Plan for a successful year on the dairy farm

We have turned the page to a new year. While 2022 has begun, we are still dealing with many of the same challenges that have been with us longer than we care to remember. It is my hope this article will provide you with management recommendations to help your dairy be successful this year.

Inputs

Availability and cost of inputs, especially chemicals, fertilizer and parts, continues to be a concern in agriculture. A recent Ohio State University Extension Precision U webinar included a panel of industry experts discussing parts and technology amid the supply chain issues impacting the agricultural industry.

While it is impossible to say when issues will ease, each panelist agreed that patience and proactive planning (including back-up plans) is critical.

Arrange time to talk with input suppliers. Discuss your anticipated needs and their thoughts on price and availability of crop inputs. Think about plans B, C and D if your first plans do not materialize.

If you haven’t already, now is the time to assess parts you will need for planting and harvesting equipment. Don’t assume the parts you need will be sitting on the shelf. Inspect equipment and get your name on the list for parts that are presently not in stock.

Fertilizer availability and pricing continues to receive much attention. Having recent soil tests is critical to making fertilizer application decisions. What fields are high in nutrients and could get by with limited fertilizer applications this year? Which fields can you not afford to not apply fertilizer?

While you may decide to reduce the amount of fertilizer you apply, it’s not recommended you skimp on lime applications where needed. Lime is critical to maintaining soil pH and allowing plants to utilize nutrients most efficiently.

Milk pricing

In the December 2021 U.S. Department of Agriculture Economic Research Service Livestock, Dairy, and Poultry Outlook, milk prices for 2022 were projected.

Price forecasts for 2022 are provided in the table. Keep in mind these are projections and many factors can influence price.

Financial Planning

Can you be profitable with the projected milk prices? It’s difficult to answer this question without first knowing your cost of production.

One way to determine your cost of production is to enroll in the OSU Extension Farm Business Analysis and Benchmarking Program. This program utilizes beginning and ending balance sheets, and input forms to determine production costs. In addition to a whole farm analysis, the program can also evaluate the financial performance of individual enterprises.

To view the most recent dairy analysis of enrolled farms, contact your OSU extension educator, or visit farmprofitability.osu.edu/sites/fprofit/files/imce/2020%20Dairy%20Summary_0.pdf.

The FINPACK program at the University of Minnesota is another great resource for financial management information. FINBIN is part of the FINPACK program and provides comprehensive financial and production benchmarks from hundreds of dairy farms. Additional information is available here at finbin.umn.edu/.

Budgeting

The 2022 crop will likely be the most expensive ever planted. To assist in planning, OSU Extension has released 2022 Enterprise Budgets. These are available at farmoffice.osu.edu/farm-management/enterprise-budgets#2022 or by contacting your local extension office.

The table summarizes expected total costs for corn, corn silage, alfalfa hay, and alfalfa haylage, based on assumed yields. Keep in mind, your costs may vary.

Summary

Attention to detail, pushing the pencil, and developing plans (with alternatives) will be important in 2022.

I encourage you to meet regularly with your extension educator, lender, input suppliers and other trusted advisors. Talk to these professionals, read, and attend educational programs to get answers to your questions to make well-informed decisions.