Dairy's Bottom Line - Professional Dairy Producers of Wisconsin

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Dairy's Bottom Line - Professional Dairy Producers of Wisconsin

STJanuary 2007 • PDPW - Dairy’s Bottom Line 3‘Above & Beyond’Dolph’s Educational Efforts Extend Beyond Ag ClassroomGwen Dolph believes inWisconsin agriculture and isgoing “above and beyond” toshape its future by educatingboth the non-farm public andtomorrow’s leaders in theindustry.Dolph, a second-year aginstructor at DeForest HighSchool, says she wouldn’t bethe person she is if it weren’tfor a strong work ethic instilledon her home farm near LakeMills. Today, she’s driven bythat on-farm work ethic coupledwith an excitement “aboutthe food industry in general” tocontribute in multiple ways tothe well-being of her belovedindustry.For instance, she steppedforward to host theProfessional Dairy Producersof Wisconsin Youth LeadershipDerby in November atDeForest High School. At theweekend lock-in, students fromall over the state, as well asother states, gained self-confidence,honed leadership skillsand explored careers within thedairy industry. There werehands-on labs, workshops byindustry personnel and a motivationalspeaker.Equally important, this highschool teacher says they got achance to meet other studentsalso looking forward to careersin production agriculture.Friendships forged during thePDPW Youth Derby are apt toresult in what will possiblybecome key career-long contactswithin the industry. Shewas impressed how some studentswho find it difficult to“step out of the box” not onlymet new people but were “discussingand brainstormingideas” for their futures in farming.Dolph willingly went theextra mile to secure a site forSee Dolph, on Page 14Opportunities AboundDeForest Ag Instructor Gwen Dolph incorporates the educationshe receives from PDPW into the classroom. Shealso volunteered to host PDPW’s Youth Derby this fall tobetter acquaint youth with opportunities available in theindustry. Here, Dolph (right) discusses some of those possibilitieswith DeForest FFA President Wade Kessenich.Step Aside Iodine…Sometimes getting ahead means leaving tradition behindChlorine dioxide uddercare products fromABS are proven to be more effective thaniodine in killing mastitis causing organisms.To enhance your milk quality program with superiorprotection, call your ABS Representative or1-800-ABS-STUD today.Because Quality Counts©2006 ABS Global, Inc., 1525 River Road, DeForest, WI 53532 • Phone: 800-227-7883 • Fax: 608-846-6392 • www.absglobal.com


4 PDPW - Dairy’s Bottom Line • January 2007STProducer ProfileIf you’re like most farmers, the last thing on your mind is electricalwires. But just because your electrical system works doesn’t meanit’s working as it should. If your wiring hasn’t been professionallyupdated in the last 20 years, you are at serious risk for electrical fires,stray voltage and surgedamage.Update your farm wiring forAffordably upgradelittle-to-no upfront cost with Alliantyour wiring today withAlliant Energy-WP&L’s Energy’s Farm Wiring program.Farm Wiring program.It pays the first $1,000 of your farm wiring project plus50 percent of the remaining cost, up to $10,000. That means for$10,000 in upgrades, you’d pay $4,500 (which could qualify for AlliantEnergy-WP&L’s three percent financing). For bigger projects, youcan finance up to $20,000*.Safe, efficient farm wiring at little-to-no upfront cost — now that’sa smart investment. To learn more, call 1-800-ALLIANT or visitwww.alliantenergy.com/farmwiring.*Farms or ag-related businesses are eligible if AlliantEnergy-WP&L provides the electricity or natural gas on aretail rate basis for the applicable technology.www.alliantenergy.com/farmwiring© 2006 Alliant Energy 112831 12/6 JSDraxler Enjoys ConferenceOne of the six founding members of PDPW, Joe Draxler,53, Glenwood City, has seen the organization grow togreat strengths. Although Draxler, a fourth generationfarmer, recently sold the 600 cow farm he bought from hisdad in 1982 to two of his sons, he plans to stay an activepart of the dairy farm. Draxler is employed by IndianheadInsurance Agency, Inc. in Menomonie as a crop and farminsurance agent. The Annual Business Conference isDraxler’s favorite PDPW event. “There are good speakers,lots of displays,” he says. “PDPW is deep rooted, with a lotof resources. I think we’ve really just touched the tip of theiceberg.”Dairy’s Bottom Line photo by Sarah WatsonMPB Builders Inc.are your total dairysystem contractors,We will assist withyour design andbuilding needs.GIVE US A CALL TODAY!MPB BUILDERS INC.Contact:Visit our Website @http://www.mpbbuilders.com654 E. Oshkosh St.Ripon, WI 549711-800-782-9632


