Margins in the dairy industry in the past several years have forced dairy producers to further fine-tune their financial strategies.
According to data summarized from 61 U.S. dairy farms, the top 30 percent have some similarities in how they look at financials and management. At the Four State Dairy Nutrition and Management Conference, Vita Plus’s Gary Sipiorski highlighted eight things that the top third of these herds did.
1. Benchmarking against competition and themselves
2. Know balance sheets
3. Understand accrual adjusted income statements
4. Maximize income with marketing over cost of production
5. Maximize components and low somatic cell counts
6. Measure expense effectiveness
7. Business planning
8. Quarterly adviser meetings
According to Sipiorski, financials, particularly cost of production, will define dairies that excel year after year. He left the crowd with this thought, “In the coming years, dairies will have to be able to produce milk for $17 per hundredweight. We have to produce at that level.”