“With the way the economics have been in the industry the last couple years, you better have a strong relationship with your lender,” advised Scott Benner. He is a co-owner of Hunter Haven Farm in Illinois.
The dairyman, who helps manage the farm’s 1,100 cows that average a 90-pound tank average, went on, “They need to know what the numbers are, they need to know how you derived them, and they need to know what your plan is to plug the hole. I’ve learned that just because the numbers are ugly — and they are ugly — doesn’t mean that you can’t keep moving forward.”
He, along with co-owner Doug Block and Iowa dairyman Terry Van Maanen, served on a producer panel at the Four-State Dairy Nutrition and Management Conference. The group shared practical insights for how they are managing through difficult financial times.
At Hunter Haven Dairy, their keys to “plugging the hole” included working with a strong financial team, knowing what their numbers were, budgeting, and reviewing them each month. Benner also emphasized not fearing the numbers and challenging the system.
“Challenge the system. What I mean is that we sat down and went through the budget line by line. We asked ourselves why we were doing each thing and then we asked if there was anything we could do differently to either raise income or decrease costs,” Benner said.
Get rid of high speed
For Van Maanen, who manages 1,200 cows with a 28,000 rolling herd average, working with a financial consultant has also aided his business.
“The accountants that help put my financial reports together can look at the numbers and help me see what’s out of place and what I can do to improve them,” he said.
Digging a little further into details on the farm, he said the three things that have really helped him control costs have been focusing on not losing components, keeping equipment current to control repair costs, and taking the high speed out of the skid loaders.
“This is kind of trivial, but I’ll tell you what. Someone told me to take the high speed out of the skid loaders. We always had a lot of repairs on skid loaders and they didn’t last. When I took the high speed out of my skid loaders, wow what a difference that made,” he concluded.
Van Maanen also breeds his cattle exclusively with sexed semen or beef semen. His goal is to add value to bull calves and get his breeding costs more in line with his goals.
The last few years haven’t been bellwethers, but the numbers can’t be ignored either. Take a look at those opportunities on your farm to plug the holes.