Whether your dairy farm operation is large or small, you need plenty of hot water for equipment cleanup, cowprepping, and feeding calves. What better way is there to meet your everyday needs than free hot water? The Mueller®Fre-Heater® recovers wasted heat from your milk cooler’s condensing unit and uses it to heat water you can use forfeeding calves and cleaning. Adding a Fre-Heater to your milk cooling system will drastically reduce the cost of hotwater in your operation, thereby lowering your cost of production and enhancing your profitability.Contact your local Mueller dealer listed below for more details.DORCHESTERBob’s DairySupply715-654-5252JUNEAUCentral Ag.Supply, Inc.920-386-2611LUXEMBURGKudick’sKooling920-845-5725PLAINEderer DairyEquipment608-546-3713STEVENS POINTBrilowski’sDairy Supply Co.715-342-0205FRIESLANDCliff’s Incorporated920-348-5153LANCASTERFuller’s Milker Center800-887-4634MARATHON / LOYALDairy Services, Inc.715-443-3132 or 800-221-3947SPARTAPreston Dairy Equip608-269-3830UNION CENTERPreston Sales & Service608-462-8279®THE MILK COOLING SYSTEMS SPECIALISTS ©2006 Paul Mueller Company 392


6 PDPW - Dairy’s Bottom Line • January 2007STProfessional Dairy Producers of WisconsinCalendar of EventsHuman Resource Seminar Madison Jan. 23A one-day interactive seminar focusing on attracting, hiring, growing and motivating employees for increased productivity andretention.Financial & Transition Mngt. Symposium Madison Feb. 13 & 14A two-day interactive conference that focuses on financial and transition management and how they add up to helping yourbusiness achieve superior performance.Annual Business Conference Alliant Center, Madison March 13 & 14PDPW’s hallmark, business-management conference aligning high-reaching dairy producers and industry representatives toshare ideas, solutions, resources and experiences.Foot Health Seminar TBD April 10 & 11A one-day seminar showcasing new strategies in foot health that will help producers improve on-farm profitability throughincreased mobility, production, and longevity.


8 PDPW - Dairy’s Bottom Line • January 2007STInterviewContinued from Page 1first on how comfortable theinterviewer is with that person,Hunter says. However,be careful what kinds ofquestions are casuallybrought up as certain questionsthat you may not thinkare offensive can potentiallyoffend the applicant and leadto discriminatory problems.A very popular type ofquestion in interviews todayis a situational question,Hunter explains. This type ofquestion poses a certain circumstanceto the applicant,like “You noticed a cow havingdifficulty calving,” andthen asks the applicant,“What would you do?” Theinterviewer can also ask theapplicant to give an exampleof a job related situation theywere in and how they handledit. When asking this typeof question, Hunter recommendsthat the interviewerscale the answers from oneto five, with some notesabout what kind of answerrepresents each score, socomparing all of the candidatesis simple.Hunter recommends thatthe interviewer doesn’t askanything that is not job related.It is a waste of time andcan brush with the equalemployment laws. He says tobe especially careful of questionsthat are related to protectedgroups, such as race,religion, sex, sexual orientationand age.Oftentimes dairy producershave immigrants applyingfor jobs on their dairy farms.Hunter explains that theemployer is responsible fornot discriminating, but needsto have people eligible foremployment in the UnitedStates. Some smaller businessesmay be exempt fromthese kinds of laws, butHunter recommends beingsafe and following them anyway.He adds that it is perfectlylegal and wise to ask,“Are you legally able to workin this country and are theirany restrictions I shouldknow about?”It is illegal to directly askjob candidates about disabilities.However, it is wise toinquire about the candidate’sability to perform key jobtasks. It is also okay foremployers to say somethinggeneral like “any individualwith a disability may requestan accommodation inadvance of any interviews ortests,” but this is not legallyrequired. Generally, the disabledperson is responsiblefor informing the employerthat accommodations areneeded. Hunter also notesthat while this question isallowed, it’s not necessarilygoing to be all that effective.If the interviewer is concernedabout an applicantthat may have an alcohol ordrug problem, he/she can askevery candidate a questionlike “Do you think it is okayto drink alcohol at work?” Ifasked to every candidate, thisavoids accusation, but givesthe interviewer an opportunityto evaluate the applicant’svalues of the job. This type ofquestion is especially valuablefor a job that requiresoperating heavy equipment.Hunter also says that a drugscreening of applicants ismuch easier to do than testingthose already employed.The applicant will likelyask questions of the interviewerduring the interviewingprocess. Hunter says thatthe interviewer shouldanswer questions like thoseregarding the success of thecompany and potential tomove up, as honestly as possibleand don’t make anypromises. However, questionsregarding the number ofpeople that applied for theopen position and theirchances at gaining the positionshould be left answeredonly in very general terms,Hunter adds.Salary can be a challengingissue when hiring a newemployee. Hunter says thatthe employer should have agood idea of what the jobshould pay going into theinterview. Typically whenasked the interviewer shouldthrow out the lowest amountthey are willing to pay for thejob, but also add that they arewilling to pay a higher rangebased on ability and experience.Hunter recommends thatthe process of hiring a newemployee, from posting thejob to hiring, should be ascompressed as possible. Themore the situation drags out,the more chance the applicantshave to find anotherjob somewhere else.However, the employershould be courteous andexpect about two weeks forthe new hire to wrap upthings with their currentemployer.Hire Right, Get ResultsOverall, Hunter recommendsmaintaining consistencythroughout the interviewingprocess. Also, don’t usethe interview to do too much;use it to chose who is bestfor the job.The Professional DairyProducers of Wisconsin arehosting a human resourcestraining seminar with Hunteron Jan. 23. This daylong seminarwill provide advice notonly for establishing jobrequirements and interviewingeffectively, but also fortraining employees correctlyand giving productive feedback.By Crystal McNett


