You are in the business of dairying to make money, not to lose it. We know it doesn’t always happen that way. As you know, milk and feed prices are volatile at best these days, and it takes more and more financial planning to stay in the business. In our article this past September, we briefly discussed our philosophy as it relates to creating a “dairy team” of financial advisers. In today’s market, it is critical that a team of advisers is available to you to help navigate through the ups and downs and more importantly, maximize the ups and minimize the downs. This dairy team consists of some or all of the following: your accountant, banker, attorney, consultant, investment adviser, and any other stakeholders that can add value by having a seat at the table.

You might want to buckle your seat belt. The folks who are the customers of agriculture and who pay the freight for maintaining farm programs have spoken. And what they say may not necessarily be sweet music to the ears of Cornbelt agriculture. Do you remember back in grade school when a new stick of chalk hit the blackboard and produced that awful piercing noise? That may be more indicative of public opinion. If you could shift the funding in the USDA budget, where would your priorities be? Farm programs? Research? Food assistance programs? Conservation? Rural development?

During the month of January, Cooperatives Working Together (CWT) accepted 19 requests for export assistance from Darigold, Foremost Farms, Dairy Farmers of America, and Land O’Lakes for a sales total of 2,019 metric tons (4.451 million pounds) of Cheddar, Gouda, and Monterey Jack cheese to customers in North Africa, the Middle East, Central America, and Asia. The product will be delivered January 2011 through May 2011.

At this time of the year, I wish I could bring you some good news. I am afraid, however, that what has been a modest recovery for our dairy farms starting in late spring is about to end. Most dairy farms, still under the shock of the 2009 financial disaster, now barely hold their heads above water. What’s next? Feed prices have gone through the roof, and the November decline in milk prices can be the initial signal for further price declines despite the recent surge of dairy product prices on the cash and futures markets. Tight financial management will be the norm for the first half of 2011. First, let us look at feed prices. I used the software SESAME™ that we developed at Ohio State to price the important nutrients in dairy rations to estimate breakeven prices of major commodities and to identify feedstuffs that currently are significantly underpriced.

With a low economy affecting interest rates and farm values, now is a good time to take care of planning the future of your business. Dan Rupar of Ruder Ware LLSC out of Wausau, Wisconsin, specializes in estate planning and business succession planning. These plans are not only integral for intrafamily farm transfers, but also for two or more farmers establishing a joint operation, he says. Only about 30 to 35 percent of family businesses make it to the second generation, and just 10 percent make it to the third generation. He adds that while 78 percent of families intend to pass their business to their children, only 34 percent have created a succession plan.

Respiratory disease is responsible for nearly half of all weaned heifer deaths on U.S. dairy farms. New benchmarks for pneumonia treatment and mortality rates take aggressive aim at this troubling statistic from the National Animal Health Monitoring System’s Dairy 2007 study. The benchmarks, established last year in the Dairy Calf and Heifer Association’s Gold Standards II, urge heifer growers nationwide to keep pneumonia treatment rates under 3% for heifers between 6 months old and 12 months old and less than 1% for heifers 12 months old to freshening.

Use of some supplemental amino acids is now becoming available for all species worldwide. In the past 20 to 30 years, adaptation of supplemental amino acid(s) in the non-ruminant diet has undergone sequential increases to where supplemental amino acids are now contributing 30 percent or more of the required lysine.