When it comes to effective employee management, what’s the most important thing you can do to ensure you’re successful with your team? I’m sure we can all create a list of characteristics, concepts and techniques for effectively managing your workforce. But it’s a lot simpler than that. So let’s start at the very beginning. The most important thing you can do to make employee management easier and more effective is to hire better employees. Yeah, you probably already knew that.

Let’s begin by comparing owners/managers of two businesses. Our first business is a fast-food franchise that sells products specified by the parent firm to a largely unchanging clientele. Our second business is an upscale independent restaurant in an ever-changing retail location. The businesses are similar in volume of sales and net income. Let’s now compare the roles of the two managers. The first manager works in the business and manages employee hiring, scheduling/performance management and develops, monitors and improves all of the processes required to produce a consistent quality food product. He is primarily a worker and manager.

“To retain respect for sausages and laws, one must not watch them in the making.” — Otto von Bismarck (Chancellor of the German Empire, 1815-1898) Recently, I traveled to Washington, D.C. to attend the American Feed Industry Association (AFIA) Board of Directors meeting. Each year, this meeting is held in the nation’s capitol to allow visits to senators, congressmen, USDA, FDA, the U.S. Commodity Futures Trading Commission (CFTC) and other government officials. I have made these visits a number of times over the years and they always make for interesting discussions. That said, seeing the political process up close reminds one of sausage making – it’s not a pretty process, although the final product can be quite good.

Just over 12 months ago, I reported Xcheque.com’s analysis of the delicate balance of supply and demand in the U.S. market. At that time, the milk price and margin available in the U.S. was at odds with the value of milk commodities in international markets. The conclusion that U.S. milk was undervalued has proved correct with prices rallying and a return to more sustainable margins for most of 2011. So how do things look one year later and what is the prognosis for the rest of 2012? Unfortunately, the current state of the market is an ugly sight and is only going to get worse if you believe that the futures market is a guide.

More and more dairy producers are learning about their risk management tools and strategies. However, the industry is “a long way from maturity” when it comes to consistent use, says John VanSickle of the Food and Resource Economics Department at the University of Florida. Maybe that’s because producers are finding a lot more success producing milk these days. Record production is predicted for 2012 and, while educators are doing their best to increase use of available tools, barriers to price risk management still remain.

California dairy producers and cheese makers filled the room and faced off at a Sacramento public hearing called to determine if adjustments are needed in the pricing structure for Class 4b milk. On May 31 and June 1, dairymen and their trade association leaders emphatically called for fairness in pricing that more closely tracks the Class III whey value. Cheese makers speaking at the hearing claimed changes that result in higher prices set for the milk used in cheese production would drive more production out of the state, discourage investment in California cheese plants and leave them at a competitive disadvantage.