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BOTTOM LINE THURSDAY, SEPTEMBER 5, 2019 SECTION E
Sharing ideas, solutions, resources and experiences that help dairy producers succeed.
Plan now for 2020 business
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usiness planning or budgeting is often considered a once-ayear project. While setting a baseline budget or plan for each year is important the reality is that planning for a dairy operation is an ongoing aspect of management. With the challenges of the planting and growing season this year along with the current opportunity provided by higher milk prices, it’s not too early JIM MORIARTY to start planning for next year. Critical decisions about forage and feed needs will be made during the next couple months. They’ll have a big impact on 2020. As producers look ahead they should also evaluate cash-flow demands and capital-replacement priorities. Determining and obtaining feed needed on dairy operations for the next 12 to 15 months will be more challenging than normal. With winter kill on alfalfa, delayed and prevent planting, and periods of heavy rain during hay harvest, this year’s crop yields and quality will be more variable than usual. Commodity prices range widely with each crop report. It’s important for farmers to identify how much forage and grain will be needed for next year for their targeted cow and heifer numbers, then make the best assessment on yields and quality of their own raised feeds. That will help determine where there are gaps that need to be filled. There may be opportunities to buy high-moisture corn or silage from neighboring grain farmers this fall; be prepared for those opportunities as they arise. Producers should know what prices they are willing to pay, their harvest windows, ability to store and separate feed of different qualities and how much cash is needed to buy feed. From a whole-farm standpoint, now may be a good time to evaluate cash flow and payment priorities. Milk prices are at a much higher point than in recent years, which should enable positive cash flow. Cash flow available after meeting operating expenses and debt payments each month should first be allocated to obtaining sufficient feed inventories and then paying down any accumulated account payables. The next priority would be paying down operating lines of credit to rebuild funding availability and working capital for the future. Assess for capital replacement, purchases Once feed inventories, account payables and lines of credit are situated, assess the need for capital investments. After several low-margin years, it’s likely deferred replacement of equipment and facilities will need to be addressed. That aspect of cash-flow planning takes more careful analysis because those items are typically higher cost. There usually isn’t sufficient cash or borrowing availability to take care of everything at once. Replacing or updating items that are essential to the efficient daily operation of the dairy should take greatest priority, including feeding and milking equipment and cow-comfort items such as curtains, stalls and ventilation. As labor availability continues to be challenging, investments
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Please see MORIARTY, Page E2
Estimate fair price for corn silage
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hroughout Wisconsin there’s considerable variation in corn growth due to the cool wet spring and delayed planting. Much of the state’s corn acreage will likely mature later in the fall this year than during a typical year. The wet spring and summer also made it difficult to harvest high-quality first-crop haylage. The potential combination of late-maturing corn and low forage inventories creates an opportunity to harvest additional corn silage MATT to ensure AKINS adequate forage going into the winter season. Late-maturing corn may also be the reality for grain producers, which could translate into a scenario for grain, dairy and beef producers to harvest corn silage instead of dry corn on those acres. In situations like those the buyer and seller of silage must agree on a price for the silage. A few methods are available to determine the value of standing corn silage. A simple calculation involves multiplying the corn price by a factor of eight to 10 to estimate value per wet ton of forage. That method doesn’t factor in multiple other inputs, however.
