Most dairy producers would agree that the adoption and use of technology increases operational efficiencies and, in return, lowers the cost of producing milk. Clear examples include the move from stanchion barns to freestall facilities and milking parlors in an effort to increase labor efficiency, the use of artificial insemination to facilitate greater genetic advancement within a herd, as well as the use of hormone therapy to get cows pregnant earlier in their lactation to reduce total days in milk, which allows for more lifetime milk production. More recent technological advancements include rbST, synthetic feed additives and gender-sorted semen. While some dairy producers find these more recent technologies to be controversial and “bad for the industry,” I find them to be tremendous tools that help lower my cost of production, making my dairy business more profitable.

Minnesota dairy farms made a significant comeback in 2010 after a very challenging 2009. With 557 dairies participating in Farm Business Management (FBM) programs, Minnesota dairy operators are in a unique position to benchmark their operations against a large subset of the state’s dairy operations. Participating farms complete a detailed annual financial analysis of their farm and each farm enterprise. Individual farm results are combined in the FINBIN database hosted by the Center for Farm Financial Management at the University of Minnesota (www.finbin.umn.edu) and made available to the public in summary form. FBM reports are also available at www.fbm.mnscu.edu.

With milk prices higher than they have been since 2008, many producers are finding they have more money left over each month after paying operating expenses and normal principal and interest payments. Many have paid off or drastically reduced operating debts incurred in 2009. Taking advantage of their increased cash positions to evaluate various options which include paying down debt, these operators are generally prioritizing debt reduction as follows: 1. Accounts payable 2. Operating lines/feed lines 3. Intermediate-term cow lines/equipment loans 4. Long-term facility/real estate loans

This article was conceived to be business tips to implement during the economic recovery. Unfortunately, the word “recovery” appears to be misplaced and too optimistic. Recent economic news on the national front and anecdotal news from our clients indicate the economy has not yet reached the stage of recovery. There still appears to be a flat line or even a continuing downturn in the economy. This may continue for some time as the deleveraging cycle continues and the economy continues to be impacted by the mortgage debacle.

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.

Death rates of adult cows on U.S. dairies have risen steadily over the last couple of decades. When calculating death losses as a percent of rolling herd inventory on an annual basis, it is now typical for dairies to have 8 to 10 percent mortality. If we look at literature from 30 to 40 years ago, it appears that 1 to 3 percent mortality losses were typical. Unfortunately, this feature of dairy animal performance has not been historically monitored as an important aspect of herd management, and there are no established benchmarks or targets.

Chances are, you attended at least one seminar this past year where one of the speakers gave advice on how to improve your business management skills. It always seems that these “experts” essentially say the same thing ... analyze this, analyze that; do this, don’t do that. And although many times we don’t actually implement all of this “common sense” advice, the truth is they’re usually right. And at the risk of trying to impersonate someone who professes to know what he’s talking about, when was the last time you did a SWOT analysis of your business? Basically, what are your Strengths, Weaknesses, Opportunities and Threats?