Through this horrible downturn, we’ve all figured out which “extra” services we can cut — an employee here, a feed additive there. Maybe you’ve changed your barn chemicals or teat dip to a less-expensive brand or trimmed the price you’re willing to pay for semen or bulls.
But the easiest cut is that big line-item, management-team cost. This is a cut that does not show immediate results, but can have a big impact on your business.
Big ticket cuts
The most expensive teammates are the first target. Now, you formulate rations on piece of paper instead of it being done by a nutritionist as the new hay rolls in. You cut the frequency of veterinary palpations, and maybe some of the vaccinations. You avoid the sales people that come to your farm because finances are tight, so you miss out on a visit by the company-sponsored regional veterinarian. Even contractors like hoof trimmers get cut.
A good team is made of lots of different players in a host of roles. Unlike the tangible asset you produce daily, these folks don’t appear to generate anything. And that’s where the money lies.
With finances as tight as they are, now is the time to use your consultants — your team of experts that can be out and about while you are managing your dairy — not cut them and their services. They gather valuable information, and then help you make sense of how to take advantage of it.
Your essential teammates are:
Hands-on veterinarians that check manure consistency, whether cows are cycling (or not), incidence of illness or death and calf wellness.
The hoof trimmer who can spot a trend of hoof rot before it takes over.
Your lawyer who makes sure that contracts you sign for your new operating line of credit actually protect your interests, not just those of the bank; and helps you plan a successful succession for your business.
Your tax preparer, who looks at your books and helps you avoid pitfalls of tax consequences should you sell your business and have capital gains; who helps set a tax plan for high profit years and re-files for years to carry-back losses.
Your nutritionist, who may be able to suggest a more palatable, higher-profit ration with different ingredients because he or she has access to a computer-generated rations program, access to the latest research on micro-nutrients and the ability to get around the country to see what others are doing.
The people who can manage a spreadsheet and determine if recombinant bovine somatotropin, rumensin or other milk boosters are now cost-effective, or when they become so. They track dead-on-arrivals, displaced abomasums and abortions, then backtrack to find out what caused them.
The pharmaceutical representative who coordinates a review of vaccination protocols with your veterinarian to combine vaccinations and properly sequence the injections so labor and management can administer them. They keep an eye out for medications that can be updated to eliminate milk-withholding or be used in a preventative way.
Your consulting teammates are often in contact with new research because they are not solely working on the farm. Perhaps they are aware of new strategies that can improve conception rates and reduce culling rates.
A fresh set of eyes sees things you don’t even notice.
You get to design your team of professionals that work with you and help you constructively and consistently improve performance. You get to choose who plays, and if they complement your current team. If you aren’t sure how to get started, contact your local university, veterinarian or respected dairy farmer in your area.
No matter how you play it, it is vital that you rally your team and keep everyone’s head in the game.
Mary Kraft dairies with her husband, Chris, near Fort Morgan, Colo.