The first half of 2009 is shaping up to be a period of serious losses and the second half could be more of the same, says J. W. Schroeder, Extension dairy specialist.
"Everyone in the dairy business will be forced to bear down, reduce expenses, put off unnecessary capital expenditures and be the best production manager possible,” Schroeder says. His suggestions:
Step up record keeping.
It's crucial to have a clear sense of how costs are changing relative to sales. Have your accountant run sensitivity analyses to predict how your dairy will fare in a variety of scenarios.
Communicate with creditors.
If you're having cash-flow problems, let lenders know before you start missing payments. "Most lenders are caring, decent people who want to help you succeed,” Schroeder says.
Keep your employees in the loop.
"Tell them the truth about how the business is doing and what your benchmarks are going to be for decision making,” Schroeder advises. "You don't want key employees to panic and start looking for new positions just when you need their creativity and skills most.”
Take care of yourself.
"Force yourself to stick to normal routines: Eat properly, get plenty of rest, exercise regularly and spend time with family and friends. All of these activities will help you keep business problems in perspective and keep you from obsessing over things you can't control,” Schroeder says.
Reach out to others.
Look for opportunities to share tips and strategies with other business owners on what is working for you and where you need help.