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14 PDPW - Dairy’s Bottom Line • January 2007STDolphContinued from Page 3the recent Derby because shealso “strongly believes inPDPW,” its “goals and programming.”“PDPW does an excellentjob of dairy education,” sheremarks. Dolph herself hasgone through PDPW communicationstraining and attendedits annual conference, whereshe sources some of the samespeakers to address her agclasses. She’s also used PDPWgeneratedmaterial on risk managementin those classes.Her home farm is an activePDPW member, with familymembers serving on producerpanels. Dolph Dairy LLC isoperated by her folks, Donaldand Patricia Dolph, and herbrother and sister-in-law, Chetand Patty Dolph. They’re milking350 Holsteins (registeredand grade cattle) following arecent expansion from 250 lastyear. The goal is to go to 450milking. The farm has five fulltimeand six part-time employeesand operates 800 acresTwohig, Rietbrock&SchneiderAttorneysforAgricultureProud to be a part of PDPW andWisconsin’s agricultural community.(920) 849-4999102N.MadisonStreet,Chilton,WI53014TM(owned and rented). Dolph fillsin for milking and does communicationswork and neighborrelations for the farm.She graduated from LakeMills High School and wasactive in FFA. She was profoundlyinfluenced by the lateLyle Wallace, who was her agteacher her first year in highschool. Wallace was killed in acar accident. He opened hereyes to “what I could do” and“inspired” her to teach agriculture.In 2005, Dolph graduatedfrom UW-Madison with degreesin ag education and life sciencescommunication (alsoknown as ag journalism). Whilein college, she was active withthe Association for Women inAgriculture (AWA), BadgerDairy Club, NAMA (NationalAgri-Marketing Association),and Collegiate FFA. She wasalso on the Wisconsin AlumniStudent Board, linking past,present and future students,planning university-wide nonalcoholevents, recruiting perspectivestudents and the like.She’s still recruiting for agriculture.“I want students toknow the opportunities theyhave” in the industry, saysDolph, and “be proud” if farmingis their chosen path. She’sdoing her part to close therural/urban knowledge-of-farminggap by attracting studentswho typically wouldn’t take anag course. For instance, sheprovides a course focused onequine science and companionanimals. She emphasizes veterinaryscience, as well as naturalresources, conservation andforestry.Dolph is working on securingan advanced placementcourse in environmental sciencesfor students at DeForest,so they might earn college creditswhile still in high school.Already, students can earn electivesat Madison Area TechnicalCollege’s vet tech programwhile learning about veterinaryscience in DeForest’s ag program.Outside the classroom,Dolph does her part to educatethe public about agricultureand “bridge the gap we havebetween the general public andthe dairy industry” by servingon the “Cows on theConcourse” committee overseeingvendors and event sponsorexhibits. This is the thirdyear she’s been working on thatJune Dairy Month-related eventon Madison’s Capitol Square.She gets her high school studentsinvolved, too, both volunteeringat the event and stuffing7,000 some bags of dairy promotionalliterature handed outto people who attend.Dolph also continues towork with the Dairy BusinessInnovation Center (DBIC),housed within the WisconsinDepartment of Agriculture,Trade and ConsumerProtection in Madison. Sheinterned there in college, andnow does consultant-type workfor the center, which concentrateson helping the cheeseand processing side of theindustry grow and modernize.Start-up ventures are also fostered.As part of her work withDBIC, Dolph is writing a cheeseprocessing curriculum in conjunctionwith a movie titled,“Living On the Wedge.” Thathour-long documentary featuresWisconsin cheesemakersand on-farm processors. (Seewww.livingonthewedge. comfor more information). Early in2007, all high school ag programsin the state will receive afree DVD and curriculum for atwo-week unit on Wisconsin’sdairy processing industry.She says that facet of thedairy industry is “not wellunderstood” by students. Thiseffort shows the “care and science”that goes into makingcheese, and how there’s a growingmarket for locally grownfoods, including niche cheeseand other dairy products.At her own high school,Dolph is one of two ag instructors.There are 120 high schoolFFA members and nearly 210students taking ag classes.She’s working on establishingan advisory council of industryprofessionals, including producers,which will analyze andevaluate ag programming at thehigh school to make sure studentsare receiving what theyneed to go onto further educationor directly into the workplace.She wants to better meettheir educational needs asfuture university or vocationalstudents or employees.Dolph worries that “somany people are loosing touchwith this industry” and thatthere’s misunderstandingregarding farming today, evidencedin part by non-farmneighbor complaints aboutsound farming practices.“So many people don’tunderstand agriculture – thathow we treat our animals andsoil is directly correlated to ourprofits,” she remarks. Restassured, Dolph is diligentlyworking to increase theirunderstanding and narrow theeducational chasm. While educatingagriculture’s own youth,this young woman is goingabove and beyond to informnon-farmers about the industryshe loves.By Jane Fyksen


