I hate crawling under an electric fence. The thought of catching myself on the wire is not a pleasant one, and I would much rather walk around the meadow to a gate before taking a shortcut and creeping under the wire.
When I have no other options, I find the highest possible wire setting, dig myself into the ground, and get my entire body as low as possible. I do much better if someone is there to tell me how close I am to the wire, but sometimes I have no choice but to tough it alone.
I thought we did a good job of adjusting and lowering costs last year until I started working on the budget for this year. Wow, the electric fence is not leaving me much room to crawl under. A zap here and there probably won’t hurt me, but I feel like the fence is closer than ever.
Cutting costs is not a new practice on the farm; it is something we do every year when we look at our budget. We look at every line item in the books and try to decide which area on the farm can be cut to save dollars. But this year the cuts need to be much deeper and wider than normal.
We recently attended a farm meeting that was put on by our bank. They held a panel on the current state of the industry, and one of the panelists mentioned that the most important tool on the farm comes in all colors. It is a pencil. Especially in years that we must eye every single penny that is spent, and when there is no room for error on every decision, a pencil is the most important tool.
I recently asked a neighbor how he is cutting costs in these times. He said he had an employee meeting with the farm’s managers, and he asked them to come to the meeting prepared to share an idea of how they can cut 5 percent. Bringing them into the circle like this made them part of the solution rather than part of the problem. And he was pleasantly surprised at the ideas that they came up with, some of the answers he had never thought of doing.
I like this idea for a lot of reasons, as pulling together as a team makes a farm stronger and more likely to survive this downswing. If he approached this meeting with a lot of emotion, blame, and finger pointing, his result would have been much different. Rather, the meeting was productive, positive, and resulted in extra value for the business.
After hearing about his approach, I became curious at what other farmers were doing to reach their solution. I posted the question, “How are you cutting costs?” in the Dairy Girl Network group on Facebook. I found the thread of responses interesting and most helpful. For the sake of space, I consolidated them.
- Know your costs of production.
- Be honest with yourself when looking at financials.
- Do your homework with cash flows, financial statements, and balance sheets.
- Don’t be afraid to ask professionals for help.
- Monitor herd replacement costs.
- Make sure employees are aware of the situation.
- Shop prices for supplies and doing own repairs.
- Manage culling. Don’t hang onto cows that cost money.
- Replace poor performers with higher producing cows.
- Sell young stock because it is cheaper to buy than to raise.
- Give up extra services.
- Use independent service people rather than “big name” dealers.
- Be honest with your banker and maintain that relationship.
The last comment reminds me of our banker’s advice during a year-end meeting. “This (the current industry situation) has the potential to get ugly. Don’t bury your head in the sand.”
That was sound advice. As farmers, we tend to get busy, and we allow ourselves to be distracted rather than face the challenge in front of us. Honestly, there are some days that I would rather bury my head in the sand. When I am hiding, I do not have to face the obvious.
I have never met Red Larson, but I have heard a lot of great stories about him. He is a farmer in Florida and very well respected in the dairy industry. His son John recently told us that his father often says, “When the going gets tough, the tough get going.” There is no doubt, in the past nine decades, that Mr. Larson has seen a lot of tough times. I am sure that he could share a lot of stories on how their family farm came through difficult times.
Tough going is not a new practice in this industry, and as dairymen we have a call to action this year to get tough; maybe tougher than we have ever had to be.
I found it empowering, energizing, and comforting to read over the responses on Facebook. It reminded me of another valuable tool: each other. Leaning on each other during this difficult time is probably just as valuable of a tool as the pencil. And you know, I much prefer taking a friend when crawling under the wire.
The author and her husband, Duane, own and operate a 550-cow dairy in Cochranville, Pa.