by Elizabeth A. Tomlin
“What is the biggest external change affecting your business today?” asked Nicole Tommell, Farm Business Management Specialist, Cornell Cooperative Extension (CCE) Central NY Dairy, Livestock and Field Crops team.
Tommell was speaking to a full-house audience during one of the ‘Blueprint for Change ~ Navigating Dairy Decision Making’ workshops sponsored by Chobani and partnered with PRO-DAIRY, Cornell CALS, and CCE, where a large number of dairy farms and many ag related agencies and community resource personnel were represented.
Although she said much of the information is not new, Tommell said this information needed to be taken off of the shelf, dusted off, and put into action.
“We feel it’s important to dust off the cobwebs and try to get people to be re-energized and think about this a little bit.”
It’s not news that dairy farm numbers have declined over the past 20 years as consumers, global markets and over-supply of milk impact the dairy industry.
Charts and graphs prepared by Jason Karszes, Senior Extension Associate, Dairy Farm Management PRO-DAIRY, College of Agricultural and Life Sciences, Cornell University, were used to show dairy business variability and statistics.
Tommell explained that issues affecting dairy farms were either “external,” as with the dairy prices that individual farms have no control over, or “internal,” such as family preferences and priorities.
“And what is the biggest internal change facing your business today?” she asked.
Folks attending the workshop were asked to write down external and internal issues impacting their farms on sticky notes and to stick them to designating places on the wall.
Farmers interacted with each other and the speakers; discussing how different scenarios affected their farm business.
Tommell described farm business life cycles and how external and internal changes cause conflict.
“Where in the business life cycle is your business currently?”
A graph showing the four recognized business phases was studied. These phases include; initial business start-up; initial growth; established maturity; and, maintenance/ more growth /or decline.
Recognizing and understanding what phase you are in will help you make critical economic decisions for the strategic planning of your dairy’s future.
Tommell said it was likely that most attendees had farm businesses that fell into the third or fourth category of the business life cycle.
“It’s kind of our fork in the road. Are you going to grow the business and add more cows? Are you going to get out of the business?”
Tommell quoted Spencer Johnson, author of ‘Who Moved My Cheese?’ “If you do not change, you can become extinct!”
“This is a great quote for ag management,” she commented.
Problems with the business need to be identified and defined as the first of the 6-step problem solving process.
Identification of problems is extremely important when looking at moving forward.
Write down things you and other key people in your business see as being problematic.
Once problems are clearly identified and analyzed, potential solutions may be investigated through brainstorming.
Looking at nontraditional ideas and approaches can be part of long-term solutions. Considering multiple solutions is critical when making decisions or changes.
“Change is hard, but it’s necessary,” Tommell emphasized repeatedly, reminding attendees that it is also critical to look beyond what is the easiest or quickest solution. “It takes time!”
Investing in new technology may be a solution to some farm businesses, but the cost makes this impossible for many farms.
And speaking of cost, what about those letters and phone calls from lenders reminding you that payments are overdue?
“Do not ignore lenders or creditors!” advised Christine Tauzel, NYS Agricultural Mediation Program Director and Otsego County dairy farmer. Mediation is available to help farmers come to a resolution with these issues. Tauzel emphasized that all cases are strictly confidential and solutions can be achieved.
Failure to investigate input from credited ag industry agencies is failure to recognize solutions.
It is proven that working through a formal problem-solving process will improve your outcome.
PRO-DAIRY Program Coordinator, Caroline Potter presented information about how the Dairy Acceleration Program helps small and mid-sized dairies develop a “blueprint for managing change in their operations.”
This blueprint focuses on best decisions for current situations on individual farms. Funding is available for eligible farms to improve your dairy’s future.
“The Dairy Acceleration Program, funded through New York State, pairs producers with a consultant for one-on-one financial planning.”
“Each farm’s situation is unique,” recognized Dave Balbian, Area Dairy Management Specialist, CCE CNY, who was also on hand during the programs for consultation. “Change is inevitable. We have seen it in the grocery business, the auto industry, and the retail industry — the rise of Amazon and demise of some retail chains. It’s not a surprise to see changes in the dairy industry, specifically at the farm level.”
Balbian says these changes have “certainly been painful” for many farm families.
“Some producers have converted to organic production, grass fed, and even value added, by processing and marketing their own final product(s). Others have invested in large expansions in an attempt to gain labor efficiencies and improve bargaining power for both inputs and outputs.”
Balbian said the message shared at the meetings is extremely important to the dairy industry, not just in New York State, but across the country.
Farms ultimately need to make a decision to either leave the business or grow.
“This is meant to help people think about the decision making: where their future is, where their business is, and this could help them make decisions about the future of their business.”
“Chobani sponsored these meetings and they are putting some funding into the Dairy Acceleration Program, as well,” said Balbian. “The Dairy Acceleration Program provides funding for dairy producers to pay for professionals to put together a business plan for their dairy farm. It’s an opportunity to have planning done that is specific to their own farm and family situation. Having a plan really helps you to get to where you want to go.”
The bottom line?
“There is no silver bullet answer,” said Balbian.
“Change is really what it’s all about,” commented Tommell.
These workshops, held in five locations across central New York State and the Southern Tier, were all sponsored by Chobani.
For more information on these programs contact Dave Balbian at email@example.com .