16 PDPW - Dairy’s Bottom Line • January 2007ST


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18 PDPW - Dairy’s Bottom Line • January 2007ST‘Discovery Farms’Creating Qualified Nutrient Management PlansWhen I talk about nutrientmanagement planning a fewquestions usually come up.These questions include: whendo I need a plan; what happensif I don’t have one; and who isqualified to write a plan? Wejust finished a set of classeswith county staff who workwith producers and consultantson writing and implementingnutrient management plans. Iwould like to try and providean answer to at least some ofthese questions.I can’t think of a singleoperation that doesn’t havesome type of fertilizer programalready in place. Okay, it’s notdocumented in a three ringbinder or on a computer somewhere,but there is a system inplace that outlines how manypounds of fertilizer or manureare applied to fields going intovarious cropping systems. Asound nutrient managementplan simply accounts for thenutrient needs of a crop andcredits the various sources(soil, manure, legumes, etc.).Just like balancing your checkbook,this accounting insuresthat you don’t over apply nutrients;it saves you money andreduces the risk of nutrientsnegatively impacting the environment.The fact is that noteveryone balances their checkbook,but I think we can agreethat it’s a good idea.So, everyone probably hasa nutrient management plan ofsome sort, but it might notcomply with state requirementsor be the most organized planin the world. As you’re implementingyour New Year’s resolutions,maybe one of yourgoals should be to evaluate theuse of nutrients on your farm todetermine if your applicationrates, methods and timing areappropriate based on cropneeds. You should also checkto insure that you have identifiedcritical sites and locationson your operation where thepotential for loss is high (sinkholes, shallow soils, nearstreams, lakes etc.).Will someone come to yourdoor demanding to see yourplan? That depends on howyou apply manure and othernutrients to your fields andwhether there is a significantrunoff event. If you applymanure that runs off a field andimpacts a stream or lake, then Iwouldn’t be surprised if someoneasks for your plan. If youhave one and can documentthat you are following it youwill be able to determinewhether or not your managementpractices were appropriate.Some runoff events arecaused by producer error andothers by unforeseen weatherevents. Without documentationyou have nothing to justify yourmanagement decisions.That leaves the question ofwhat is a qualified NutrientManagement Plan and who isqualified to write one? A qualifiedplan is one that meets therequirements outlined in theNutrient Management PlanChecklist in ATCP 50. You canget copies of this checklistfrom your local conservationoffice or online at the DATCPwebsite under nutrient managementplanning. Here is the website:www.datcp.state.wi.us/arm/agriculture/land-water/conservation/nutrient-mngmt/planning.jsp.The key is that a planis qualified if it meets therequirement on this checklist. Aplan developed by a professionalthat has training or certificationmay not be qualified if therecommendations are outsideof requirements on the checklist.What about producer writtenplans? Producers can devel-See Plans, on Page 24


