During tough economic times, it is prudent to evaluate the efficiency of your business. There are many measuring sticks for success, but the most useful during good and bad times is cost per hundredweight generated from accountant summaries.

When times are tough farmers often ask: “What are the most profitable practices under these conditions?” The answer usually disappoints those who ask it because practices that maximize profitability when “times are good” are the same practices that help maximize profits (or in many cases, minimize losses) when “times are tough.”

The underlying success of a business agreement depends on healthy family relationships. Probably more two-generation business arrangements fail because of poor family relations than for any other reason.

Editor's note: The following is the last of two articles. In the August 11 issue of Progressive Dairyman, Bernard Erven explained the challenges and fears managers face during difficult times.

Life is all about choices. Some work out great, some not well at all. The key, though, is to always have a choice -- because the alternative is not pleasant. I have experienced such situations in my lifetime.

Here is a simple question: How much did the raw milk in that gallon of milk in the dairy case cost to produce?

As dairymen begin to work smarter and realize they must work within the laws of supply and demand concerning the production and distribution of their milk products so as to make a profit, various brainstorming ideas have been presented to eliminate unreasonable amounts of surplus milk or surplus milk altogether.

We have a number of terms and numbers thrown at us, especially in financially distressed times like now.

Before beginning any type of two-generation business arrangement, the parties involved should examine their situation carefully and make a preliminary judgment of their potential for developing a successful two-generation farming operation.