Where Does This End?

We are currently facing some real financial challenges in our country and, more specifically, in the dairy industry… It seems as if many economic events are completely out of control.

Inflation has been raging at the highest levels since the early 1980’s, and many suppliers are using this as an excuse to raise prices dramatically, an action they have been unable to do for many years. As a result, it costs $500 just for someone to show up and evaluate what the problem is with your piece of equipment, let alone provide you with a solution.

Will these costs ever go down? This is not likely, as evidenced by the last bout of inflation in the early 1980’s. All of this calamity has been compounded by the Federal Reserve Board raising interest rates extensively the past 24 months, in an effort to reduce the inflationary impact. Since they were relatively “late to the game,” their impact has been one of potential over-correction and has hurt all borrowers. This includes many businesses.

What can you do? If you are running a dairy operation today, you must prepare a Budget and monitor it relentlessly. If you aren’t doing this regularly, you could fall behind.

What if I prepared this budget for you? Would that help? Our Success Strategies Advantage™ software is designed to take the pain out of this process. I would encourage you to look at it at www.success-strategies.com. When you get to the website, just look for the milk can. The program will be right there for you to explore. What can it do for you?

You can run various “What If” scenarios within it in order to figure out what various repayment schemes will work for you (15-, 20- or 25-year amortization periods). For each scenario, it also will provide you with the following items:

  • A Year-to-Date (YTD) Cash Flow Comparison of your operation compared to a budget that is based upon typical numbers for your region of the country.
  • It will show you where you may be over or under budget.
  • It will provide you with Break-Even Levels for Milk Price/cwt, Feed Expense & Production per cow per day, all useful information for reaching higher levels of profitability, as well as setting your price level coverage through the Dairy Revenue Protection (DRP) and Dairy Margin Coverage (DMC) programs.

It will equip you to better understand where you might be over budget and help you to talk with your Team (e.g., Nutritionist, Veterinarian, Financial Consultant & Others) about how to refine your numbers. Check it out at www.success-strategies.com.

And wait. I believe the Milk Futures were up again today. There’s hope!

Let’s take your business to the Next Level!

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