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0309 PD: In your own words... How will you keep business strong in 2009?

Progressive Dairyman Editor Karen Lee Published on 06 February 2009

Progressive Dairyman asked dairy producers and allied industry at Managers Academy Jan. 20-22 in Orlando, Florida, the following question: “What strategies will your business employ or recommend to keep dairies strong through 2009?”

“We will be looking at our vet costs and maximize what we can do with our own labor force. We’ll also be looking around at major purchases to find who can offer the best price for the same product or who can provide the best service for the same cost.”
Justin Risser
Dairy producer
Lancaster County, Pennsylvania

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Risser and his family milk 700 cows and grow all of their own forages. They purchase concentrates and grain. This year they will be analyzing where all of their money is going.

“Look at all the details and question everything cost-wise. We’re not reinventing the wheel, but making sure it is well-greased. We have to fine-tune it all.”
Russ Saville
Cargill Fort Ann, New York

Saville is recommending his clients set budgets taking into consideration their records from 2007 and 2008. He suggested reviewing standard operating procedures on the farm. Labor is another area to consider. Are employees putting in too many hours or could they fill spare time with additional responsibilities? As a nutritionist, Saville is considering all diets, questioning if everything is necessary and whether the benefits continue to outweigh the cost.

“Review and analyze your financials as a businessman with your ag lender and/or your accountant. If your situation should become tight, review at the end of each quarter.”
Gary Williams
Badgerland Financial
Baraboo, Wisconsin

The first thing Williams advises producers to do is to contact their primary lender immediately to discuss their current situation. For this meeting, dairymen should have their current financial records with them. This includes current and intermediate assets with cow numbers and equipment outlined, a year-end loan balance and information on all other liabilities, a 2008 actual income and expense statement and cash or accrual income tax return or at a minimum year-end farm account records.

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After the financial review is complete, Willams said producers should take one of the next two to three steps.
1. Take immediate action to change costs or improve income.
2. Make longer-term decisions (for 12 to 36 months from now) that affect short-term cash flow and business operations.
3. Eliminate or limit capital spending and/or sell or eliminate any non-income asset that has reasonable value.

“Our plan is to milk more cows to lower our cost of production.”
Allan Kutz
Kutz Dairy LLC
Jefferson, Wisconsin

The Kutz family plans to keep expanding its herd. They will hold off on capital projects and do a little more overcrowding.

“We’ll look at the way we do things to maximize the efficiency of our operation. These are things we always should have done but have not had the financial need to do.”
Dr. Bob Patrick
Dairy producer and veterinarian
Eatonton, Georgia

Patrick has already changed from mattress to sand bedding to increase cow comfort and health. He is looking to forward contract feed if there is an opportunity there, he said. All processes will be evaluated from cow treatment to labor to how feed is handled.

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