STJanuary 2007 • PDPW - Dairy’s Bottom Line 19Let the Numbers Do the TalkingThe following is a quickprimer discussing the dollarsand sense of the business bythe numbers. Financial ratioscan be useful tools for managementin decision-making,goal setting and benchmarking.Lenders and other creditorscan use the same informationto evaluate credit risk.The Farm FinancialStandards Council identifiedthe following five criticalareas for analyzing financialperformance:• Repayment ability orcapacity• Liquidity• Solvency and collateral• Profitability• Financial efficiencyFive common ratios willbe detailed and the correlatingbenchmarks presented interms of green, yellow andred lights. A green light representslow risk, a yellow lightcorresponds to moderaterisk, and a red light meanshigh risk. A green light doesn’tguarantee success, nordoes a red light imply failure.A weakness in one area maybe overcome by strengths inother areas.Repayment analysisThe essence of repaymentanalysis is comparing theearnings available to meetdebt obligations to the totalof annual debt payments andcapital investments. A commonbenchmark used toexamine repayment ability isthe term debt and lease coverageratio. Exhibit 1 showsthe data needed and procedureused to calculate theratio. Experience indicatesthe greater the net earnings tocover debt payments, the easieran operation can handleunforeseen expenses, whichlowers the risk. Thus, a ratiogreater than 150 percent is alow risk, or green light. Aratio between 110 percent1. Net Farm Income From Operations $ 43,7502. Plus: Non-Farm Earnings + 36,5003. Subtotal = 80,2504. Plus: Depreciation Expense & InterestPaid on Term Debt and Capital Leases + 59,0005. Earnings Available for Family Living,Income Taxes, Interest & PrincipalPayments and New Investments = 139,2506. Minus: Family Living Withdrawals andIncome Taxes - 58,0007. Capacity Available for Interest,Principal Payments and New Investments = 81,2508. Scheduled Interest and PrincipalPayments on Term Debt and Capital Leases $ 60,7009. Term Debt and Lease Coverage Ratio(Line 7/Line 8) 134%Exhibit 1. Repayment Analysisand 150 percent is acceptable,but riskier, and is a yellowlight. A ratio less than 110percent is a high risk and ared light. The lower the coverageratio, the more importantrisk management toolsbecome, such as crop insurances,hedging, options, orcontracted production.See Numbers, on Page 23MOST INSURANCE AGENTSSEE A NEW TRACTOR.WE SEE YOUR LIFELINECOME HARVEST TIME.At Rural Mutual Insurance, you’re not just a customer,you’re a friend and neighbor. Because we know youas more than just a policy number, we can provide thebest business insurance to fit your needs. To learnmore, give us a call.Your local agent is listedin the Yellow Pages.www.ruralins.comthegoldstandardagain.comSoyPlus|SoyChlor, dairy nutrition products of West Central.


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STJanuary 2007 • PDPW - Dairy’s Bottom Line 21ALTON D. BLOCK, CACPresident3215 Harbor Village Rd,Suite 2Middleton, WI 53562-1914AGRI-MANAGEMENT GROUP, Ltd.Consultants to AgricultureNEW SERVICES:• Help in Reducing Turnovers • Personality Profiling• Starting a New Employee • Exit InterviewsPh: 608-221-3213e-mail: agriman@charter.net 800-551-9230http://www.agri-man.com Fax: 608-221-3263LOWER YOUR SCC NATURALLY• Lower your SCC 40-80% or more in 2-6 weeks.• No withholding & safe for pregnant cows &organic applications.• Increases milk production 8%, improves conception.• Also treats & prevents mastitis, calf & hoof problems.• Easy to use in TMR or top dress - 8#/cow.• Low SCC semen also. • Used all across USA & Canada.“32 Years Of Serving the USA & Canada. We Care!”ALPHAGENETICS, INC.Call Today! 1-800-876-2500920-650-1631 (mobile)Rental &Sales - KellyRyan & VersaMachinesScheunemann BaggingEquipment & Supply LLC262-689-3695 or eve. 262-675-2276E-mail: uddersrus@nconnect.net❋ Kelly Ryan Equipment❋ Versa Intertnal Density System❋ Baleage Storage Equipment❋ Silage Bags, Bunker Sheeting, Baleage Tubes❋ Dura Guard Bale WrapAuthorized, Experienced, SpecializedLET US TAKE CARE OF...all of your liquid waste dispersal needs!CUSTOM LIQUID WASTE DISPERSAL - CALL US TODAY!Hose Injection • Manure Tanker w/Injectors • Long Distance Semi TrucksRUSSELL ROBAIDEK • (715) 758-8505 • Pulaski, WILow Profile w/flotation tiresAll stainless steel conveyorsTight turning walking tandemsPenta TMRMixersCall for Demo’s!240 cu. ft. to 1300 cu. ft.single screw & twin screwtrailer & stationary820 West Main P.O. Box 31 Chilton, WI 53014920-849-9304 • FAX 920-849-9160 • E-mail ddequip2@tds.net920-849-9304www.ddequipment.com


