Expert Answers - Aug. 20, 2010

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The following answer is provided by Gary Sipiorski, dairy development manager at the Vita Plus Corp.


Q: What can nutritionists do to "balance the ration of financial advice" when helping producers in this economy?  

A: It goes without saying that the last 18 months in the business of milking cows has been the most stressful in the last 80 years. Nutritionists have had the opportunity to be with dairy producers on a regular schedule. They have built trust with the producers they work with. With trust comes responsibility. There should be a desire to be helpful with sound advice. Here are areas where the nutritionist can be helpful beyond the normal ration-balancing.

  • Keep producers talking about what is happening on the dairy. When communication slows, creative thought ceases. In times like these, looking at conventional concepts in an unconventional way will pave the way to doing things different and better. It is called progress. Make sure that you encourage communication between family members and partners. In times like these, people do not need surprises. The truth may not feel real good, but discussing ideas while there is still a good selection of alternatives helps people feel that they had real input into decisions.
  • Help producers understand their cost of production. This is the foundation of cash-flow financial understanding on a dairy. This is where you can play the trump “trust” card. If you have truly developed trust with your producers, they will feel confident that they can openly discuss their financials and know the information will be kept confidential. Find out what is affecting the cash-flow and help them think through what can be adjusted. Nutritionists will always find that the feed cost glares out on every cash-flow because it is such a big number. On the surface, it appears a cut in this area can make a huge difference in the bottom-line. Unfortunately, cows do not understand checkbooks. They understand comfort and they think everyday it is Thanksgiving. If you were making the right nutritional choices for the herd at $18 milk, you should still be making the right decisions at $12 milk.
  • Keep the gross income as high as possible. If you are going to be in the business of milking cows, you have to milk cows. There is no in between. Maximum milk production must be maintained. The macro economics is what you read about on the internet. The micro economics is “What’s in your checkbook.”
  • If the producer is not having regular meetings with his lender, facilitate the sessions. The lenders hold the purse strings. Have financial information available to the lender and make sure the producers understand the numbers, where they came from and what drives the financial statements. The lender wants to know that the producer knows more about their business than what the lender does.
  • Help producers understand milk marketing and how to secure a margin. Long-term marketing rules should be set in place with milk, as well as input costs such as feed, cropping needs, fuel and what else can be controlled. Producers will still have to make the final decisions, but you can help lead them to the water.
  • Be a positive source of management and nutritional information. It is easy for producers to unload their concerns on people who stop at the dairy regularly. The last things they need to hear are the problems of others or a focus on only the bad news. Be real…but be helpful! Today’s nutritionist must do more than nutrition.


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