DN: Last year your farm had an anniversary, and you also achieved the milk yield, if I'm not mistaken, of 11.5 thousand kg per cow. What are the main components of the business success of your company?
AN: To be exact - 11493 kg. Of course, in agriculture it is extremely important not to delude yourself. In animal husbandry, 4 factors are important. If at least one is missing, there will be no development. They are – feed, genetics, technology (management) and personnel. We managed to create a very good team. From professionals to non-specialists. We are on the same journey; in the current business climate, when the market is rampant, when it virtually doesn’t exist, only the one can survive who knows how to work and who has achieved high performance results. Under these circumstances, it is easier for such enterprises to endure. It is necessary not only to remain alive of course, but also to work for the long run. We manage it!
DN: Last year was considerably a hard one ...
AN: Yes, there was a drop in the purchase prices for raw milk. Our beloved state does not want to fight counterfeit goods. That is why we have to tolerate inconvenience and receive less money. The one who is bolder makes the rules. The fuel price for spring field works this year has increased by 37% compared with 2018, whereas the purchase price for raw milk has not returned even to the price of 2017. 2018 was disastrous in general. Over the past 1.5 years, electricity tariffs, prices for fuel and lubricant materials, for feed additives, and for medications have risen. Everything became more expensive.
DN: You cooperate with large factories, including Danone, which demand higher standards of milk quality. To keep such a level for a long time is not easy, what should you do to make it work?
AN: It is not difficult, it all depends on us. There are all-union standards for milk. These requirements must be complied with. It means safety and quality. We supply a lot of milk to the plant of baby food in Yekaterinburg, which is owned by Danone. In 2016 and 2017, we were the best in milk quality in Russia among Danone suppliers, in 2018 we were also positively marked. The plant itself strictly monitors the incoming raw materials - and this is world’s practice. There are no Rospotrebnadzor (Russian federal service on Surveillance on consumer rights protection and human well-being) and other government agencies that control each batch of raw material - the plant itself assumes the responsibility to ensure the quality of incoming raw materials.
DN: How does Mercury fit into this world’s practice?
AN: We submit reports - that's all. But at the same time, on the shelves of the stores the number of substitutes is constantly increasing. Isn’t it a paradox? Why do we need then “Mercury"?
DN: A drop in incomes affect consumption. Do you notice its decline?
AN: I am not a milk processor, but a supplier of raw materials. Yes, we have heard about it from factories. We cooperate with 7 dairy processing enterprises, including the Yekaterinburg city dairy plant of Danone, two enterprises of the Molochny Kit company group, the Kushvinsky dairy plant, the Taste of Cheese plant, the Irbit dairy plant and some small batches are supplied to UGMK-Agro (only about 32-34 tons per month). Supplies to these enterprises are very prominent. And by the way, you cannot produce cheese from bad milk, and the requirements of the plants are the most stringent.
DN: What is the level of the daily sales of milk of the company?
AN: 95 tons.
DN: This year you will open a new dairy complex. Are you planning to keep all the cattle in free-stall barns and use rubber mats?
AN: Yes, that is our goal. The Ural climate is harsh, and there are different free-stall management technologies. We came to the conclusion that the mats that we have been using on the first dairy complex for more than 12 years have proved themselves to give positive results, they are reliable and comfortable, porous, airy and do not let the cold through. Cows feel better where it is warmer to rest on. And these mats - even from the touch of a human hand, they become warm faster and retain comfortable warmth. These mats do not cool the cow udder. The fact that we normally have the level of somatics of 90 thousand speaks volumes. And an average level is 123 thousand.
Some incompetent suppliers make their offers, but they cannot even give an example of farms where other mats are used and with the performance rates better than ours. They either do not know such farms, or simply sold and forgot about other enterprises.
DN: Why did you choose Animat for scraper alleys and passages?
AN: Initially we studied a lot of options and chose Animat, because their products really create comfortable conditions for cows. And that was in 2013, when there were very few modern dairy complexes in Russia. I think that our results are the best indicators of the quality of the technologies used.
