Fifty dairy producers gathered earlier this month to learn how to maximize profit on their operations. The Dairy Profit Symposium, hosted by the Professional Dairy Producers of Wisconsin (PDPW), was held Dec. 9-10 in Madison, Wisconsin. The two-day event began with a recap of the major economic forces facing today’s dairy industry.This was provided by Daniel Basse, president ofAgResource Company, a domestic and international agricultural research firm.
It’s no secret that the world of lending has changed in the last few years. Dr. Freddie Barnard of Purdue University provided an update on the financial statements lenders would like to see and the criteria they use to evaluate them.
Dr. Michael Boehlje, also of Purdue University, encouraged dairy producers to think and act like chief financial officer (CFO). He focused on identifying key performance measures, performing a financial investigation and diagnosing profitability. In his closing comments, he suggested the following to build financial strength:
• Increase working capital
• Reduce short-term debt
• Fix interest rates
• Negotiate an extended/larger line of credit
• Restructure operating to term debt with a fixed rate
Day two began with a business planning lesson from Tim Swenson and Sara Swenson from Lookout Ridge Consulting. General Eisenhower was quoted as saying, “The plan is nothing, planning is everything.” Swenson and Swenson echoed that as they took the group through the steps of building a business plan and encouraged the entire dairy team to be a part of the process.
With the proper tools in place, dairy producers can begin implementing ways to protect or even grow profit. Dr. Mark Stephenson and Dr. Kevin Bernhardt of Wisconsin’s Center for Dairy Profitability concluded the event with a discussion on understanding marketing tools and concepts. PD
- Midwest Editor
- Email Karen Lee