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Why expand a dairy portfolio in such a volatile environment? Will historical cycles in the industry hold true, or will cycles be deeper but shorter? Are higher feed costs and breakeven milk price levels here to stay?
Expansion projects can create a great deal of excitement for a company. Whether the project is a new milk parlor, a hay barn, a silage pit or waste disposal system, these projects typically signify growth. While growth is exciting, it can also be a time of uncertainty.
Large expansion projects generally come with large costs and questions of how those costs can be managed. In addition, they provide a number of tax planning and saving opportunities.
Long-term business planning is a management function that not many dairy producers seem to enjoy. This is a conclusion I have drawn based on the few comprehensive business plans I have seen over my many years of work in the dairy industry.
Too often when I see a good plan or someone reaches out to me for help, owners really want it for their banker and not themselves. One of the more extreme examples of this dynamic is illustrated by a phone call I received from a Southwestern dairyman on a Monday morning several years ago that went something like this:
Some people set out to make a lasting change on their industry, but Max Deets, Beloit, Kan., says he never thought of himself in that light.
Instead the cattle feeder’s natural leadership ability, quest for improvement and genuine respect for others led him to some of the most influential roles in the beef business.
Feihe International Inc., formerly known as American Dairy, said Monday that it plans to sell its two dairy farms in China to a Chinese investment company.
The investment firm, Haerbin City Ruixinda Investment Company Ltd., will pay about $18 million in cash for the two farms. It will also supply Feihe with milk for the next year and a half, which Feihe estimates will be worth about $114 million.
Dairy producers considering new or upgraded milking facilities have a lot to think about. Cow comfort, ergonomics, productivity, efficiency – all these things are top-of-mind when designing. After all, the purpose of a milking parlor is for people to milk cows safely and efficiently. That’s the heart of a good system.
A parlor’s CIP system is vital. It’s like the kidneys of a milking system. Don’t overlook the importance of its design and proper installation. Optimum milk quality, and the premiums that go with it, depend on effectively cleaned and properly working equipment. It’s similar to how the heart depends on the kidneys to clean and filter the blood it pumps.
Environmentalists are making a new push for stricter regulations on large livestock operations in Indiana, even as the number of such farms with thousands of animals continues to decline.
The Indiana Department of Environmental Management recorded a decrease of 57 permitted farms in the past year to 1,994 – part of a decline of nearly 10 percent over the past four years, The Journal Gazette of Fort Wayne reported (http://bit.ly/qx134Y).
Kraft Foods Inc. (NYSE: KFT) today announced that its Board of Directors intends to create two independent public companies: A high-growth global snacks business with estimated revenue of approximately $32 billion and a high-margin North American grocery business with estimated revenue of approximately $16 billion.
The company expects to create these companies through a tax-free spin-off of the North American grocery business to Kraft Foods shareholders.
North Dakota's Farm Bureau is promoting a state constitutional amendment that says no one may restrict "modern livestock production and ranching practices."
The Farm Bureau intends to circulate an initiative petition to put the amendment on the statewide ballot. The proposed initiative was delivered to Secretary of State Al Jaeger's office.
Note: This article was adapted from Dairy Practices Council (DPC) Guideline 54S “Construction Materials for Milking Parlors.” More about the Dairy Practices Council guidelines and other guidelines can be found at: http://www.dairypc.org/
In general, water use and humidity are high in milking parlors. This leads to an environment that can be very hard on construction materials. Therefore, all interior surfaces should be both water-resistant and easily cleaned. Rather than “save money” by using inferior construction materials, perhaps consider leaving out “bell and whistle” equipment that can be easily added in the future and upgrade to better construction materials.