DN: You have a large company. You have crop farming, your own feed mill…
AN: Yes, we have our own feedstuff of a good quality, we purchase only premixes. We produce rapeseed cake, the amount we buy is very small. Bulky feed we do not purchase at all, 100% our own.
DN: Are you going to change the diet due to the difficult weather conditions?
AN: We have a clear opinion on this. A few years ago, we started using corn carnage (conserved ground ear corn). But in our conditions, corn grain is very difficult to obtain, it is very costly, especially the drying process. And carnage means the preservation of all nutrients. Last year May was cold, we had to plant corn in a very short time, but we did it, because corn is important for us. But I also had to postpone the harvesting of corn for carnage until October.
DN: Anatoly Sergeyevich, does the dairy industry now have any prospects in Russia? There is currently a tendency towards consolidation, what we can see from EkoNiva. Is it possible that the whole market will become one huge holding company?
AN: If the state changes its policy towards dairy products with milk fat replacers, that is if they are banned, then it will be profitable to do animal husbandry for both large and small farms. Until the state regains some order, only large players and those who have modern dairy complexes will survive.
I keep cows in free-stall barns and in tie barns. The difference in the cost of milk makes 7.14 rubles. In tie barns it costs more. If I did not have a modern farm, I would not be talking to you today. With our productivity, our cost of milk is 18 rubles, in other farms it reaches 23.
And when you ask such managers, what is the salary at the enterprise, you hear meagre figures. It's a shame. Last year we had an average monthly salary of livestock breeders of 65 thousand rubles, even in tie barns. And on the new complex - more than 80 thousand.
We first think about the cow, and already it allows us to achieve such performance results and wages. If you do not create conditions for the cow, then crop production will not feed us. In the Urals, it is risky.
DN: Do you take an advantage of loans?
AN: This year, the situation with loans is easier, but I don’t need the loans on such terms. Last year I took a loan to build a dairy complex, now I must pay it back. The interest rate for our company was not very high, the banks gave us a good subsidized loan. We do not have plans to take short-term loans. We were forced to switch to VAT, we were left with the old taxes, and the double taxation is not favourable for taking loans.
DN: The double taxation was introduced to make it easier. Has it become easier in reality?
AN: No prerogative rights are offered for farmers. I visited France, there are more than 35 programs created for farmers, and they work effectively, and in our country, everything remains on paper. Our farmers are courageous people who want to work, but no favourable conditions are created for them.
DN: What would you like for your company?
AN: Our team knows how to work, we do not have a well-defined policy. It changes every year, because it depends on what comes into the head of our government. The worst thing is that there is no stable state policy in relation to agriculture.
DN: Now Rosselkhoznadzor will become entitled to carry out a vet control in the regions ...
AN: We do not have any help from the supervisory authorities at all. Products are imported from different countries and are not controlled. And the easiest way is to check us, because we are here. In Western countries, there is a relationship between a milk processor and a farmer. And they value their reputation.
I travel abroad every year and ask local farmers if supervisory authorities visit them. And they are very surprised by such questions.
And we have such stringent requirements for the construction of dairy complexes ... Under the buildings, you need to install fire extinguishing systems, put hydrants and so on. When it all pays off, is unknown. In America and Canada, they do not have anything like this. I visited in Italy a dairy complex for 900 heads, which is located within the precincts of a small town. And at the same time there are no disinfectant barriers or fencing.
In the Soviet times, the Rospotrebnadzor did not check farms at all, the veterinarians were responsible for the welfare of the herd. And all the livestock entering the area was strictly controlled.
DN: Does it make any sense for your farm to start processing milk?
AN: Everyone should do their own thing. But the market is unpredictable. We have a fairly large amount of milk – it is not that easy to process it. Therefore, processors collect it. Yes, good logistics, we have some trade with meat because we value our reputation. If we gave meat products to the supermarket network, and there they mixed our meat with the one of a poor quality, they would start selling everything under our brand and it would discredit us. And that is why we have our own stores. We value our reputation.
DN: Thank you very much for the conversation and good luck to you!