Boosting management skills pays off for family dairy farm
A desire for better business management skills brought dairy farmers Joe and Barb Terpstra to the Advanced Farm Management Program (AFMP). Run by the Agri-Food Management Institute (AMI), the program’s offers curriculum specific to Ontario dairy farmers, including business planning, understanding financial statements and risk management assessment and knowing cost of production.
“We’re great farmers but we probably struggle in the business area, like learning about our efficiencies and learning how to read our financial statements,” says Barb. “We can’t learn that from just going to the barn all the time, we need to go and remove ourselves from our business and talk to others.”
The Terpstras milk 340 cows in their robot facility, and rotate their owned and rented land between forage crops for their cows and soybeans, corn and wheat cash crops.
Joe mainly looks after cows and crops and after taking AFMP, Barb is now more focused on the financial side of the business. It was the program that showed them where the inefficiencies were and what they should be looking at, she says.
On area they were weak in was financials for budgeting, so they worked with their accountant to put together an accurate, farm-focused financial budgeting system that they can use for monthly benchmarking.
“We wanted to break down each sector of the farm, keeping, dairy, heifer rearing and cash cropping separate, and then combine them at end of year and see where we need help or could be more efficient,” adds Joe.
In addition to their accountant, the Terpstras’ team of advisors includes their lawyer, veterinarian and genetics company, people who are experts in their fields and can make their farm work better and more efficiently. And after completing AFMP, they also developed a formal business plan with a vision statement.
“This made us think about where our farm is now and where we see it in the future; it gives you a guideline when making your business decisions,” says Barb. “Everything you want to do, go back to that and ask if this helps us get to where we want to go in future.”
Their new accounting system lets them monitor their cost of production on a monthly basis, and they’ve gone through a risk management assessment of their operation that includes everything from ensure cows are vaccinated and treated on time to boosting their insurance and improving employee health and safety.
“You have to address the weak links as well as the strengths,” believes Joe.
“To anyone sitting on the fence about taking AFMP, just do it,” advises Barb. “The only thing you will lose is nothing and you will be learning things about your business that you didn’t know were a bottleneck.”
To watch the Terpstras’ story, visit https://www.youtube.com/watch?v=ot1PQxXVLnE&t=4s.
More information about the Advanced Farm Management Program is available at http://advancedfarmmanagement.ca/.
AMI receives funding from the Canadian Agricultural Partnership, a federal-provincial-territorial initiative. Visit www.takeanewapproach.ca.
Written by: Lilian Schaer