The cool wet weather of spring and summer have made it difficult to predict quality and yield in crops such as corn. estimated corn-grain yield per acre silage dry matter on a percentage basis estimated corn-silage yield local prices for corn and low-quality hay fertilizer values for phosphorus and potassium To aid in calculating fair prices for silage the University of Wisconsin-Madison Division of Extension’s Forage Team has made tools available online. Visit fyi.extension. wisc.edu/forage/econom-
ics/ to explore those tools. In addition, the UW-Extension Corn-Silage Pricing-Decision Aid – a spreadsheet developed by Ryan Sterry, Joe Lauer and Lee Milligan – uses inputs specific to many circumstances. It provides a minimum price for the seller and a maximum price the buyer should pay to give a starting point for negotiation. A mobile application called Corn Silage Pricing App, developed by Ryan Sterry and Greg Blonde, is also available for download at that site using the
same spreadsheet as the Corn-Silage Pricing-Decision Aid. The decision aid considers who will conduct specific harvesting tasks such as chopping and hauling, and who will pay for storage costs. The spreadsheet also considers costs of grain harvest – including combining, trucking and drying – that the seller would have incurred if the grain was harvested. In a sample scenario the estimated corn-grain yield was 150 bushels per acre,
estimated silage yield was 20 tons wet feed per acre, $4 per bushel of corn at the local cooperative, $100 per ton for low-quality hay, and $0.40 per pound of phosphorus and $0.30 per pound of potassium removed. In that example the buyer will do the harvesting, hauling and storing of silage in a bunker at their farm. For the seller the minimum price to recover nutrient-removal costs and the grain value was $491 Please see PRICE, Page E3
PEOPLE PERSPECTIVE
Take better care of yours in tough times M any of us in agriculture are experiencing the most challenging seasons of our careers. Every time we hear a favorable forecast of better weather, better prices or new trade opportunities, the good news seems to be crushed by something else out of our control. I believe it’s important to know what we can control and to regularly focus on those things. One thing we all probably can do is take better care of what we have. That advice is
great any time. But I believe it’s especially important during difficult or HANK challenging WAGNER times. There are five areas to consider – and choose – to improve in. Yourself. What one thing can you do to take better care of yourself? It may be taking some personal time to relax and
think – or intentionally not think – about anything. Spend time with someone who inspires and motivates you or just makes you laugh. Change something about your diet, exercise habits or even how often you brush your teeth. Investing in yourself will help you be happier, more productive and have more self-esteem regardless of current or future challenges. Other people. What one thing can you do to take better care of the
people you’re responsible for or connected with? Select one thing you can do to take better care of your spouse; you are the only spouse he or she has. If you don’t know what to choose just ask. What about the rest of your family? If you have children remember you are the only parents your children will ever have. They need you more than any generation before us. Think about your employees also; they are not merely humans who work for you,
they are people with families and personal lives. Taking better care of them creates the opportunity for them to be happier and more productive whether they are at work or away from work. Animals. We already take great care of our animals – but ask yourself if there is one more thing that can be done. It could be installing a cow brush, sprinkler system or some fans. Perhaps it’s Please see WAGNER, Page E3
“Udder Comfort is our staple.” — Mike Creek
PALMYRA FARM, HAGERSTOWN, MARYLAND, The Shank and Creek families 100 Ayrshires +20,000M 4.0F 3.5P, 100,000 SCC, 2019 Dairy Shrine Distinguished Breeder 11x WDE Premier Breeder, 9x Premier Exhibitor, 5x WDE Premier Sire Palmyra Tri-Star Burdette Pictured at 2018 World Dairy Expo with 2x Grand Champion Ruth (l-r): Mary, Mark, Samantha, Mike Jr., Elizabeth and Evan Creek. Not pictured: Mike Creek Sr. and Ralph and Terrie Shank. “Since 2004, Udder Comfort™ is our staple. We use it heavily on show cows and fresh cows,” says Mike Creek Jr., part of Palmyra Farm’s 5th generation. At the 2019 World Dairy Expo, National Dairy Shrine will honor 4th generation brother and sister Ralph Shank and Mary Creek as Distinguished Dairy Cattle Breeder. They have bred 49 All-Americans, 146 nominees, 77 Ayrshire bulls in A.I., including Burdette, Berkely and Reality. Twice Expo Grand Champion, Palmyra Berkely P Ruth-ET EX94 combines their lines. “Ruth is what we’ve been breeding for, for 30 years,” says Mike. He leads her, but she’s Evan’s cow. In 2009, Mike started Palmyra Farm Cheese. (https://wp.me/pb1wH7-1R) The herd’s milk quality is key, with high components and low SCC. “Starting lactations with Udder Comfort is an easy, non-invasive tool for quality milk, quality udders as well as quality of life for our fresh cows,” says Mike.
Quality Udders Make Quality Milk
Keep the milk in the system 1.888.773.7153 1.613.652.9086 uddercomfort.com Call to locate a distributor near you. For external application to the udder only, after milking, as an essential component of udder management. Always wash and dry teats thoroughly before milking.