The dairy industry has seen much change in just the past few years. Extend the timeline out further and it has seen tremendous change in terms of productivity, technology and even financials. The Northeast Dairy Farm Summary (DFS) is an excellent source of actual data from which we can make observations over the last 33 years. While the farms included generally have above-average results for the overall industry given the sophistication level of their management reporting, some continuing trends can be drawn, particularly between the most and least profitable of the group.

Imagine living in a world where there are no consequences. What do you think that would be like? At first, that sounds kind of intriguing, doesn’t it? You could eat whatever you want ... calories wouldn’t count. You could drive as fast as you want ... you wouldn’t get tickets, just warnings. You could stay up and party as late as you want ... hangovers wouldn’t exist. Hey ... you wouldn’t even have to work or pay your bills ... someone would just give you free money!

“I am the owner! Why do I feel so powerless?” “Why don’t my employees do what I tell them?” “I wish I had more influence with my partners.” “Employees frustrate me.” As I teach and interact with farm and agribusiness managers, I frequently hear comments like those above. Why do managers so often feel like this?

It’s been almost a year since my last article on the subject of estate planning and Congress’ extension of the federal lifetime exemption of $5 million dollars per person. This lifetime exemption is set to expire on December 31, 2012 and revert back to $1 million dollars per person. This is a ticking time bomb for most farm estates in this country, as a $1 million dollar gift exemption really doesn’t go very far in succession planning. In these ever-increasing turbulent times for producers, futures markets drive us crazy and the media continues its barrage on commodities and crops, whether they are growing or not, which tends to sway markets (at least in my mind) in the wrong direction, making any long-term planning decisions on your operations next to impossible. But estate and succession planning, both long term and short term, are both beneficial and possible with the right team in place.

A discussion of risk management can get very complicated very quickly. It’s easy to be overwhelmed by all the tactics at your disposal. What’s the right strategy? What has the best potential for long-term success? But perhaps it doesn’t have to seem so complicated. As I was preparing to write this article, I did a little research and thought about what it actually means to practice risk management.

If the Dairy Security Act, as included in the Federal Agriculture Reform and Risk Management Act of 2012, or Farm Bill, were to pass Congress before the end of its current session in December, it would implement the act’s provisions to begin tracking an “actual dairy producer margin.” That margin would be defined as the difference between the U.S. all-milk price and the average feed cost.

Editor’s note: This is the second in a three-part series on developing middle managers. The first article in this series looked at determining the right ingredients and personality types for middle management roles. Once selected, those middle managers need to be groomed to be able to fill the owner’s or previous manager’s shoes. “You need to teach people to do what you would do if you could be there all the time,” said Mary Kraft, noting it was a favorite quote from Tom Fuhrmann’s Dairy Works seminar.