22 PDPW - Dairy’s Bottom Line • January 2007STProducer ProfileWoolover Calf CoversProtect Your InvestmentProtect the future of your dairy by keeping yournewborn calves warm and dry even when it’s cold,wet and windy outside. Woolover calf covers helpget calves off to a warm, dry, healthy start duringwinter weather.PDPW Energizes BinversieJay Binversie milks 580 cows and farms 1,350 acres of landnear Kiel. He also raises all of their wet calves, includingbulls; and 500 steers. Binversie is one of six partners inHeifer Authority. His heifers, ages 5 to 18 months, areraised by this group in Colorado. He enjoys meeting otherproducers in similar situations through PDPW. He likessharing ideas at the Annual Business Conference and feedingoff of the high energy that sends him back to the farmmotivated. Binversie says the optimism and positive attitudeeven shine in a year of bad milk prices.Dairy’s Bottom Line photo by Karen TopelCalves wearing Woolover calf covers during thefirst three weeks after birth are better able to: Use nutrients for improved growth rates Fight illness and prevent scours Recover from sickness more quickly Retain natural body heatContact your Select Sires representative formore information today!Serving northern WI: Northstar Cooperative800.631.3510Serving southern WI: EastCentral/Select Sires800.288.7473She depends on you fora balanced feedingprogram.Make sure yours isSupervised.(888) 259-8949www.feedsupervisor.comsupport@feedsupervisor.comManageYourFeedingProgram• Easily changedry matter %• Fine tune feedcosts• Reduce shrink• Regulaterations• Manageemployees• Track DMI• Transfer dataeffortlessly withwirelesstransfer option


STJanuary 2007 • PDPW - Dairy’s Bottom Line 23NumbersContinued from Page 19Liquidity analysisLiquidity is defined as theavailability of cash and nearcashassets to cover short-termobligations without disruptingnormal business operations.This measure is particularlyimportant in the volatile dairyindustry.The Working Capital Ruleexpresses working capital as apercent of business expenses(Exhibit 2). This ratio allows anoperation to assess the adequacyof its working capital thatcan be generated internally. Abenchmark to strive for is tohave working capital equivalentto at least 20 percent of totalannual operating expenses.Less than 10 percent is a signthat any business adversityneeds to be offset by risk managementtools such as insurancesand marketing practices.Solvency analysisThe equity-to-asset ratio,You DontHave ToChoose!!!!E1


