay off times. Most wont be cash flow positive in the time the next down turn is expected.
So while in the long run something is a good investment. In the short term it can hurt you getting through low milk prices.

Or could just go with what most dairy farmers do. Price goes up. New tractor, new car, new motorbike, new bailer. Price drops. “Who do can we blame for me not having money to pay my bills, it must be the big farmers fault”
Who said he doesn't have a cash buffer? Maybe thinks he has enough by and wants to invest what's extra to reduce cop long-term.
 

Mouser

Member
Location
near Belfast
Maybe he does.
I don’t have a problem with investing to reduce COP.

In any case I’m just giving my opinion on what I would invest in currently.
:scratchhead: didn't notice any suggestions in your posts, just constantly saying to build a cash buffer. Would be interesting to see some more suggestions for someone who already has good cow tracks and borehole.(and a cash buffer(y))
 

Clay52

Member
Location
Outer Space
:scratchhead: didn't notice any suggestions in your posts, just constantly saying to build a cash buffer. Would be interesting to see some more suggestions for someone who already has good cow tracks and borehole.(and a cash buffer(y))

Huh.
I repeated what my point because I was defending my point against other views. Am I not allowed to do that?
 
A borehole/well should have a payback within 3 years,
Check water quality/ mineral content with any near neighbors before you start ,and again check mineral content as soon as you find water, before you spend on further pumps etc.We sank one found water but it has a very high sulphur content so we have never used it . A bore hole a mile away is fine.
 

stablegirl

Member
Location
North
We are with Arla and decided to put in a new bulk tank, it had a 3 year payback now they have changed there payments for eodc etc it bring payback down to 18 months IMO making it a no brainer.

I think we will prob invest in some help with the foot trimming ie a day a month as we do it all ourselves and i want to try and move to 2/3 annual trims.

We have invested more with the vet being more proactive with fertility, i know these are not capital items but in a way they are.
 

dannewhouse

Member
Location
huddersfield
Yep, that’s the way most people convince themselves the new tractor is a good investment.

I'm happy to buy second hand and sort the odd problem myself but I can see the thinking on some farms where a tractor say has had at least 5k repairs for the last 3 years (each year) above service/ general running costs and its looking like that will be the norm trading in say a 20k tractor for a 50k does make a little sense?

similar argument my mate bought his second car on finance I said he was daft but he had worked out his monthly costs were actually less including paying car off as fuel usage was less, insurance less etc he did quote reasonable numbers at the time so it was believable + not the guy to lie for sake of it. just 1 example of where sometimes borrowing/spending/investing the money sooner sees a quicker return?
 

DairyGrazing

Member
Mixed Farmer
Location
North West
I see silopactor is on that list is it really needed? We do all silage ourselves just asking if you find it that important? Or others advice? Thanks

Yep didn't need to build a bigger silage clamp. 10-20% extra in clamp. Previously had a loading shovel and a 7530. Now have loading shovel, tractor w/compactor and another tractor w/ front and back weights to do shoulders/edges.

We make even better forage now which provides a more consistent ration.
 

pappuller

Member
Livestock Farmer
Location
M6 Hard shoulder
Not having a cash buffer in an industry like dairy that has up and down price cycles is just bad business.

Most money saving investments have reasonably long pay off times. Most wont be overall cash flow positive in the time the next down turn is expected.
So while in the long run something is a good investment. In the short term it can hurt you getting through low milk prices.

Or could just go with what most dairy farmers do. Price goes up. New tractor, new car, new motorbike, new bailer. Price drops. “Who do can we blame for me not having money to pay my bills, it must be the big farmers fault”
You need to read my post before you lecture me, I simply asked what investment would improve the bottom line with the impending price drop we hear of. My investment is a borehole which guarantees to pay for itself in 2 or 3 years, I consider that to be an excellent return on capital of circa 33%. Will your heap of cash return you 33 %???? I know mine wont but maybe if you ran a tighter ship and focused on keeping your costs lower you wouldnt need as big a heap ? I dont any people who have replied have mentioned new tractors or shiny metal.
 

Rossymons

Member
Location
Cornwall
Rewiring

Dollops of ready-mix

Fixing up our limited machinery to be more reliable and safe - brakes on slurry tanker for example.

Some extra calf hutches.

None of the above has cost very much but has made a massive difference to our working day. Feels like a damn quick ROI
 

Happy at it

Member
Location
NI
For me it's to pay off borrowed money. Hard to weigh up if it's the right to do, especially when there's always something that could be done in the yard and interest is "cheap". But at the minute I think I'd rather be hit on a bit of tax and get the debt down, and have less interest needing paid each year, rather than spending on improvements.
 
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mixed farm

Member
Rather than spending it all, build up a cash buffer in the good times to get through the next downturn that will come. Then you can be one of the few farmers not complaining and blaming everything and everyone else the next time the milk price drops, even though we all know milk price goes in cycles.
Clay never complains you know:censored:
 

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