Compared with the general business world, our dairy farm businesses are small, even referred to as micro businesses. The business definition of a small business is often one with less than 500 employees; a micro business one with less than 30 employees.

Extended workers’ compensation, leaves and other disability leaves present an ongoing challenge to employers. For dairy producers, these challenges are magnified by the typical dairy’s lack of additional personnel to cover for extended absences, and the complications that arise when disabled employees refuse to vacate dairy housing. But there are proactive steps that can be taken to control the abuse of workers’ compensation and other legally-protected disability leaves of absence. Most states have comprehensive workers’ compensation laws. Most workers’ compensation systems entitle employees to a period of leave to recover from their injuries and prohibit employers from discriminating against employees who suffer workplace injuries.

Since mid-2008, we have seen milk prices as low as $10 and as high as $22. Corn, corn silage, soybean meal and other feedstuffs have also experienced significant price volatility. Day-to-day operation management in these times becomes a challenge, let alone planning for an expansion. Many questions need to be evaluated before an expansion is considered. Some of them include the following: 1. Why does the operation need to expand? 2. What will the new operation look like? 3. Where will the new operation be located? 4. How will the operation be different from a management perspective? 5. When is the best time to expand? These basic questions are naturally interrelated and need not be answered in any particular order. However, No. 1 is probably the most important and requires the closest consideration before moving forward.

One thing I like about working with dairymen is they are not afraid of taking risks to be successful. Initially, we were asked to talk about expansion opportunities for dairy operations. While that sounds great and full of risk, we’d like to expand your thinking by asking you to see risk transfer as the business expansion itself. Given today’s dairy environment, we believe it makes more sense to address expansion and planning from a different angle than what a traditional expansion looks like. Instead of expanding the dairy operation by adding more cows, land and facilities, let’s look at it from the individual owner’s perspective. For example, how does a son or daughter increase their ownership in the family dairy from 10 percent to say 25 percent or 30 percent?

President Obama signed the new tax bill into law on Sept. 27. This law contains several new provisions as well as extensions of older provisions that were scheduled to expire at the end of 2010. Many of these provisions are very beneficial to businesses engaged in agriculture and provide numerous opportunities you should consider as you review your tax situation and do your year-end planning. Expensing of equipment purchases In the past, equipment and single-purpose agriculture building (barns, hay sheds, milk parlors, etc.) purchases were depreciated over a certain period of years. Several years ago, provisions were made allowing certain dollar amounts to be expensed in the year purchased.

The extremely volatile economic situation experienced over the last few years underscores the need for effective record-keeping and sound business planning. The time to start is now. I have compiled a list of steps producers should consider taking as the year winds down. 1. Evaluate and reconcile your accounting system. The accounting system should be reconciled on a regular basis throughout the year, but on many dairy farms it isn’t completed until an accountant prepares the farm’s income taxes. Even then, depending on the firm you hire, a complete reconciliation may not be done.

There’s been a lot of discussion within the dairy industry regarding milk quality and the European Union recently. As the EU deadline for more stringent milk quality requirements nears, it seems some people are getting a little nervous about how it will affect their product’s market value. And although the extra pressure will surely make already tough times a little more stressful, is there really a problem with being expected to deliver better quality? When you think of yourself as a customer or a consumer, you’d probably agree that you expect a certain degree of quality from the items you purchase, right? So what role does quality play in your company’s operations?