Dairy Thought-Leaders Encourages Producers to Lean on Advisors, As Well as Opportunities
Recently on a Farm Journal Milk Business webinar, three dairy thought leaders talked about the importance of gathering around a table with other team members, especially during challenging times. They also encourage other producers to lean into opportunities that can help your farm's bottom line.
Lucas Sjostrom serves as the executive director of the Minnesota Milk Producers Association and is the managing director of Edge Dairy Famer Cooperative. He strongly encourages producers to talk to their milk buyer and review the details of your contract.
“What are the contracting principles, as we call it,” he asks.
Sjostrom shared that recently a Minnesota plant had assumed that they’d be paid a federal order minimum price. But when the plant called the producers the night before and told them they couldn’t take their milk anymore, all of a sudden nothing was guaranteed any longer.
“Let's make sure that farmers aren't getting tricked by processors accidentally,” Sjostrom said, sharing it’s a two-way street and farmers and processors don’t want big surprises and that communication is key.
Ed Gallegher, president of Dairy Farmers of America (DFA) Risk Management program, echoes Sjostrom's comments and says it is important to have an advisory team that producers can interact with regularly.
“I hope you also have a strong relationship with somebody that can talk to you a little bit about the milk price risk and the food price risks that are in the marketplace,” he says. “It's an important aspect to focus on. Certainly, it’s also important to work with your lender, veterinarian, as your genetics companies – particularly in a way that can improve your component production that will pay dividends year in and year out.”
Producer Viewpoint
Jeremy Van Ess, an owner of Van Ess Dairy and Legacy Dairy in Sanborn, Iowa, which is home to 10,000 cows, has actively participated in both Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) programs over the past few years, but he also looks ahead at embracing opportunities that his farm can benefit from.
“I think just from the milk price standpoint, it looks like it's going to be relatively decent, so I think there's some opportunities there,” he says. “From the feed side, we've been really active on hedging feeds and stuff right now as we finally come off of some of these crazy high old crop prices. So, that's been a big advantage, too.”
Van Ess has also benefited from upping his beef-on-dairy program. This past spring, Van Ess began raising their beef-on-dairy cross calves. Before, they sold them as day-old calves. Now they sell them at five months of age.
“There's a lot of value in that right now,” he says. “I think that's one thing we're kind of excited about is what it adds to the bottom line. This whole beef thing is pretty remarkable,” he says.
To listen to the entire conversation with these three producers talk more about challenges and risk management opportunities, click on https://fjwebinars.com/account/register/dairy-herd-management/167
