We are now in our seventh month of low milk prices. I’m sure you are tired of this low price period and its implications. Many people are stressed by their increasing accounts payable. This, of course, is normal. Remember that these low milk prices won’t last forever. Yet, I would also suggest we need to all move beyond the current dilemma and initiate action to complete a successful turnaround. I have heard the phrase “we can’t” too many times. For example: 1) “We can’t keep our milk prices high enough for long enough to even get close to our break-even point.” 2) “We can’t get our feed costs down to a reasonable level.” 3) “We can’t hire the right kind of people at our dairy.” 4) “We can’t get the appropriate financing to really accomplish what we want to do.” The list goes on. However, the truth is that you can overcome each of these barriers to success! You not only need to try, you need to adopt a mindset that literally says, “We are going to get this done!” Let’s look at the above list of items one by one.
- Do you really think you cannot reach your break-even level? First, do you know what it is? If you already know, congratulations. If not, determine what level of milk price and/or production you need to reach in order to cash flow. We will soon be offering an on-line tool to accomplish this task. Make certain that this level will also cover the principal and interest you need to pay on your loans. Once you determine that level, you can use milk options to reduce your exposure to price downturns.
- You think you cannot keep feed costs down? I have clients who are enjoying excellent feed prices. How do they do it? They study the market, stay in touch with people who can help them (because none of us can know everything…) and utilize the best nutritionists available. The combinations of these factors should assist you in keeping feed costs down. If you use a professional nutritionist, lean on them for their guidance. They can be a tremendous asset to you, and if they are not being helpful, maybe you need to find one who can more fully assist you.
- What is it that makes for a great working environment? Everyone wants to be paid fairly. However, great working conditions go beyond that. How do your benefits and other job attributes compare with other employers? Do your people get sufficient time off to spend with their family? Employees will only be happy at work if they are satisfied with conditions at home, and how can they be pleased with their home life it they don’t have one? Communication becomes critical. It allows you to stay in touch with the needs of each of your employees. Allow time for their feedback.
- You really can’t get the financing you need to accomplish the growth or other changes you want? First, have you clearly defined what it is you want to accomplish? Have you provided your lender(s) with a written plan that outlines your goals and any borrowing needs? I have worked with clients to complete the approval of many different financing plans with their banks. Many of these were plans for business growth and acquisitions, and a few of them were financial restructuring plans. They all required time, and each needed a plan that clearly outlined what we were trying to accomplish, what our proposed time table was, and what we expected to achieve in terms of cash flow and other financial results. Without a plan and some degree of flexibility, we would be doomed to meandering from one possible goal to another.
It’s time to get beyond excuses and develop goals and a plan for the future. Remember what Yoda so brilliantly exclaimed in the Star Wars episodes: “There is no try. There is only do or do not.”