by Betsy Hicks, Area Dairy Management Specialist
Dairy farms today are faced with difficult decisions that impact their day-to-day operations in both short-term and long-term business viability. During this drawn-out low in milk prices, attention to these decisions can be the difference between a farm being able to cash-flow through the lows, or a farm losing thousands of dollars of equity that was earned during better times. To help our producers work through difficult financial decisions, the team has facilitated profitability conversations through two means: the Dairy Acceleration Program and Dairy Profit Teams.
The Dairy Acceleration Program (DAP) “is designed to enhance long-term viability of New York dairy farms while maintaining a commitment to environmental stewardship.” Funds for business planning are provided through the New York State Department of Agriculture and Markets, and cover 80% of the planning costs. Often, farms that participate in DAP utilize Dairy Profit Teams to make decisions, based on the collective knowledge of the people sitting around the table and the best interests of the dairy. NY Farm Viability Institute (NYFVI) has also put money on the table for dairy farmers to use to start up a Dairy Profit Team, which has been utilized in a number of cases in the region.
Through participating in the DAP program and consulting with their farm advisory teams, farms we work with have made big decisions in the past year. One farm decided to purchase a line of harvesting equipment to put up their own forages instead of using custom hire for the harvest. Another farm identified the optimal number of cows to milk for highest profitability. Still others have made and implemented decisions to lower production costs and improve profitability.
Decisions around custom heifer boarding, forage harvest, cow health and labor are all common themes in meetings. Several farms have utilized DAP and profit teams to determine how they should add on and size a new facility, all while keeping in mind the future of the farm’s expansion including feed storage, manure storage and additional barn projects. The profitability of the farm and maintaining equity, profitability and sustainability into the future is always at the forefront of the meeting.
DAP and profit teams have helped dairies become better record keepers, kept them accountable on projects they want to undertake, and provided a way to take some of the mental decision load off of the farm’s shoulders. These conversations, prompted by initial dollar investment by DAP and NYFVI, have continued in many cases because of the value the producer sees in using their farm team as a sounding board to help make big decisions.