Pedro Madero: We help dairy farmers to improve their business
1. What do you consider Mexico´s greatest agricultural challenges?
Trade barriers being negotiated with USA and Canada (NAFTA) are quite important as they could affect the possibility to grow in production volumes and productivity. New markets are needed, but freight costs could be a negative side to export to far away countries.
Water scarcity, changes in raining patterns, and eroded low nutrient landscape due to global warming, extreme heat waves, underground water quality due to over exploiting of reserve waters, new plagues more difficult to eliminate, etc., all together affect the production efficiency, quality and costs of all type of crops.
Social structure and organization of small farmers require government assistance in order to provide a minimum level of subsistence, as the limited land size, working capital, equipment and machinery, does not allow them to make reasonable profits. After 70 years of communitarian farms, those have not been able to achieve sustainable revenues.
Lack of strength of the primary producers to leverage the negotiations with resellers, industrial processors, commercial channels, always make them the weakest link of the value chain.
2. You are involved as CEO/president in agricultural equipment and systems for dairy farms. What will be the greatest challenges facing this sector in the coming 20 years?
a) Water availability and water quality in the high dry areas of the North Mexico, where most of the milk is produced, is used for cow consumption and production of forage. The end result is production of low forage quality, unappropriated water quality for cows, which will eventually increase the production costs, lowers the energy content of milk solids, diminishes health and reproduction of the animals, etc.
In Mexico and also in developed countries where our company is doing business:
b) The rapid growth of large farms while the small farm sector is being reduced at a fast pace, is helping dairies to reduce fixed costs while being able to hire more professional people, hire better consultants, use a greater purchasing power to buy or produce better food at better prices, acquire equipment, etc. In consequence this is increasing the production of milk while simultaneously pushing down the price for it. Ultimately this is not getting to fair levels of profit for the farmers of any size.
c) Processors and commercial distribution centers are taking profits which sometimes are much bigger than farmer´s. If farmers are part of cooperatives processing and selling, the problem may be reduced, but the lower prices of international milk most of the times increases the farmer´s vulnerability.
d) Precision dairying, data analytics, sensors, software, information, instant awareness tools, etc., bring great help and support to improve the farmer´s efficiency, but certainly increases the need for higher education, more time for learning new technologies, time to pay attention to reports and alarms, etc.
e) Availability of labor willing to work at dairy farms is continuously decreasing, demanding systems and products to minimize human dependence.
f) The difficulties of not finding the proper balance between reducing labor while simultaneously not losing efficiency. The labor reductions by automatization sometimes increase the difficulties to manage, observe, react to changing factors requiring actions. This lack of quick reaction may lead to levels of production, health, reproduction or culling that could be more economical damage than the cost of labor reduced.
g) Artificial intelligence and robotic systems must improve and be developed in many areas to reduce the time needed to operate the farm while allowing for these tasks to be performed.
h) Environmentalists groups attacking continuously the dairy sector, human nutritionists blaming milk consumption of health issues for consumers, etc., is not helping milk processors to increase the milk and milk related products demand.
3. How do you keep informed over current trends in international ag Business?
We have distribution centers in several countries and independent distributors in others. We comunicate with customers from many countries in a direct basis. We participate in international farm equipment shows in different continents and continously increase the personal relationship with proffesionals in this sector in may countries. We belong to different organizations such as NMC, IFCN, DLG,etc., while we are also subscribed to different dairy magazines in different countries.
4. …are there still many changes to expect in farm mechanisation?
Yes, I think there are. Artificial inteligence and improved robotics have a great room for growth. Data Analitics and big data systems will help to find better and faster needs and responses to include in automation and mechanical actions.
5. And your DLG membership? Can be full use be made of this even over the long distances?
As a mean of information, to understand trends in other regions, ideas, research, policies, in general give us a broader prespective. Being informed of events, exhibitions, conferences, etc., is important to participate when posible and to be open to new or different ideas and concepts.