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National Farm Business Management Conference

National Farm Business Management Conference . Tools to help Ohio’s dairy farmers manage in challenging economic conditions Dianne Shoemaker The Ohio State University Extension shoemaker.3@osu.edu. Class III and Support Price. COP. 2005. 2008. 2003. 2007. 2009. 2006. 2004.

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National Farm Business Management Conference

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  1. National Farm Business Management Conference Tools to help Ohio’s dairy farmers manage in challenging economic conditions Dianne Shoemaker The Ohio State University Extension shoemaker.3@osu.edu

  2. Class III and Support Price COP 2005 2008 2003 2007 2009 2006 2004

  3. How do I know if I’m profitable?How do I know if I’m competitive?How do I survive?

  4. Simple and Useful: Cost of Production Worksheets

  5. Dairy Issue Briefs http://dairy.osu.edu -Nutrition and feed costs -Reproduction and health -Calf and heifer management -Business issues -People and stress management

  6. How should I take on additional debt…continued

  7. Download at: http://dairy.osu.edu Purchase online at: http://estore.osu-extension.org/

  8. Why the 15 Measures? • What are competitive NE & Midwest milk producers doing? • Where does an individual farm stand in relation to competitive dairy farms?

  9. Ten Areas: • Rate of production • Pounds of milk sold/worker • Cost control • Total feed cost per cwt milk sold • Milking herd feed cost/cwt milk sold • Operating expense ratio • Capital Efficiency • Dairy investment per cow • Asset Turnover ratio • Profitability • Net farm income • Rate of return on farm assets

  10. Ten Areas: • Liquidity • Current ratio and working capital • Repayment schedule • Scheduled debt payment • Solvency • Debt to asset ratio • Debt per cow • Mission • Maintain standard of living • Motivated labor force

  11. The Measures Provide: • Number, ratio, percentage, or description • Specific instructions for calculation • An example calculation • Brief description • Specific recommendations for firms that are above or below the competitive level

  12. How the 15 Measures may help: • Evaluate an existing business. • Help the farm get a better feel for where the business could go. • Identify priority areas the farm needs to work on to meet business objectives. • Cautions: • Looking at one or two measures does not a complete evaluation make! • Look at the whole business.

  13. Key measures for 2010 • Working capital • Debt/Asset ratio • Debt per cow • Debt repayment schedule • And…

  14. Different Farms… ...Different Costs

  15. In Summary… • Our dairy farms are facing unique challenges in 2010…following 2009! • Successful farms must monitor key competitive measures and their costs of production • Tools available at http://dairy.osu.edu

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