"We’re aggressive in buying our feed when prices are, historically, in the lower one-third of the market," says east central Wisconsin dairy producer John Kappelman who is well respected for his purchasing know-how. That same aggressive approach also applies to marketing their milk when contracts hit the historical upper-third of the market.
Kappelman, who dairies with his brother Pete, shared this advice recently on a dairy tour sponsored by Citizens State Bank of Loyal, Wis.
Through their aggressive strategy, the Kappelmans currently have a final milk price that is $2 above their cost of production. The brothers spend three to five hours a week implementing their marketing plan, but they don’t chase market highs.
"You can’t worry about leaving something on the table," John Kappelman says. "We worry about our margins, not specific milk and feed prices. There is no greater financial risk than human greed."