Eternal Optimist or Pessimist

Every problem was at one point a wee disturbance. What a ride life is, the lowest price for cows since 1999 http://usda.mannlib.cornell.edu/usda/current/AgriPric/AgriPric-10-30-2009.pdf page 11. Did you notice I did not say the lowest milk price? While we all get the negative view from the media or from others talking, our best option I to accentuate the positive http://www.youtube.com/watch?v=Z45EB4TiYz4 . We are in a renewed era of people thinking before they pull out the credit card or checkbook. That is just for personal spending. Business still has to think (always should have) does this investment pencil. We at Springing Acres did not think $2000 cows penciled based on our experience of 30+ years in the dairy business. That is why almost all customers had to put money down during this last high cattle price period.
Enough looking back. Today the economics are in the dairyman’s favor. It is all in the presentation what happens from here on your farm. Below is the first year of a lease Plan 1 from Springing Acres for 40 cows. Look to the bottom for imputed milk price, cull rate feed expense ect. This example raises the heifers sells the bulls as calves and replaces the cows culled.

20.25 % gross to lease target <18%


41.97 % gross to feed Target <50%

39.45 % ROI Cows Target > 36%

	A	B
1	Income	Year 1
2	Milk	116853
3	Cull cow\ bull calves	5940
4	Springing Heifer Sales	0
5	Total Income	122793
6
7	Expenses
8	Feed	51539
9	Heifer raising costs	4738
10	Interest Bank	0
11	Lease payment	24869
12	Other variable expenses	11090
13	Total Exp	92236
14
15	Income-Expenses	30557
16	Fam Living	0
17	Cattle purchase	13200
18	Total Dispur	105436
19
20	Debt Financ
21	And Repaymt
22	Bank Pmt	0
23	Total Pmts	0
24
25	Net Cash Income	17357
26	Borrow Bank	44000
27	Bank Debt	0
28	Heifers owned yr 1	18.05
29	Heifers owned yr 2	36.10
30	Heifers owned yr 3	44.65
31
32	fill lines 26b-46b not red
33	# cows	40.00
34	#cows in milk	35.20
35	# cows dry	4.80
36	Milk price net	14.00
37	# milk/cow	65.00
38	$/cow purch	1100.00
39	cull rate%	30.00
40	cows culled/pur/mo	1.00
41	cull price/cow	400.00
42	heifer calves born /mo	1.58
43	bull calves sold/mo	1.58
44	$ bull calves sold	60.00
45	feed cost/cow milking	3.70
46	Feed cost/cow dry	2.30
47	lease rate/$1000	47.10
48	loan payment/$1000	0.00
49	loan %	9.00
50	other expenses/day/cow	0.76

This Worksheet has been a thorn in our side for the last 8 months or so. Not now when 2 of the 3 ratios are in line we are ready to go. Are your barns full? I will let you ruminate on this article for today. Feel free to comment.