A common managerial theme in the dairy industry is “surround yourself with good people.” When it comes to risk and opportunity management for your dairy, how do you build the team? We teamed up to write this column and share the best practices we see among today’s well-run dairies. Here’s what we – a dairy business consultant and a commodity marketing consultant – see as essential steps to creating a high-functioning team that gets results for the dairy business:

Every day there are conversations of different types occurring on your dairy. These interactions happen to everyone, owners, managers and employees – and they are the day-to-day conversations that affect the life of the dairy and the life of everyone involved. It is important for your radar to be at its highest awareness because what makes a conversation crucial is: First, that opinions do vary from person to person. Second, that the stakes are high depending on the situation.

How will 2013 affect your employees? For many dairy producers, 2013 may be a challenge as surging feed prices have driven the cost of production to new highs. Are your workers aware of this situation? Do they understand your expectations or have they been receiving mixed messages during these stressful times? Who do they go to for answers when they have questions?

Progressive Dairyman Editor Walt Cooley spoke with author Kirk Kardashian about what he hopes his new book detailing the challenges facing today’s dairy industry will accomplish for dairy farmers and consumers.

Every year about this time, I inevitably get asked the following or similar question: “Should I buy that truck this year to save taxes?” The answer to this question is almost always: “It depends.” The idea behind this tax planning strategy is fairly simple – buy business equipment or other depreciable property before the end of the year, rather than next year, and get up to 100 percent expensing to offset business income for this year. The trick is making sure the equipment is something the business really needs and not just a way to reduce taxes. It is never a good idea to let the tax code make business decisions but, if asset purchases are planned in the next six to 12 months, it is worth looking to see if accelerating these purchases makes sense.

John Geuss of Adisseo discusses with PD Editor Walt Cooley a new app his company has recently released to help dairy producers calculate the economic impacts of amino acid balancing. The free app calculates the price of milk for any Federal Milk Marketing Order that pays on components. See what else the app can do in this video. PD Click here to see more videos from the Progressive Dairyman YouTube channel.

Contrary to what many may have believed to be the case given the circumstances, projected forward profit margins for dairy producers actually improved over the summer as the increasing value of milk has more than offset surging feed prices due to this year’s historic drought. This puts dairies in an enviable position relative to their counterparts in the swine and beef cattle industries, where profitability at relatively high historical percentiles can presently be secured through the second half of 2013. In fact, forward profit margins currently exist at or above the 80th percentile of the past 10 years from Q4 2012 through Q4 2013 based upon our model dairy analysis.

Back in 1993, NBA All-Star Charles Barkley found himself in the middle of a national debate because of what he said in a shoe commercial for Nike. It was a simple message, “I am not a role model.” Not a stranger to controversy, Sir Charles defended his statement. Essentially, the point of his argument was that his job was to be good at playing basketball, while a parent’s job is to be a role model for their kids and raise them well.

The tax code is a maze of varying income tax rates and rules governing the application of these rates. Navigating this maze can be a complex task but understanding the various rules can greatly aid in tax planning for dairy farmers as they manage their livestock.

Editor’s note: This is the final article in a three-part series on developing middle managers. With the right people on the Scandinavian warship and everyone busy rowing, it is time to see who rows the best, who needs more direction and who might need to find a seat on another ship. “Employee evaluations remind the employee what your expectations are, give you a better handle on performances and provide marching orders for retraining, replacing or rewarding,” said Mary Kraft, a dairy producer from Fort Morgan, Colorado.