Have you found your farm’s “sweet spot?”
Mar 26, 2007 10:12 AM
By Bill Henning, Small Farm Specialist, Cornell University
A lesson from the dairy industry
Most good equipment operators soon identify an engine speed where the engine is very resilient. At that speed the engine runs easy. It can handle extra load without significant laboring and when engine speed does drop it rebounds nicely. Truck drivers often refer to this as an engine’s “sweet spot.”
Farms are far more complex than engines, but every farm also has a sweet spot. It is that point where all of the pieces of the puzzle fit nicely into place; where things tend to run smoothly and when difficulties are encountered, it’s not terribly difficult to make the necessary adjustments. The sweet spot is also very close to the point of optimum return. Whether farmers know it or not, they are forever searching for their own elusive sweet spot.
I received a phone call this last week from a well-respected dairy farmer who was definitely beyond the scope of a small farm but on the small side of big farms. At one time this person was pushing a 30,000 pound (of milk) herd average. He was implementing every recommended technology prescribed to increase production and profitability. He was extremely unhappy and going broke. Today he grazes, his herd average is a little above half what it once was, and he cash flows even most of his major capital expenses. Even at his current level of profitability he asked the question, “Where is that point where net returns are maximized?” Obviously, I didn’t have the answer.
At this year’s Family Farming Conference it appeared there were farmers who had come very close to finding their sweet spot. Of the five dairy farmer presenters, all milked about 35 to 50 cows. All had herd averages in the 12,000 to 13,000 pound range. All grazed. Three were organic. Two, the oldest and the newest, were not. The oldest never milked more than 35 cows; has grazed for more than twenty years and still sees no reason to milk more than 35 cows. The youngest is having no problems starting a new operation, supporting a family, and making all his payments.
One of the organic farmers, feeding no supplemental grain, spent $14,000 on capital improvements, $10,000 on his daughter's wedding and paid $45,000 on principal payments from farm income during the last year. This individual will also have about twenty bred, certified organic, heifers for sale this year. Another organic farmer just made his last farm payment after just ten years of farming. Every one of these farmers reported that they thoroughly enjoyed farming and had time for rest, relaxation, and fun.
Your sweet spot is not in the same place as your neighbors – the sweet spot on every farm (beef it dairy, beef, hogs or sheep) is unique to that farm. With changes in prices, weather, workers, management… the location of that sweet spot tends to move. The search is an ongoing challenge that never allows farming to become boring. But the question begs asking; do we make it harder than need be?
How often do farmers do something on their farm because the neighbor did it, or because the salesman said it could be done? How often have new technologies been adopted because they were the hottest new things out of research?
The point is: Your search for your own sweet spot, which is peculiar to your own farm, will be greatly streamlined if you concentrate on those technologies that are best suited to your own particular circumstances. If you want to imitate the neighbor, listen to the salesman, or even jump on the latest out of the universities; first consider the contribution, and the cost, in your particular environment. This may sound obvious, but it’s amazing how often it’s ignored. How many modern farming practices are implemented just because “that’s the way it’s done?”
With so much of the dairy industry beyond the point of diminishing returns it is no wonder so many struggle and so many fail. hy would anyone go looking for profit where so many are losing money? How many small farms have gone out of business trying to imitate big farms? Have you ever considered that the sweet spot on your farm might not be where you’re looking?
Bill Henning is Small Farms Specialist with Cornell Cooperative Extension Service. He can be reached at 315-536-5123. For more information about opportunities for small farms, visit the Cornell Small Farms Program web site at: www.smallfarms.cornell.edu.
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