24 PDPW - Dairy’s Bottom Line • January 2007STAnalysisContinued from Page 23should be higher than theinterest rate on debt.Financial efficiency analysisThe key ratio used tomeasure financial efficiencyis the operating expense/revenueratio. This ratio answersthe question, “How muchdoes it cost this operation togenerate $1.00 of revenue?”The ratio is calculated bydividing total operatingexpenses (excluding totalinterest costs and depreciation)by gross revenue (seeExhibit 5). A very efficientoperation would have a ratioof less than 65 percent for agreen light. An average operationwould have a ratio of 65percent to 80 percent for ayellow light and less efficientoperations would have a ratioabove 80 percent for a redlight. A higher ratio is acceptableif a large portion of theoperation is rented or leased,as lease payments are a tradeofffor principal and interestpayments.In summary, financialratios and benchmarks aretools that management andothers can use to analyze abusiness’ financial conditionand past financial performance.By using multiple yearsof consistent balance sheetand earnings figures, trendsin key ratios can be observed,and management strategiescan be developed forimprovement.By Dr. David KohlOperating Expense / Revenue Ratio 177,250(Total Operating Expense Excluding 280,000Interest and Depreciation / Gross Revenues) 63%Exhibit 5. Financial Efficiency1. Net Farm Income From Operations $ 43,7502. Plus: Farm Interest + 31,0003. Subtotal = 74,7504. Minus: Operator Management Fee orLiving Expense - 26,5005. Subtotal = 48,2506. Total Farm Assets $965,1007. Rate of Return on Assets (Line 5/Line 6) 5.00%PlansContinued from Page 18op their own nutrient managementplans if they have beenthrough a training program andthe plans they developed meetthe checklist. This doesn’tmean that you need a license tospread manure or nutrients onyour farm, it means that if youattend a training programoffered you can become qualifiedto write your own nutrientmanagement plan.Which is better, writingyour own plans or workingwith a consultant to develop aplan for your operation? That’sExhibit 4. Profitability Analysisup to you, but the best plan isone that you understand andcan implement on your farmwithout having to call someoneevery time something changeson your operation. Whetheryou go to the training programto become qualified to write aplan or attend so that youunderstand the importance ofimplementing a nutrient managementplan that someoneelse develops for you, it’s agreat idea to participate in thetraining program.By Dennis FrameThink of your We Energies field representative as part of your agriculture team.We have tools and resources that add to the bottom line of your business including:■ Stray voltage investigations■ Re-wiring projects■ Energy efficiency incentivesWe are here to help you use electricity safely and efficiently on your farm.Contact us whenever we can assist you with your energy service.800-714-7777we-energies.com/agricultureservices2K6352-PC


Achieve higher milk output through aminoacid balancing with Mepron ® . Mepron is anencapsulated, rumen-stable methioninesource that helps provide the nutritionalrequirements dairy cows need to producemilk. Formulating with Mepron helps cutcrude protein intake, decreasing theamount of nitrogen waste excreted by thecow. In the end, Mepron helps enhancemilk production in a manner that is moreefficient and less demanding on theenvironment. To find out more aboutMepron, call us at 678-797-4300 or sendan email to mepron@degussa.com.Visit us at the PDPWAnnual Business ConferenceMarch 13-14www.makemilknotmanure.com


26 PDPW - Dairy’s Bottom Line • January 2007STPOLYDOME CALF WARMERThe POLYDOME CALF WARMER provides a comfortable environment fornewborn calves. Includes a deluxe, high-performance, 110V heater with 3heat settings and 2 fan settings for proper regulation in all conditions. Topsection is hinged and removable for calf entry. Floor is raised and slotted foroptimum heat circulation. Includes vent/peep hole for proper ventilation andviewing the calf without opening the unit. reg $455- SPECIAL $435-CALF JACKETSFor warmer, drier, healthier calves, a CALF JACKET should always be athand to provide a barrier against wet bedding, drafts, and cold air, allowingthe calf to put its energy into growth. Animart carries a wide selection ofjackets for your calves winter wardrobe. NEW Economy StyleJersey & Reg Holstein Reg $ 29- SPECIAL 6 @ $24XL Holstein Reg $ 32- SPECIAL 6 @ $27KOZY KALF SLEDTake Your Calves Sledding this Winter! A gentle, humane way to haulcalves. The KOZY KALF SLED pulls over slush, snow, mud, ice, rocks, andgrass. Reinforced skids for long life and easy towing. There is no need to tiethe calf, and the Kozy Kalf Sled allows the mother to see and smell her calf.Polyethylene construction. Sled comes with net, rope, and cable ties.1.800.255.1181animart.comBeaver Dam WITurn to the PAS-certifiednutritional staff of LandmarkServices CooperativeLearn more at the ForageSolutions Conference -January 24th - Alliant EnergyCenter in Madison800-236-3276www.landmark.coopWelfareContinued from Page 2ing an animal welfare strategyis scheduled with a broad rangeof stakeholders. In addition toproducers, leading restaurantsand retailers; food companies,processors and other criticalstakeholders will engage in thedairy industry’s animal welfarediscussion. The ultimate goal isto develop solutions that areacceptable to customers, consumersand producers. Wemust agree to: 1) embrace themoral obligation of animal welfarefor the dairy industry; 2)begin a process to establishmeaningful standards for dairycow care, and create a systemto measure performanceagainst these standards; and 3)aggressively communicate thevalue of this system to all segmentsof the food chain, includingconsumers.Dairy producers must takethe lead the animal welfare discussionand define animal welfareourselves, rather than waitingfor the extremists or unin-Transitionformed to paint their dramatic,ugly and ill-informed portraitsof our industry. We need todrive the debate on animal welfareand that’s the part that willbe the most uncomfortable foran industry that has traditionallyminded its business and onlyacted once it was forced todefend itself.Animal welfare is an issuefor the entire dairy industry andPDPW is working to facilitatethe discussion, while alsoensuring that dairy producersshape the issue, control thedebate, and design a systemthat we will be held mostaccountable for. When weweigh the pros and cons ofbeing involved with the animalwelfare discussion, it is clearthat working proactively andaggressively for the good of theindustry is the only place to be.Leaders tackle the toughissues and in order to ultimatelyshape their own destinies. Asan industry we must lead theanimal welfare discussions.Continued from Page 11beneficiary on a life insuranceplan or opening a checkingaccount for a newly createdPartnership, Corporation orLLC, these tasks need to becompleted in a timely fashion.Many excellent transitionplans have been rendered uselessbecause the family membersor their advisors failed toeffectively implement the plan.In these instances, the timeand money invested to developthe transition plan are all fornaught.Keep in mind the transitionplan should be reexaminedwhenever there is a change incircumstances, i.e. birth, marriage,divorce, death, seriousillness or unforeseen opportunity.Also, when a major tax orfarm law is passed the planshould be revisited to determineif terms of the plan aregreatly affected. In the eventthat a plan needs alteration, anamendment to the documentor an attachment to a Willcalled a “Codicil” can updatethe plan easily and inexpensively.Wrap upIt is highly recommendedthat some type of help or counselbe sought when developinga transition plan since it is acomplex process. Ideally, aspecialist who understandsagriculture, real estate law,estate tax law, elder-law, farmgovernment programs andfamily dynamics should helpdraft the plan. Contact yourlocal Farm Credit office to talkwith an estate planning specialistor for more informationon additional resources.Farm Credit Wisconsin, acollaborative effort of theFarm Credit associationsserving Wisconsin, is committedto supporting thestate’s dairy industry andwas the first-ever PDPWMission Sponsor. Its memberassociations include AgStarFinancial Services,Badgerland Farm CreditServices, FCS FinancialServices and GreenStoneFarm Credit Services.


