Last January, there were 4,630 dairy farms in Quebec. There were more than 8,000 just 10 years ago. In a recent meeting of producers, the Producteurs de Lait du Québec mentioned that we expected to have around 3,000 farms in Quebec in 2030.
2030 is tomorrow.
We have known for a long time that a similar quantity* of dairy cows is concentrated among an increasingly restricted number of producers.
However, we are in a position to question whether we are not close to reaching the tipping point for certain suppliers of these farms, whether most will be able to maintain the same business model with larger farms but smaller in number.
A few elements could continue to change the situation, these are just a few examples:
Farms with greater purchasing power will necessarily gain negotiating power.
How will it be possible to maintain attractive profit margins?
Will your representatives still be able to speak directly to decision makers or rather to those responsible for the herd and fields?
Larger farms have a reputation for being more demanding in terms of service.
Can the level of service remain the same if margins go down?
Will we keep the same number of advisors in the field?
Will we want more specialized advisors (e.g. for calves, for robots, etc.)?
Working methods will necessarily evolve for larger farms.
Real-time accounting, “connected” cows, Spanish-speaking workforce, larger orders and deliveries of inputs, etc.
New issues will arise for your customers.
Debt, personnel management, management in general, etc. : are you able to help them? How will this affect you?
What will be the impacts on your costs and revenues?
We are only talking here about the number of dairy farms when we know that the entire agricultural environment is changing more quickly than ever.
Wanting to be the “game changer” against your competitors or preferring to “follow” are two strategies that have advantages and disadvantages (although one has a preference for wanting to be first). Regardless, being ready to face predictable change remains an advantage to be used, to be anticipated.
In this context, tools exist to refocus on your real added value AND perceived by your customers and non-customers but also to question yourself about the best business model for your company, according to your objectives and your reality.
Puzzle is here to help you, contact us !
* The number of lactating and dry cows increased from 363,100 in 2012 to 353,400 cows in 2022 , or -2.7% over 10 years.
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