Managing farm profitability in hard times

Betty Berning at the University of Minnesota, USA shared tips and advice on strategies for dairy farmers to manage farm profitability when milk prices are low. In hard times like these farmers often ask: “What is the price of milk going to do?” Although the price of milk certainly matters since it is revenue, a farmer’s cost of production or expenses matter too.

There are a number of important things to manage carefully:

• Know your cost of production and carefully examine your expenses. Be sure to cut costs wisely. Do not compromise on factors such as quality feed, which could impact negatively on production and your income.

• Communicate with your financial institution.

• Maximise your assets – breeding policy and cow health are important.

• Develop a risk management plan as a way of proactively managing your future price.

The advice to dairy farmers is to take it one day at a time and proactively manage your finances as best you can. This will not change the milk price, but it will give you some control and, it is hoped, options to help you survive in difficult times. To read more, click HERE.