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Management

Manage dairy employees, establish farm protocols, take on milk marketing, and become more confident in your farm financials.

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Each and every day, Walt Disney theme parks put on a show for millions of guests across the globe. People dream of experiencing the ultimate Disney vacation, and cast members are taught from day one it is their job not to disappoint the guests.

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A couple of years ago, we had certain assumptions about the cost savings robotic milking systems would yield, and where the bulk of those savings would come from. We expected the main advantages would come from reduced labor costs and increased milk production. But has that turned out to be the case? What’s changed in the last two years?

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Results of a large, ongoing study of Midwest dairy operations show six factors that separate top financial performance herds from their peers.

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Although it is easier to strategize about protecting profitability when times are good, a sound risk management plan applies to all margin environments and is especially important when the outlook is bad. When margins are low and opportunities are hard to find, producers may not consider it worthwhile to initiate margin coverage, preferring to stay open to the market.

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When it comes to the “right” amount of debt, farm business owners sometimes feel like “you’re damned if you do and damned if you don’t.” Borrowing money can be risky, but on the other hand, not investing in the business could limit opportunity and put the farm at a significant competitive disadvantage over time.

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While the long-term outlook for agriculture is bullish, dairy producers face short-term financial challenges, Rod Wautlet, Agri-Business Consultants LLC, told producers attending the 2017 Vita Plus Dairy Summit, Dec. 6-7, in Madison, Wisconsin.

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