Friday, May 9, 2014

Why Bother With A Mobile Milking System?

Well, I've finally got my act together and started building my mobile cowshed.

The question I get asked a lot is, why? 

There are plenty of opportunities to go dairy farming. I could go lower order sharemilking or contract milking. Those two options don’t require a huge amount of money & I've got the experience to do a good job of it. 

But there are certain aspects of the dairy industry that don’t fit with me. I'm not saying that these aspects are wrong. But for me, I want something different.

So I've spent the last few years thinking about how I could create the perfect farming business that suited my family and my beliefs.

So I’d like to explain what my 5 issues are. Once people understand the 5 issues it becomes a bit clearer as to why I'm building a milk business based on a mobile cowshed.

Real milk
When I left the farm & moved to town, I was surprised by how different the supermarket milk was compared to the milk I got from the vat every morning, while living on the farm. Any dairy farmer will tell you that the milk we buy in the super markets is quite different from the milk that comes straight from the cow.

Virtually all milk brands in New Zealand put their milk through a number of processes. The result is milk that isn't really like the real thing.

There has been a lot of demand from the public for raw milk. It’s common to hear people rave about how great raw milk tastes etc. 

But the difference in the milk is not because it's raw, but because its real milk that has not being heavily processed.

It’s crazy that New Zealand produces so much milk, but it’s so hard for kiwis to buy real milk.

So I’ll give people the opportunity to buy milk straight from the cow. I’m going to simply milk our cows, gently pasteurise the milk and then deliver it to the public. 

Brand is better than land
You can generalise by saying the farming business model in New Zealand is to, borrow heaps of money & buy a farm. 

You then need to farm it like crazy to pay the interest bill. Farmers then make a small return of about 4% of asset per year. But that doesn’t matter because the land always seems to increase in value, and the capital gain that is made on the land is tax free.

This is actually very similar to what urban New Zealanders do too, except they do it with their home. 

The goal of many driven young farmers is to own their own farm. 

I take a different view; I believe owning a brand is just as good or even better than owning land. 

If we look at some well-known companies we find that the value of the tangible assets, like land, plant & equipment is only a fraction of the total value of the company. The intangible assets or the goodwill of these companies are worth more than the actual assets that you can touch.

The “McDonalds” brand accounts for 70% of the total value of the company. This is despite the fact McDonalds owns some of the best commercial real estate in the world. 

The Coca cola brand is said to account for 51% of the company’s value. This is despite the fact that the company owns many other drink businesses too.

So I'm not really interested in owning the land that our cows graze. There is a limit to the amount of production a piece of land can produce, but there is no limit to how far you can grow a brand.

I feel that New Zealand agribusiness doesn't concentrate on building the consumer brands enough. We are very good at producing commodities. But the consumer brands are where the action is, in my opinion anyway.

My focus is on the building a consumer brand.

Sustainable farming
Rightly or wrongly, farmers are copping a fair bit of criticism about the environmental impact of modern intensive farming systems, especially dairy farmers.

I've decided that environmental sustainability is imperative, both on farm and off farm. 

These days, just about every farmer will say that caring for the environment is very important. It seems that “environmental sustainability” is a relative term used by everybody regardless of their farming practices.

I've looked at the science around water quality & nutrient leaching. It appears that the science is quite clear. We know what factors cause environmental damage. 

Unfortunately it can be quite difficult for a traditional dairy farm to change their practices to meet the science & stay profitable at the same time.

We've designed our farming system so that it is adaptable & fits around what the science tells us about nutrient leaching & effluent run-off.

The farming system we employ, has to be pure. That means our goal is zero nutrient leaching, zero waste & eventually carbon neutral.

Now, that’s a ballsy claim to make! 

To be clear, I'm not saying we will achieve those goals from the start, but that is our goal. 

We’re prepared to get radical & funky with the way we farm to ensure we get there. 

Value chain control
If we look around the world we see farmers who have lost control of their product.

Many dairy farmers in the UK have found themselves at the mercy of the milk processors & the major supermarkets. 

The supermarkets have all the power and they use their power to drive down the price that the farmers receive.

Our friends in the Australian dairy industry have found themselves bearing the brunt of the supermarkets using milk as a loss leader. Again the farmers find that they have little power.

Recently in New Zealand we have seen many suppliers complain about the business practices of our supermarkets, which happen to be owned by the same Australian supermarkets, which (quite by coincidence) are being run by the same bunch of Poms who used to run the UK supermarkets. 

So, I want nothing to do with supermarkets. (Actually, I don't think the supermarkets would want anything to do with me either.) 

It’s easy to say “we’re going to take control of our product”. It’s quite another thing to actually do it. 

The easy thing to do is to sell our milk via a retailer. They have the customers and it’s easy to get the volume that I require to be profitable. But in the long term, I would find myself dependent on the retailers for my distribution.

I'm going to spend a little more time and effort now & get set up to sell our milk direct to the customer.

But in order to produce a truly sustainable product with a small scale herd, I need to know that I'm not going to get screwed down by a retailer.

Opportunity & Lifestyle
This section comes out of the “I want my cake & I want to eat it too” department.

I want a great lifestyle where I can spend quality time with my kids & wife. I don’t want to be tied to the cows and I don’t want to be running around in a frantic rush, trying to get all the jobs done in the day. 

I also want to earn a good living and to top it all off, I don’t have much money to spend setting up this business. 

So it has to be cheap to set up.

Some will say I'm an unrealistic dreamer to think i can have all those things together. Well maybe I am, but I'm going to give it a crack.

If this works, there is no reason why young eco conscious, entrepreneurial men & woman from around New Zealand, can’t set up their own milk business.

When I was 25 I found an investor, who helped me go into business for my self.  There’s so many good young people out there who don’t think farming is an option for them. I want to get young people into agriculture. Many young people give dairy farming a go but decide to leave the industry & do something else (like myself). I want to see if we can create opportunities for young people to start their own farming businesses that provide the lifestyle we all want.

So those are this issues that have been on my mind for the past few years.

In my next post I'll explain how the mobile milking business will work and why it addresses these 5 points.


  1. "Some will say I'm an unrealistic dreamer to think i can have all those things together. Well maybe I am, but I'm going to give it a crack."

    My mother used to say: "Children and fools should not see unfinished work."

    Sir Ken Robinson gave an address on Ted Talks suggesting that schools stifle creativity, and used this example:
    A little girl was painting in an art class.
    The teacher asked her what she was painting.
    "A picture of God", the little girl said.
    "But no one knows what God looks like", said the teacher.
    "They will when I have finished", the little girl replied.

    A friend of mine use to say: "It does not matter whether you think you can, or whether you think you can't, you will almost certainly be correct."

    If you believe your project will work then any failures along the way are a chance to remedy weaknesses before they become important.

    Vision is an asset that should not be ignored, nor does it need the consent of those without vision.

    I believe you will succeed.

    1. Thanks Carlos, thats a great story!

      Will update the blog with my progress.


  2. Very well written article Glen. Thanks for sharing the view~