The past year has been full of celebrity infidelity and scandal. I’ve always been a news junkie, and it’s amazing to me how tabloid gossip has gained newsworthy status. In one of the “news” stories Tiger Woods’ former adviser was quoted as telling Tiger to “stay away from Michael Jordan,” claiming he was a bad influence on Tiger. Honestly, who’s really going to believe that No. 23 was the reason Tiger had extramarital affairs with a dozen women?!? But somehow, this guy attributes Jordan with leading his former client astray. It was also reported that Tiger’s best friend helped arrange his mistresses’ travel plans so they could join him on trips and have hotel rooms adjacent to his.

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.

With the exception of the spot period for nearby Q4 2010, the forward profit margin outlook for dairy producers is unfortunately poor as negative returns are reflected throughout next year. In our last installment of this margin outlook in July, forward profit margins in 2011 were still projected around a breakeven level through the first half of 2011, although this has since changed as forward values of feed costs and milk have diverged over the past few months. As of mid-October, profit margins for the first half of 2011 were projected at a loss of around $2.00 per hundredweight (cwt), with losses of about $0.80 per cwt projected in Q3 2011, which we have also started tracking since our last update in July.

How much is $13,552,485,816,852? Let’s consider one billion first. One billion seconds ago it was 1959. Now multiply one billion by 13,552 and you have our national debt. But don’t stop there – it is constantly growing. A number that is easier to comprehend is $43,371 – each American’s share of the debt. Why don’t you go ahead and tack it on to your balance sheet? How did we get here? In all but four of the last 30 years, our U.S. government has spent more money than it has brought in. The most recent federal budget deficit, fiscal year 2009, was $1.4 trillion – the largest in the history of the U.S. In terms of gross domestic product (GDP), the deficit was 10 percent in 2009 – the highest since World War II. Final numbers are not available for 2010, but the Congressional Budget Office (CBO) estimates it will be around $1.3 trillion.

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.

The day after the auction of the cattle and equipment provides a mix of emotions for a dairyman. There is a bittersweet sense of relief that he is no longer responsible for milking and feeding his herd, but now that he has all this free time to think, he is afraid. What is in store for him in the future? As he stands in the vacant freestall barn, he starts to wonder what will happen to him and his family now that he no longer has to be on duty 24/7. He starts to worry. What is he going to do? Maybe selling the farm was not a good idea after all. After the sale of the real estate closes, he will have 30 to 60 days left to live in the farmhouse. Where will he be living after that? Who is going to hire a middle-aged man who has always milked cows and worked for himself? The feelings of anxiety are natural. The dairyman is leaving his comfort zone and walking into the unknown.

As we enter the fall months of the year, it appears that we finally have milk pricing that would put us in the black once again, but how long will it last? We are already seeing the Class III market on the CME fall below the cost of production for the first six months of 2011. Beginning in 2009, we have endured unprecedented losses. For approximately 10 months, we experienced losses averaging $5 per hundredweight (cwt), which was followed by another eight months of less than breakeven prices. We have seen our cow loans stretched to the maximum, our feed loans out of compliance, our property values falling below desirable levels and our cow values falling as well.