Is it Time to Quit Dairy Farming?

You make entirely different decisions, once you have answered the question posed in the title of this article. Have you failed or are you simply frozen in indecision? Are you facing bankruptcy, or is there a chance for recovery? Have you nowhere to turn and nothing you can do? Are you in the race? Or have you been eliminated?

“It’s only a matter of time before there’s nothing left.”

With heart pounding certainty never before have dairy owners faced so many years of devastating downturns. Caught in the crosshairs of an economic and political climate that could continue indefinitely, even the most persistent are finding it difficult to find ways to keep their farm solvent. There are major debt loads. Personal guarantees are due. Family members and even young children are being negatively affected as they see that their family’s hopes and dreams disappearing. There are many who, finding themselves in this situation, would throw their hands up in despair.

“Postpone The Pity Party”

I say this with no intention of minimizing the seriousness of the situation your farm is in. -I am not mocking it either. It is almost a given that rejection, failure and unfairness are a part of today’s dairy business life. For years, one crisis after another has not only chipped away at producer income it has chipped away at producer confidence. We can’t change what we have no control over, but we can control how we react to it. No matter how tough or unjust the circumstances, there is always some positive forward action to be taken.

“Who Are You Going to Call?”

When self-esteem is at an all-time low, no one feels like making any call and talking about it their troubles. So do it anyway. You have nothing left to lose. Make those hard calls. Talk to creditors, bankers, family and counsellors. When you are down and feeling desperate, you need to look for that needle in a haystack piece of information that could make a difference. Suffering in silence is just as demeaning as blaming everyone and everything else. There is absolutely no room to continue with the romantic notion that dairy farming is going to magically right itself in time to save you, small dairies, your county or, depending on where you live, your country. The dairy industry is big business. If that is something you can accept as part of your dairy reality, then there are a few more things you can consider, when attempting to change the downward slide.

“Talk to the Leading Edge Not the Bleeding Edge”

Fifty years before you started farming, what did dairy farming look like? How has your dairy changed during your tenure? Are you expecting or hoping that change will stop now?

For a moment, ask yourself where the industry is currently succeeding. What size is the most successful? What size is unsuccessful? What business decisions are producing profits? What three things distinguish leading edge dairies from those who are bleeding money? Seek out ways to meet with, connect with or, at the very least, read about those who are rising to the top. Get the details on cash flow, mechanization, using new technology, nutrition and genetics and robotics. Are any of these relevant to your family dairy situation?

“Talk to the Family On the Front Line”

Having an open discussion with family members about the severity of the situation is probably the hardest conversation you will ever initiate. As much as we would like to spare loved ones or protect them from stress and worry, this isn’t a decision from which they can be excluded. You may even be surprised at how aware everyone is. Do your best to provide a clear explanation, providing numbers and dates and other relevant information that is true right now. Don’t cite the past. Don’t fear the future. By stepping outside your comfort zone, show those you love that the best way to conquer fear is to face it head-on. Allow them the time to ask questions, show fear and lay blame. When everyone is on the same page, you will have an idea of what the next priorities should be.

Keep running the business. If you do decide to sell, don’t showcase that you have quit.
Get your paperwork in order. In one place. Do it now!
Get rid of everything that isn’t working. These things not only slow you down, but they also bring you to a complete stop. Think broken equipment. Or it could be cows with more sentimental value than production value. Sick animals that are taking your time away from your priority producers.
Don’t spend money on new field equipment or on maintaining and repairing your own. Work with a custom operator to evaluate what can be sold and how your land and crops can be part of a business arrangement. Focus on efficiency. Crops or milk? What are you better at? Producing crops or managing cows?
If you decide to focus on your milk-producing cows, get the most from the best and sell the rest.

Once you give this area your focus, you will find more ways to put your money where the money is!

“Money Talks!”

Money is the beginning of your recovery. Talk to everyone who is on your money list

Those who want your money.
Those who have money.
Those who owe you money.

If possible, call together your lenders. Have the same honesty and transparency with them that you and your family have gone through. Don’t stop at the status quo. Come up with at least one alternative. Every person or business with a hand reaching into your pockets would also have the willingness to provide advice, information or even capital based on what they have learned from their connections to dairy businesses today. The goal is to seek a win-win for all parties. Of course, in any new restructuring of the business relationship, there are risks. The reward is to come up with strategic decisions that make the future viable.

“But Can You Bank on It?”

Many dairies are well beyond a simple cash crunch. Realistically more credit is not the answer for either side. Have discussions about what options there are before foreclosure.

Financial businesses have issues with profitability too. They can’t simply cut off clients. Work with them from the idea that nobody wins when a dairy must close. Be open and honest. Don’t simply fold. Discuss which is worse — write off or write down or is there a workable plan that can be put in place. It goes without saying that those who owe you money must pay up. Now.

“Givers. Takers. What Do Your Suppliers Do Best?”

Take a hard look at those people, companies and teams that you do business with. If they submit invoices to your dairy, can you equate that expense with the value added that they provide? Suppliers are part of your team, and this is a time to expect more from everyone on that team. Once again, off-farm businesses like these suppliers could offer a different perspective on your situation that might be helpful. You recognize that you can’t stand still. It is time for all your health, nutritionists, equipment and feed suppliers to step up too! Expand your discussions. Nutritionists may have a business idea. Veterinarians may suggest different animal housing management. Expect more or part ways. Ending one of these relationships may seem har, but how committed are they to your success? What role do they play, or want to play, or should they play in your future?

“All I Ever Wanted….”

Facing your dairy crisis will make you repeat this mantra often, “All ever wanted to do was to milk cows!” Today you are milking all right, but you are about to lose it all if you don’t change something? Are you frozen and unable to do anything because of things you will not do?

In other businesses who (like small agriculture) have been squeezed out by economies of scale, it is common for the management and staff to be hired by the new ownership team. However, in dairy, this type of takeover has been deemed distasteful and gets rejected for not being a viable solution. Before walking away, ask yourself where you will find the best place to use the skills you have spent your working life developing. Can you afford to be unemployed? Where can you cash in on the abilities you already have? You are your own best asset.

“Seller Beware! Buyer Be Informed”

If you come to the decision to sell, don’t let the decision break the spirit that has brought you this far. Your mental and physical well-being stands well above everything else you face.

You have come to where you are by doing your best. The optimism of dairy farmers is part of your character, but there comes a time when enough is enough. In facing accountability, there is much that has been beyond your control.

Dairy market turmoil
Natural disasters
Sustained low commodity prices
Droughts.
Seasons (such as the current one0 where the planting window may close entirely
Unrelenting mental stresses leading to depression and health issues
Political talk is cheap. Political help isn’t enough.
The Opioid crisis.

You alone cannot turn any one of these around. Nor should you try.

At this point, your best step forward may be to take a step back and decide to take care of yourself. You are worth it. You are needed for who you are as a person, not only as a dairy farmer. Seek advice. Get spiritual support. Do what is best for your good health.

THE BULLVINE BOTTOM LINE

Regardless of where you are, focus on today. Focus on what you can START. Start something new. Start a new change. START OVER. Remember how many times you have heard, “Life isn’t a sprint. It is a marathon.” We can look at dairy and say, “Dairy isn’t a mad dash. It is a long distance relay.” Love your team. Love yourself!