The 2015 forecast for milk price income on dairy farms is looking to be less than it was in 2014. Many dairy farmers are concerned about this and are wondering what they can do to make it through this period of depressed milk prices.
Ohio State University Extension has developed a number of resources that may be of help. In 2009 OSU Extension Educators and Specialists developed several Dairy Issue Briefs to assist dairy farmers with lower milk prices. It has been a few years since these got much attention, but now may be a good time to review them to see if the suggestions and recommendations are applicable to your situation.
Available at http://dairy.osu.edu, the DIBS are short, one to two page articles that address specific topics. Subjects include animal nutrition, health, communication, economics, employee management, and breeding.
Here is a list of selected articles:
- How can I lower feed costs in a management intensive grazing system?
- How do I answer big financial questions?
- Are there opportunities to decrease my current debt payments?
- Communication: listening during times of stress
- Therapy of clinical mastitis in tough economic times
- How to keep employees when cash is short
- Ingredient replacement opportunities
- The importance of knowing dry matter concentration when buying (or selling) feeds.
This is not an all-inclusive list, but rather just a sample of a few of the articles that are available. Each of the DIBS is concise, explains the causes for a particular situation and ends with a take home message that provides steps for addressing the topic. I encourage you to check out http://dairy.osu.edu to learn more about these Dairy Issue Briefs.
Farm financial analysis
Was 2014 a profitable year for your farm? Which enterprises were profitable? Which were not? How does your farm compare to similar farms in efficiency? In profitability? What does the competition look like?
Volatility in feed, grain, milk, land, and rental markets have created uncertain profit margins and financial security concerns. Completing a farm financial analysis is an effective way for farms to know their costs of production, profitability, and financial ratios.
Farms can track year-to-year changes, identify problems early, and benchmark against peer farms, as well as control information critical to effective participation in risk management programs.
The Ohio Farm Business Analysis and Benchmarking Program can help farms answer questions by completing a financial analysis of the whole farm and each enterprise. An analysis will provide a farm with the year’s beginning balance sheet; income and cash flow statements; year’s ending balance sheet; financial standards measures; and enterprise analysis including cost of production and personalized benchmarking reports.
This year, there are two options for farms to participate in the Ohio Farm Business Analysis Program. Farms that have good financial and production records can do the analysis of 2014 now. Forms can be downloaded at http://farmprofitability.osu.edu.
All farm analyses will be completed by the end of May 30th. Individual farms will receive their farm’s analysis as soon as it is completed. State summary and benchmarking results will be available this summer.
Can’t go back and find the information needed to analyze 2014? Through the “Ready, Set, Go” program, you will learn what financial and production information to keep and how to collect it in real time.
By the end of 2015, you will have everything needed to analyze how your farm business performed and will learn how to use your analysis to manage your farm and your farm’s risk. Choose from classes, on-line webinars, or videos, along with personal assistance, to guide you through the year from start to finish with a Farm Business Analysis.
Cost for the program is $100 per farm, which will include up to 3 on-farm consultations.
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