Are investments in biosecurity profitable? You can find out by using a management pyramid, designed in Sweden

Are investments in biosecurity profitable?

You can find out by using a management pyramid, designed in Sweden

By John Conway and Mats Pehrrson

Investing management, labor and capital to build a solid biosecurity firewall is a good thing. But the real motivation could be strong business financial health.
   The Swedish Dairy Association, an organization of producers and industry, believes that production and finance must be linked. The pyramid model, developed in Sweden, illustrates that there is a definite link. Day-to-day activities move up the pyramid from chores, such as milking, through the production systems – replacements, feeding, housing – that they are part of. Eventually all of this affects the pyramid’s apex, or return on assets.
   The pyramid model is a tool to assess quickly how a dairy business is performing, where bottlenecks exist and what changes to work routines can eliminate them.
   If new requirements are made on a business, the model handles them quickly. For example, it can adjust to a mastitis outbreak by changing the affected systems near the base of the pyramid and recalibrating benchmarks. The pyramid tool also shows that everyone involved in a dairy business contributes to its profitability.

Four pyramid levels Demands and requirements placed on dairy producers feed into the pyramid. Everything from government and lender policy to milk handler regulations influence production systems and profitability. Daily production benchmarks are the pyramid’s base. Records on milk and feed quality, herd health, and milking machine test protocol provide information to set efficiency benchmarks in the next level of the pyramid. Cows per full-time worker, pounds of milk sold per worker, pounds of milk per cow and other efficiency factors must hit a set level, specific to each dairy, for a positive financial return in the		click to enlarge

upper two levels of the pyramid.
   Major financial indicators – debt and investment load, operating income and cost-control factors – lead to a positive return shown in the pyramid’s apex.
   This is the question the pyramid tool can answer: How does everything below the apex, including biosecurity protocols, work to influence it?

The facts of management
   These dairy management realities must be part of the pyramid model:

The speed of change resulting from a management action varies. The financial monitors near the pyramid’s top tend to change more slowly compared to the production monitors near the base.
Changes in daily routines take longer to influence efficiency measures and financial indicators when several production systems are involved. For example, you might improve your calving area to control the spread of Johne’s disease. But since many factors influence the disease’s transmission, you might not see an immediate improvement in a benchmark.
Some benchmarks such as feeding space per cow are fairly easy to control. But when several things affect a benchmark, such as the number of mastitis cases, it’s harder to control.

On the ideal Swedish dairy, each production system has Standard Operating Procedures (SOPs) based on best management practices. Because SOPs include reporting and recording information, you not only improve a particular area such as milk quality, but you create a trace-back mechanism to locate the source of any problem.

FYI

Mats Pehrsson, who developed the pyramid model, works for the Swedish Dairy Association. Contact him at his e-mail address: mats.pehrsson@svenskmjolk.se

John Conway is a PRO-DAIRY management specialist based in Cooperstown, N.Y.