The BBC Radio 4 early morning farming programmes have been awash with dire predictions about the state of British dairy farming mainly, it is suggested, because the major supermarkets are paying 24p a litre for milk and the cost of production is nearer to 28p a litre.
Accordingly, many dairy farmers have gone out of business and pedigree herds have been sold off.
On the other hand, the nominations for the BBC Farmer of the Year Award include several dairy farmers who are making good attempts to run their businesses successfully even in the current climate.
Why the anomaly? The milk market is unusual in that the price to the consumer is held as low as possible by the supermarkets, claiming that consumers won’t pay any more, the second tier, the processors, claim that their costs have risen and they cannot pay any more to the farmers.
This then is not a market where “it’s not about the price”, or is it?
It seems to me that those dairy farmers who are successful have accepted that they are now in their own “new normality” and they must do something to redesign the way that in which approach the market or go under like so many of their compatriots.
I know that I have quoted this before but Albert Einstein hit the nail on the head when he said:
· “The definition of insanity is doing the same thing over and over again and expecting a different result”
The primary reason for farmers going out of business is that they have not accepted that they must change the way that they run their businesses in the light of current market forces if they are to stay afloat.
If some producers can do it, why can’t many do the same? It’s all about change and the resistance to change. “We know what we are doing, we have always done it this way” is a perfect recipe for disaster in these straitened times, and not only in farming.
Just look at the demise of Comet, yet another High Street retailer going into administration. Passed around to various owners, most of whom were not retailers and probably didn't understand it anyway, they became merely a showroom for electrical goods which they were prepared to sell to any customer who wished to nuy.
Service? What service? Technical assistance? Don’t be daft – that means that we would have to train the staff and that costs money and we can’t afford it.
So what happens is that they determinedly stay running the business in the same way, equally determinedly lowering prices “to be competitive” presumably hoping that things will change and the good times will return.
At the same time they moan about competition from web based suppliers instead of embracing it with enthusiasm. Their major error is that they look upon the web as a threat instead of an opportunity.
One problem is that the word competitive has come to be associated only with low prices which frequently sound the death knell of a business. On the other hand those leaders who realise that to survive in the existing jungle, it is essential to innovate, to change and question everything that they do in order not only to survive but to prosper.
Too difficult to start a business or to change one in a recession? Please note that Microsoft , Apple and Goggle all were started in a recession. New ideas, new thinking and a clear view of what success looks like, will always win.
Don’t worry about your competitors; make them worry about you.