Department of Agriculture, Trade and Consumer Protection: Farm Center encourages dairy producers to scrutinize expenses to survive challenging economy

Contact: Paul Dietmann, 608-224-5038

Donna Gilson, 608-224-5130

MADISON – Wisconsin dairy producers caught in the current dairy price downturn can take a number of steps to ensure their operations remain viable in the long term, including knowing their farm’s cost of production and scrutinizing all operating expenses.

The Wisconsin Farm Center at the Department of Agriculture, Trade and Consumer Protection has issued a list of strategies it recommends dairy producers consider to survive the bleak economy.

“The coming year is shaping up to be a difficult economic time for the state’s dairy farmers. We want to ensure we’re providing as much information as we can to help producers stay in business,” said Paul Dietmann, director of the Wisconsin Farm Center.

The Wisconsin Farm Center recommends the following strategies for dairy farmers to survive price downturns:

* Know your cost of production, including the cost of producing a hundredweight of milk. Cull any dairy cow who isn’t earning her keep.

* Scrutinize all operating expenses, especially purchased feed cost, and make cuts where you can without sacrificing production or risking animal health. Even shaving 5 to 10 percent off each expense category can result in a significant impact on your bottom line.

* Ensure all capital assets are used efficiently. Sell machinery that is underused. Compare the cost of owning versus renting machinery and consider custom hire. Or, if it makes sense for your operation to own machinery, consider performing custom work for hire.

* Consider increasing on-farm fuel storage capacity to take advantage of current prices.

* Improve labor efficiency: review employee workload and reassign as necessary. Does it make sense for family members to obtain part-time off-farm work?

* Consider adding feed storage, so that if prices drop, you can stock up on supplies. The Farm Service Agency offers a low-interest loan program for crop storage facilities, including hay storage, that it not based on a farmer’s financial condition.

* With asset values declining, now is the time to transfer farm assets to the next generation. For example, a producer could likely transfer twice as many cows under the annual exclusion this year as in 2008.

* Examine all farm insurance costs. Consider higher deductibles if the operation can handle the owner’s portion of the cost in event of a loss. Also consider crop revenue coverage.

* Review energy usage and reduce waste to save on utility costs.

The Center provides farmers with a wide range of information and serves as a resource to connect farmers with state and federal programs. Staff is also available to provide guidance and information assistance to farmers in this time of need. For more information, or to talk to a professional at the Wisconsin Farm Center, call 1-800-942-2474 or visit, keyword farm center.