The tax accountant, lender and on-farm management team each compile financial statements with very different goals, and each interpretation serves its unique purpose. Understanding the goals of each stakeholder is critical as you work to make strong business decisions.

Asset turnover may not be the flashiest ratio, but it’s one of the most telling. It’s a window into how well your operation is using its resources. And when paired with the DuPont system, it becomes a powerful tool for diagnosing financial health and guiding smart decisions. 

Have you prepared yourself, your team and your operation to be resilient of the many risks that may occur and/or prepared to be ready for the many opportunities that may present themselves?

Here’s the catch. IOFC only tells us the economics of what’s going into the tank, not what’s going into the cow for good health and reproduction, and impacting the farm’s true profitability. It measures how well we are converting feed dollars into milk dollars. IOFC values today’s milk but ignores tomorrow’s pregnancies.

In some cases it is better to repair farm equipment and other times it is better to replace. Knowing when to take action on one versus the other is also part of a bigger strategy for managing your dairy operation.

Whether you are currently planning to invest in a piece of technology on the farm or are considering it in the next five years, advanced preparation is the key to a positive implementation process and impact to the bottom line. How do you know where to start?

Yes, volatility is here, and it’s likely here to stay. But there are steps you can take to manage through it. Dust off your risk management plan to preserve working capital and discounted core equity, building a resilient business model for the future.