Making milk: Growth & Efficiency
Photo : Les Entreprises Lavoie, Saint-Isidore, Alberta
Owners of large dairy herds in Quebec, Ontario and Alberta share with us their vision for their operation’s growth and for the future of dairy production in the country.
Growth & Efficiency
Tight management for a farming operation is indispensable. Numerous experts have said it repeatedly. Margins are shrinking, competition is becoming fiercer, and the world is knocking harder and harder at our doors.
A strong trend in Quebec, as well as in Canada, is the polarization of dairy operations. On one hand, large operations are pursuing growth. On the other hand, smaller ones are targeting niche markets.
“We can’t stay in North America where we have, on average, the smallest herds,” believes Alphonse Pittet, 59, whose farm has been located in Saint-Tite since 1980 and which produces 324 kg of quota with 240 cows.
Alphonse Pittet, his wife Claire and their son Jérémie are all attuned. Despite the pessimism that is prevalent these days, they see a positive future for their sector. In 2016, they will, for once and for all, leave behind the four milking robots they acquired in 2003 and go to a carrousel with places for 24 cows that they found on Facebook for half the price of a new one.
A new barn will see the light of day, a versatile infrastructure that will allow them to grow their herd, if needed. “First of all, we want to increase productivity without increasing the number of animals. We’re aiming for 375 kg,” indicated Jérémie, 27. The operation will leverage efficiency gains by milking three times per day while maintaining the same feeding costs.
Enthusiastic about their project, the Pittets say they are in an exceptional period for expansion thanks to access to financing and low interest rates. “The technology is there and we are very well equipped,” says Alphonse. “Everything costs and we are in debt, but that’s natural for entrepreneurs. We are ‘obligated’ to be efficient.”
Nick Thurler, a dairy producer in South Mountain, Ontario, buys quota every month. His herd’s production is constantly increasing. He and his brother own 560 kg of quota.
“When we reached 200 milking cows, we built a double-12 milking parlour,” says the Swiss-born producer. “Today, we milk 440 cows three times a day. You’ve got to spend more to make more and with less staff, but you become more efficient. What’s important is that the operation makes enough money to ensure the repayment of the investments.”
The owners of Lavoie Enterprises, one of the most profitable dairy operations in Alberta, see things the same way. In order to prosper, they put the accent on growth and the tight management of their assets.
This dairy farm in Saint-Isidore, 500 km north of Edmonton, has gone through a significant evolution. It went from 10 cows in its early stages in 1953, to 250 in 1995, then to 420 in 1999.
“Growth generates economies of scale and allows us to achieve the critical mass sufficient to get a hold of more efficient and more profitable technologies,” highlights Claude Lavoie, 36, one of six shareholders in the operation.
“Expansion is also a mentality in our province,” indicates Richard Lavoie, 64, Claude’s father.
These producers estimate that operations that accept the status quo are going to be overtaken and end up going backwards.
Supported by calculations, Claude is planning to have a barn that can hold 1,000 milking cows. In terms of equipment and infrastructure, Lavoie Enterprises already has the capacity to meet this growth. “Claude is very ambitious, which makes him a good manager,” points out his father.
You can read the entire feature in the February 2016 edition of Le Coopérateur magazine [in french]