Will You Be Ready?

John Ellsworth

John Ellsworth
John Ellsworth of Success Strategies, Inc.

This has been a tough two and a half years since 2014. Some have described it as brutal, like “dying a death of a thousand blades; just slow and painful.” By the time you are reading this article, I hope that milk prices have taken a turn for the better. Today, as I write it, milk prices look like they are heading upward.

In the aftermath of what every producer has experienced the past 30 months, you are likely at a decision point. Do I continue? Is it time to get out? Many producers are uncertain. Regardless of the choice you make, we are entering a new era: Many of our costs have climbed to levels that may seem unreasonable, but when we are competing with other industries for certain resources (and they have higher profit margins to support their efforts), it can be very difficult.

So, what can we do? Two items come to mind for me. Every successful producer will need to boost Feed Efficiency and Labor Efficiency. Can we boost our Energy Corrected Milk with the same or lower levels of Dry Matter Intake? This will be key, especially as we continue to compete for both land use & feed items in a global market.

Likewise, regardless of your sentiments about immigration, the status of legal or illegal immigrants, or the minimum wage battles, Labor Efficiency will continue to also be a major factor in your success. Can I produce the same milk with lower labor costs? Can I produce more milk per cow with less labor? Do robotic milkers have a role in boosting my labor efficiency?

Remember, the key is to keep making forward progress, even if it is in small increments. I get very concerned when people throw their hands up in frustration and give up. On the contrary, never let what you cannot do interfere with what you can. There is always something you can do. Instead of stating, “I can’t,” ask yourself if that is what you really want. If not, start thinking about what you can do. Maybe you could not always cash flow the past few years, but you could do some other tasks. How about cutting some expenses to reduce your losses? How about building a margin in with Puts and Calls?

To summarize, think about what you want for your business. Do you have a clearly defined plan for your operations? Be honest with yourself, but think about the following:

  • Do you know what you want to achieve?
  • Are you confident you can get there?
  • Are you taking all the necessary steps to reach your objectives?
  • Be sure to ask the right questions: “How can I improve my results?”
  • Run the “What If” scenarios. These can be critical to your success.
  • Finally, if you need help, get it. If I can help you, please let me know.
  • Check out our Strategic Gameplan Series at success-strategies.com

Start reviewing your available options today. There is no better time to start than the present moment. Think about it.

Someone has to take responsibility. I will.”

Winston Churchill, Former Prime Minister of Great Britain

John Ellsworth is a business and financial consultant at www.success-strategies.com.  He can be reached at 209.988.8960.