One of the many challenges of understanding dairy financial statements, and dairy operations as a whole, is understanding how to handle the biological and seasonal fluctuations so prevalent in the industry.

Pinch points – every facility has them. They are the areas in your existing operations where efficiencies die. Daydreaming about new robots, innovative irrigation systems or a new rotary parlor can be fun, but in today’s dairy industry, cash reserves and line of credit availability are not as abundant as they have been in the past.

As a rule of thumb, I try to never use rules of thumb, especially when evaluating a dairy operation. Every dairy operation has its own strengths, weaknesses, challenges and goals.