I am not making light of the fact that the dairy industry has had a tough 2015-2017, or, for that matter, that all industries have their moments when cash flow is tight. However, the vendors that he was referring to had been extending him as much credit as they possibly could these past 27 months. However, they were running into two big issues.
While there are many profitability variables to contend with, and this research does not suggest that ignoring one of the lower correlated variables would ever be a good idea, the top three are all ones that I have had the opportunity to deal with in each and every financial turn-around situation.
Since early 2015, the dairy industry has been a difficult place to operate. Despite feed costs dropping considerably these past two years, the decrease in this expense area pales in comparison to the precipitous drop we have seen in milk prices since the end of 2014.
Let’s face it. This year and 2015 have both been tough financially! So, how are you faring these days?
At a Leadership Conference at Duke University several years ago, I enjoyed a keynote address given by Duke University’s head basketball coach Mike Krzyzewski entitled “Building a World Class Team.”
One of the most common problems faced by many business people today revolves around their ability to obtain the financing they need.
Set goals for your Team and tell them what’s in it for them. For Coach K, it has been to win multiple gold medals for the United States. For you it might be to increase production per cow to a certain level or to reduce the average days open in your herd and shorten your calving interval. You decide. You might be surprised how interested your employees are in helping you reach your goals.
The savings and loan debacle of the 1980’s changed forever how banks were required to document and monitor loans. 2008’s financial meltdown simply amplified this same effect.
Business advisors George Ford and Gordon Lippitt summed it up best: “Some self-confronting questions: ‘Where do I want to be at any given time?’ ‘How am I going to get there?’ ‘What do I have to do to get myself from where I am to where I want to be?’ ‘What’s the first, small step I can take to get moving?’”
Do you feel like your lender is being tough on you? Welcome to the new world of dairy finance.
