You can predict the future, but the market will do what it will do anyway. With LGM for Dairy, you can defend and protect your margin when you have an opportunity.
By Marv Carlson, Dairy Gross Margin, LLC
My goal this month is to engage you in the LGM for Dairy risk management discussion of comparing the calculated margins with the historical trend from the charts created by Dairy Gross Margin, LLC.
What are your goals?
Does the margin look like I should take a closer look at securing these opportunities, or is it so low that it can only get better? Do I need to research this further to make an educated decision, or is my gut instinct telling me this is a no-brainer?
The Gross Margin is, in essence, the cash flow available to pay your fixed assets, labor, return to management and other operating costs. Maybe you can sleep a lot better if you know that you have a margin floor in place. Maybe the bases are covered for a new parlor or expansion to meet market demand. Maybe it is the much-needed vacation to enjoy with the
family. Know your cost of production. Know the margin needed to meet your goals. looking at this chart may help you take action and minimize any procrastination.
You can predict the future, but the market will do what it will do anyway. With LGM for Dairy, you can defend and protect your margin when you have an opportunity. This chart can help you see where the margin currently stands compared to the past.
The following charts are maintained month
ly and published on our website around the scheduled LGM for Dairy sales day, which is the last business Friday of each month, to help you envision the margin trend and make better and informed decisions.
Thanks for reading. Look at these charts monthly and start a discussion on risk management with your team.
Marv Carlson is with Dairy Gross Margin, LLC, in Sioux Rapids, Iowa. Contact him at marv@dairygrossmargin.com or (712) 240-8395. Visit the firm’s website for more information: www.dairygrossmargin.com.
