Milk production
As of January 2012, FirstFarms' milk production in Slovakia comprises approximately 5,600 cattle, of this 3,100 dairy cows.
The preconditions for an improved milk yield include a number of different factors and actions on the part of FirstFarms. Since the acquisition of the farming companies in Slovakia, a particular degree of focus has been placed on both feed composition and feed quality for the stock.
Increases in animal production are due to significant investments in both animal and vegetable production, rationalisation measures, education of local staff and alteration of the feed mix for the animals. Consequently, animal production is currently at a level almost equal to that of the best Danish milk producers.
To expand and make the milk production in Slovakia more effecient, FirstFarms initiated in 2007 a new construction for 2,700 dairy cows, including a new milking parlour, a new building for feed storage, and investments in various environmental measures to comply with national and EU requirements regarding the environment and improved animal welfare. The total investment amounts to approx. DKK 120 million, of which DKK 85 million is designated for construction of three modern steel halls, new stall equipment, cubicles and a rotary milking parlour with capacity for 2 x 40 cows and a separate milking parlour for calving cows. Significant investment are made in environmental measures with 6 months' slurry storage capacity, purchase of animals for the new stables and investment in machinery for fodder production.
The construction reflects the significant economies of scale attainable in farm production, within the framework of Slovakian agricultural legislation. A significant issue in respect of assessment of the profitability of expansion of the milk production is that the national milk quota in Slovakia remains unfilled. The expectation is that there are good prospects for buying up milk quota and cattle stock.
At the same time, a significant factor involves increasing the level of knowledge amongst local staff via training and education, in order to ensure animal welfare and thereby also secure continued improvement in milk yield. In the efforts to improve communication and smooth out the daily cooperation between local staff and Danish management in Slovakia, the Danish management are receiving Slovak language training on an ongoing basis and the local employees are offered English lessons. FirstFarms also provides retraining and education for local veterinarians, hoof clippers, etc. to ensure animal welfare and personnel focus on this in their daily work, so that the animals remain healthy and contented with a consequent increase in yield. In order to ensure that the operational management has access to external advice and potential for constant updating of technical knowledge at the highest level, cooperation has been established with both Danish and foreign advisory services and private consultancy firms. These agreements ensure that the scientific basis for milk production is always at a very high level. At the same time, the company has close cooperation with other Slovakian milk producers.
At present, the milk from Agra M and Mast Stupava is sold to three different european dairy companies. In the management's opinion, FirstFarms' ability to provide large and stable quantities of uniformly high quality milk makes purchasing the production an attractive proposition for a number of international dairy companies and consequently also puts the company in a good negotiating position when negotiating contract conditions with milk buyers. A large number of European dairy companies are currently within delivery distance of FirstFarms, and for this reason various options regarding sale of milk are being considered by the company at this time.