Ten tips for tough times | Michigan Farm News

Ten tips for tough times

Category: People

by Phil Durst, MSU Extension

050918_farmnews_10tips
Even in the toughest times, investing in some things can be the best option. For example, liming a field to be planted to alfalfa, purchasing a pasteurizer for calf milk, or putting fans in the dry cow pen.

For many farms, returns are poor relative to the cost of production. The result is great stress among many farm families. During times like this, it is easy to lose perspective, have difficulty making decisions and to be discouraged.

Here are 10 things that may be of help to any family in that situation.

1. Take responsibility: It can be easy in times like this to blame big producers, the co-op or others for low prices. While that may make you feel better for the moment, it keeps you from doing what is more important—taking responsibility for your operation. So get over the fault of others, accept the pricing structure and focus on your operation.

2. Focus: Discipline yourself to examine specific areas of your business to determine how they can be made better.

3. Involve employees: Employees are often left in the dark about financial concerns and the need for economizing. Talk to them, invite their ideas, answer their questions, and enlist their help.

4. Communicate with venders and lenders: Don’t just run up unpaid balances and not talk with them about it. They may be able to help you, and you need to come up with a plan to pay what you owe. These may be difficult conversations, but don’t avoid them.

5. Pencil-out the consequences of changes: Consider what the consequences will be of cutting back on this or that and monitor the results. Run your ideas past someone you trust to give you honest feedback.

6. Invest where your returns will be highest: Even in the toughest times, investing in some things can be the best option. For example, liming a field to be planted to alfalfa, purchasing a pasteurizer for calf milk, or putting fans in the dry cow pen. These investments, and others, have a high likelihood of reducing problems or improving returns. That is where you need to invest.

7. Take a hard look at where you are losing money: Losing value is losing money. Does haylage harvest take two weeks? Is the average age of first calving more than 24 months? Is the death loss of calves more than 5 percent? In each of these cases, and many more, ask yourself how much money are you losing and look for alternatives.

8. Use your records: Start with financial records and calculate your cost of production, compare to benchmarks and look for where you can make changes.

9. Seek advice: Consider starting management team meetings. Invite in people who can apply their knowledge in looking at your operation with you: feed consultant, veterinarian, lender, key employees and your Extension educator. Open your records to them and have them help you identify opportunities and changes.

10. Keep things in perspective: Your business may lose money or you may even lose your business, but that is not your life or your identity. Be thankful for family and friends. Consider others who may have less, and do what you can to help them. Take your eyes off of yourself and your own problems and see what you can do to help others with needs around you.

For more resources, visit https://tinyurl.com/ybkwqhst.