More milk and less business...
In the last 10 years the productivity of the drums CREATES increased by 40%. What is striking is that this substantial increase in production served to maintain the result of the business on the same level, with the disturbing conclusion that the rest of the extra volume generated was to deal with the increasing level of direct costs.
The 319 drums CREATES are distributed on all the dairy basin of the country and account for about 10% of the national production and are a good sign to know what is happening in the sector of primary production of milk in Argentina. As we can see in the following graph the business of producing milk is a race to get more milk and be able to stay in business. In the financial year 2000/2001 the direct expenses that involved the drum are covered with 5,000 liters/ha VT, in the year 2013/2014 represent 9.300!
The issue is that the costs (expressed in litres of milk/ha Cow Milk + Dry Cow) increase year after year with a correlation r2= 0.86, while the Result for the Production barely kept (RPP = Revenue from sale of milk and meat deducted the expenses, direct, indirect, and amortization).
As seen in the next 10 years, the producer must achieve an increase in production of other 40% if you intend to continue as until now, or is that a dairy farm that today delivery 5.000 lt/day for July of 2025 should be producing 7.000 lt/day on the same surface. This is undoubtedly the meaning of the famous INTENSIFICACION that we all unravel.
What we can accomplish that increase with the resources that we have available? How much more milk you can produce with the current production plan? How we are keeping the productive efficiency for every peso spent?
We are happening a lot of questions and as it rang the bell to start...
Marcos Snyder