Strategy in the Dairy Cooperative world is different from strategies in most companies. Cooperatives has an obligation to take all the milk the farmers deliver. No cows are equipped with a tap you can just close! At the same time, the Dairy cooperative needs to create the most value possible from all the milk to pay their farmers. So, strategy projects do not only needs to deal with the future milk intake but also to optimize the milk value (income per kg of farmers’ milk). In practice this means producing and selling more branded and value-added products and less commodities. It can also be good to have different manufacturing options in the production strategy due to changing value contribution because of periodically changing market prices. Dairy processing and automation equipment are very expensive and have long delivery times. So, the manufacturing capabilities strategy needs to be optimal when investments are being made and later when the new production is established. As a complication milk is separated several times into main and bi-products giving a mix of branded and non-branded as well as consumer and B2B products making this strategy work a complex task.
For us at Nutrixpers such strategies should include:
- Establishment of product and manufacturing scenarios to be explored based on market and marketing considerations.
- Revenues with different product scenarios including main and bi-products.
- Milk intake forecast and milk compositions.
- Mass balances
- Milk revenue value modeling.
- CAPEX establishment
- OPEX establishment
- Financial modeling (ROI, NPV etc)
- Milk value modeling considering OPEX and CAPEX
- Informed Decision-making based on the above
If you would like to discuss or hear more do not hesitate to contact us.
#DairyCooperative #DairyStrategy #MilkProcessing #DairyFinancialModelingÂ
