When Joe and Russ Kelsay received a milk contract termination notice from Dean Foods, they hoped to weather the storm and find a new home for their milk.

Average annual milk production per cow in the U.S. increased from 18,197 pounds in 2000 to almost 23,000 pounds in 2017. That’s a 26 percent increase. These production numbers are reported and published on a regular basis. Most in the dairy industry are familiar with the significant gain in milk produced per cow.

Minnesota farmer Paul Zimmerman extended a firm handshake and greeting on behalf of his daughter to David Kohl, a Virginia Tech professor emeritus. Zimmerman’s daughter is a likely successor to their farm.

The ups and downs in the dairy industry can take a financial toll on your business. When times get lean, it’s good to look at every aspect of your business and consider all of your resources to free up cash flow. It can be tempting to focus on the little expenses, and sometimes it’s a combination of little things that can add up to big savings, but one often overlooked area to improve cash flow in a big way is the debt structure of your operation.

Key performance indicators (KPIs) are defined as measurable values that demonstrate how effectively a business meets its objectives. They help managers evaluate how their dairies are doing at given points in time.

The current operating environment for the dairy industry could be classified as “challenging.” Every day, dairy owners are asked to produce more with fewer resources. Labor shortages, stagnant milk prices, increasing operating costs and the current political environment create several issues dairy operators must be educated about and be able to address.

A market correction is a common trigger to start marketing. After a painful correction, frustration sets in, and risk management receives more attention. Some farmers will begin managing marketing on their own.

Bob, the dairy’s general manager (GM), came into Cliff’s office and said, “It’s bad, Cliff. This just isn’t going to work anymore. Either he goes, or I go.”