The two metrics KgMS/FTE and Cows/FTE are not effective, meaningful metrics.
These two standard Dairy Industry labour efficiency and farm productivity metrics do not reflect our REAL productivity on farm. They do not compare apples for apples and can lead to disillusioned benchmarking for farms and the industry in relation to labour.
These metrics can also sometimes mask what seem to be high achieving farms from the outside. When in reality the system faces overburden, burnout and frustration, and greater risk to people, animals, property and business.
What are these two metrics trying to measure:
kgMS/FTE : Measures the total amount of milk solids produced per year for every full time employee. It aims to show the economic output for the labour input or labour productivity.
Cows/FTE: Measures the total number of cows managed per full time employee. It indicates efficiency on farm and can be used for labour planning.
So why aren’t these metrics very accurate or effective. Well it lies in the definition of FTE – Full Time Equivalent. FTE represents the total workload of all employees on farm standardised into units of a full time employee. The problem in dairy is determining what is a full time equivalent and how many hours do they actually work?
In other industries, an FTE is equivalent to a standard of 40 hours, so it makes this calculation easy. However, as we know very well, in our industry (as far as I am aware) we don’t have a set standard for what is considered an FTE in hours – this means that for every farm the “standard hours” of an FTE will be vastly different. One farm might have all their team working a 40 hour work week and consider a FTE as being 40 hours. However another farm might have their people working 70 hours a week and think that a FTE is at 70 hours. And let’s be honest -generally on farms people work a lot more than 40 hours/ week and particularly the farm owners or managers who are counted as an FTE will work much longer hours than a 40 hour work week.
Therefore it is actually impossible to use these two metrics accurately in any benchmarking. Farm A cannot compare their KgMS/FTE and Cows/FTE with Farm B.
Lets look at a scenario
Farm A has 3 people each working a 60 hour week, and they have 480 cows and produce a total of 210,000 milk solids. Their labour metrics are:
- 166 cows/ FTE
- 70,000kgMS/FTE
Farm B has 4 full time people and one part time. The full time people work 40 hours per week, and the part time person works 20 hours. They have 600 cows and produce 270,000 kgms per year. Their metrics show:
- 133 cow/ FTE
- 60,000kgMS/FTE
Table 1: Farm A vs Farm B using FTE
| Numbers | Farm A | Farm B |
| FTE | 3 | 4.5 |
| Number of Cows | 480 | 600 |
| Number of KgMS/year | 210,000 | 270,000 |
| Cows/FTE | 166 | 133 |
| KgMS/FTE | 70,000 | 60,000 |
So what this suggests is that Farm A has much better labour productivity and efficiency. But it is not measuring apples for apples. Is this actually showing the true story? Well no – while on paper and in our reporting Farm A looks great, it is not accurate or reflective of the true productivity.
If we actually look at an FTE as being equivalent to 40 hours per week, then Farm A has actually 4.5 FTE not 3. (60 hours x 3/40).
So now Farm A’s real metrics are:
- 106 cows/FTE
- 46,666 KgMS/FTE
As you can see, suddenly their productivity is actually worse than Farm B.
A better way to measure
So what am I trying to say? FTE is not a great measure on farms unless we actually define and standardise the set hours that FTE is equivalent to. Only then, can these two metrics actually be meaningful for benchmarking and assessing our performance.
Alternatively a much more accurate way to measure our productivity is in terms of labour hours:
- # Labour Hours/ Cow
- KgMS/ labour hour. ( you could measure labour hours/ KgMS also but you might be working with tiny numbers so it’s not very practical)
If we used these metrics then our two Farms would look like this:
Table 2: Farm A vs Farm B using labour hours
| Numbers | Farm A | Farm B |
| Number of people | 3 | 4.5 |
| Total labour hours/ year | 9360 | 9360 |
| Number of Cows | 480 | 600 |
| Number of KgMS/year | 210,000 | 270,000 |
| # of Labour hours/ cow | 19.5 | 15.6 |
| # of KgMS/ Labour hour | 22.43 | 28.85 |
It is pretty clear which farm is more productive in terms of labour.
Labour metrics don’t tell the whole story
In summary, everyone can look like they are wonderfully productive if they employ only two people and make them work 100 hours per week to get the work done. But this is not a sustainable business and is not showing effective sustainable productivity.
So keep this in mind when you are using these two metrics or comparing your figures to others, as they may not be what they seem on paper.
Importantly don’t forget that these two labour metrics are only a couple out of a huge number of metrics that you need on your farm to ensure a well-balanced business and sustainable performance. You might be amazing in labour productivity but have huge animal health, safety or quality problems.
That is why labour productivity counts only if there are excellent systems and processes in place to ensure that the people are able to deliver good results across all key metrics (including people, animal welfare/ health, safety, environment, cost, quality etc), consistently, effectively and sustainably without overburden.