Managing Your Milk Margin to Improve Your Dairy's Cash Flow

Create a cash flow and determine your dairy's income over feed cost at this one-day workshop!

The dairy industry is constantly changing and evolving. The perception is that producers can do very little to control milk income and on-farm profitability. This is not true — Producers can learn to manage risk to control their future.

Exerting control requires that producers know their break-even income over feed cost and their milk margin break-even. Knowing these costs will help dairies adapt to changing conditions as they develop.

Penn State’s risk management team has developed a one-day workshop where producers can complete their annual cash flow and determine their income over feed cost/milk margin breakeven.

Knowing this vital information will allow producers to use several risk management tools to maintain an operation’s margin — something that is especially important when milk prices are trending low and feed costs are trending high. And with many parts of the country experiencing extreme weather conditions (flooding and drought) this year, it will be important to monitor a farm’s margin with potential high feed costs on the horizon.

Training is hands-on and is limited to small groups of no more than 8-10 farms.

Workshop Agenda

Hours: 9:00 a.m. to 3:00 p.m.

AM Session: Completing the individual's cash flow

The morning session provides a hands-on opportunity to actually complete the individual's dairy cash flow. This portion of the workshop will focus on entering the ration and crops and annual cash flow information into Excel. Producers will bring their own data to the workshop to use in the planning process. Some intermediate knowledge of computers is helpful.

Click here for a list of data to bring to the workshop.

PM Session: Risk management strategies relevant to the individual dairy

The various risk management strategies available to producers will be reviewed. Producers will know their income over feed cost and milk margin breakeven from the morning session. This will make discussions about various strategies relevant to an individual's operation. Discussion will also include monitoring the farm's financials and making decisions earlier so profitability is not compromised.

More Information

To schedule a workshop for your group, contact:

• Virginia Ishler, nutrient management specialist, Penn State Extension Dairy Team: vishler@psu.edu; 888-373-7232

• Tim Beck, Extension educator, dairy business management, Penn State Extension Dairy Team: tbeck@psu.edu; 717-240-6502

SmartStart Credit

This workshop qualifies for 2 SmartStart credits from AgChoice Farm Credit.