Joas van Oord studied the benefits of business planning when he was getting a university degree in economics.
But he didn’t really get it until he returned to the family dairy farm and created a plan of his own.
“When I first came home, I used to joke about filling 70 kilograms (of quota) with 50 cows,” he says. “Then we started see some very good improvements at the farm and I started thinking, ‘That’s more than just possible.’
“Now, I’m milking 53 to 55 cows and consistently filling 75 kilograms.”
Of course, it wasn’t just the business plan that allowed the 32-year-old and his wife Lisa to accomplish this feat – but that’s where it started. After Joas obtained his degree, the couple travelled and lived in B.C. before returning to his parents’ farm near Springfield, N.B. in 2006 with the goal of taking over the operation. That was also when they become involved in the New Brunswick Young Farmers’ Forum.
“The young farmers talk a lot about having a mission statement, a vision statement and setting out your goals,” says van Oord. “So I sat down and wrote a five-year plan which, at the time, I thought was fairly aggressive. Then I really went at it.”
The buying out of his parents, Maarten and Caroline, meant the farm was going to have to generate more income and, at first, that appeared to be a pretty daunting task. The additional 15 kilograms of quota alone would cost more than $400,000. If van Oord added more cows, he would also need to expand the barn (a free-stall facility built in 1998), revamp the milking system, and acquire more land.
So van Oord’s ‘joke’ had a very serious undercurrent – they needed to boost productivity by at least 25 per cent or risk incurring a lifetime of debt. But how? After all, van Oord’s father had already substantially increased productivity in recent years.
The business plan didn’t have an answer to that question, but it laid out a strategy to find one. Van Oord started keeping much more detailed production and financial data, and analyzing those numbers in order to find areas of improvements. Although a strong believer in the old adage ‘you can’t manage what you don’t measure,’ even he was surprised when this approach led him to question one of the core beliefs in agriculture: That higher yields are better.
“In farming, everyone wants yield,” says the 32-year-old. “Well, we had lots of yield – we had so much we were selling hay every year or renting out land because we had so much forage. But when we looked at it closely, we found that when we put good grass in the silo, the cows would milk. And when we put in over-mature stuff, they wouldn’t.”
That prompted a new approach.
“Changing our forage management was a big thing for us – we really went at the grass,” he says. “We said, ‘Let’s forget about quantity and go just for quality.’ If it’s rained on, it doesn’t go in the silo. If it’s over-mature, it goes for hay.”
That led to a host of changes. None would be called radical, but collectively they would prove to have a big impact. The old system was based on waiting until there was “a nice big crop to mow” – which meant cutting the first two weeks of June, and then taking a second cut in August. Now van Oord and his father, who still frequently works on the farm, get out as early as possible and “we go as fast as we can without breaking equipment.” They also started growing corn and alfalfa, opting to cut the latter and other grasses near the farm three times a year after van Oord read of farmers successfully using a 35- or 40-day cutting cycle.
The results were substantial – milk production is now up by one third. More importantly, better-quality silage means van Oord hasn’t had to increase the amount of grain he feeds his herd (10 kilograms per cow per day). Nevertheless, he has gone from 73rd in the province in terms of milk production per cow to the Top 10. He is now aiming for the Top 3.
The effect on the bottom line is even more dramatic. In the last two years, Van Oord says his profit on sales is about 20 per cent – far above that of the average milk producer.
“Dairy prices are based on cost of production and only 46 per cent of producers actually make their cost of production,” he notes. “The truth is that it’s like any business. At the end of the day, in order for my business to survive and do well, I need to be in the top end when it comes to making a profit.”
Van Oord is quick to add that he doesn’t consider himself to be special in any way save one.
“I think what I’m good at is finding out what works on other people’s places and then copying it,” he says. “I don’t know how that sounds but there are a lot of producers who are way smarter than I am. So if I have a problem, I’ll ask around and say, ‘Who’s the best at this?’ Then I give that person a call.”
Van Oord actually takes a twin-track approach on this score. Sometimes he’s looking for expert advice, and sometimes he’s looking to hire the expert.
It’s an approach he embraced after attending a seminar given by Dick Wittman, the well-known Idaho farmer and consultant who champions professional business management practices for family farms.
“He says, ‘Don’t work on your weaknesses. Work on your strengths and hire someone else for your weaknesses,’” says van Oord. “That afternoon with Dick Wittman changed the way I farm and I’ve never looked back.”
Van Oord relies heavily on his crop consultant, bookkeeper, and accountant. He hires a feed consultant when needed and says his feed sales person has been a good source of advice, as has his hoof trimmer, who provides valuable insight into the health of his herd. He belongs to a dairy club whose members share production data and advise each other on ways to improve performance. And he’s remained heavily involved with the New Brunswick Young Farmers’ Forum, where he currently serves as president.
It’s a busy life, especially when you consider Lisa and Joas have four children under age six. But that’s why he seeks advisors who challenge the way he does things. He doesn’t want to be complimented on what he does well; he wants to be told how he could improve.
“I’m an eternal optimist – I always think things are going to go fantastically well,” he says.
“I can tell you that I’m expecting to be done my first cut by June 5th even though it’s winter right now. But even I was surprised how quickly things can change. I’ve seen big improvements in a lot of things. It really can happen in a hurry.”
While the business plan deserves a lot of credit, there’s another crucial element, says van Oord.
If you’re going to achieve different results, then you’ll have to change the way you do things. That’s the hard part, he says, especially when it comes to long-established practices, such as going for the biggest yields
“It’s the same as with so many things – it’s the mindset you have to change,” says van Oord.