When it comes to evaluating debt load, consider using debt per hundredweight of milk instead of debt per cow, says Tim McNamara, vice president-capital markets at AgStar Financial Services in
McNamara suggests using the following ratios:
Debt per hundredweight: <$20.00
Total liabilities for the year
Total cwt of milk sold per year
Debt service per hundredweight: < $2.50
Total principal and interest for year
Total cwt of milk sold in a year.