How often have you heard about the importance of having financial statements? Perhaps you have heeded that advice and have used a variety of spreadsheet tools, software and outsourcing alternatives for creating accurate balance sheets and accrual income statements. Now what?

As a dairy producer, navigating the complexities of financial reporting can be a daunting task. One area that requires special attention is the accounting for leases, particularly with the implementation of the Accounting Standards Codification 842 (ASC 842).

“Leave me alone and let me farm!” I’ve heard this from many a client over the years, sometimes in response to my request for timely financial reporting. But it is the wrong response. 

The underlying factor when trying to make big decisions on whether to build a freestall barn, heifer shed, new parlor or that new robot barn is what it will be worth once it is erected and operational.

If we go back 10-plus years, most dairy farms bred all their cows and heifers for dairy calves and raised all heifer calves as dairy herd replacements.

Lenders tend to put a lot of weight on the strength of the balance sheet and primarily appraise tangible assets to make our balance sheet flow. This helps to set sale prices and make lending work. 

Borrowing money to pay the bills? If that’s you, you are not alone. As a dairy consultant who helps farmers increase income and efficiencies and reduce their expenses, these are the phone calls that have been coming in recently as worries loom over what’s to come in 2023.

There’s a lot of buzz around renewable natural gas (RNG) as a means for dairy farmers to diversify revenue while improving their carbon footprints. For many operators, it can be a particularly attractive option, especially given the current market and economic conditions.