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Production Call is Killing Farming

The traditional call for continual increases in production to increase farm profits is killing the industry and putting young people off farming, according to farm business specialist Peter Floyd.

Speaking at a recent farm business seminar, Floyd said that trying to solve financial problems by putting on more stock and more fertiliser has made many farms into high-cost enterprises with dwindling profits.

"The good farm gate prices of the last two seasons have disguised the fact that many farms are burdened with a high cost structure," he says.

"Now that returns and profits have dropped, some highly geared farmers are still being told that the only way out of their crisis is to produce more. With both properties and people at maximum stretch, something has to give and it at profitability.

"Now we have sophisticated processes and programs available through the COGENT Process, which analyse farm data and can predict accurately the impact of any change to the efficiency of the business," says Floyd.

"There is nothing magical about the approach it is just best business practice adapted to New Zealand farming. But for many farmers it seems like magic because of the way it increases profit and satisfaction from their business."

Floyd is currently hosting farm business seminars with financial guru Martin Hawes and international business consultant Joan Baker. Seminars are being held next week in Palmerston Nth, New Plymouth, and Hamilton, and in Rotorua on 2nd April.

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