Advanced Comfort Technology, Inc.Toll Free: 866-524-6575www.advancedcomforttechnology.comCow ComfortTechnologyDual ChamberWaterbedsCow Comfort CushionDairymen across the nationsay that the Dual ChamberWaterbeds . . .•Offer SuperiorCow Comfort•Use Less Bedding• Stay Drier• Keep Cows Cleaner•DoNotPack• Lower Your Somatic Cell Count•ReduceMastitis Incidences•WillNot Harbor or Grow Bacteria•AndMostOf All -They Are Long Lasting U.S. Patent No. 6,935,273For a FREE VIDEO and a list of dairymen in your areathat have installed dual chamber cow comfortcushion waterbeds call...Rugged, Reliable EconomicalMANUREALLEYSCRAPERSIn 6, 7 & 8 Foot WidthsFEEDALLEYSCRAPERS• Hoof Traction In AnyDirection•Does Not Stretch•Will Not Buckle or PullApart When CleanedWith A Skid Steer orAlley ScrapperWill Not BuckleUse In ParlorHolding AreasUse In Free StallWalk WaysUse In OpenFeed Lots


28 PDPW - Dairy’s Bottom Line • January 2007STProducing quality milk is how we make our living!At Renaissance, we support your efforts everyday. We are happy to feature this ad inpublications nationally, so we can continue togrow our dairy industry… together.MAKE MORE MILK! MAKE A DIFFERENCE.What is♦98% Fat Free *♦Very nutrtritious♦Naturally high in calcium♦Helpful l in building strong bones♦A A cancer preventativetive contains CLA , a naturalaid in preventingcertain types of cancer♦Delicious hotor coldDrink all you want and well help make more!Thats our job.DRINK MILK & THANK A DAIRY PRODUCER EVERY DAY*Two percent milk is 98% fat free – making milk a healthy source of protein, calcium,and other nutrients needed by the human body. Conjugated Linoleic Acid (CLA) is predominantly found in dairy productsand has been found to reduce the risk of certain types of cancer.We are committed to quality nutrition for dairy cows, so you can drinkmore milk and enjoy a healthy, fulfilled life. Treat yourself to milk!After all, you deserve it.RENAIISSANCE NUTRIITIIONP.O. Box 229 Roaring Spring, PA 166731.800.346.3649www.rennut.comMiillk ~ fforr a healltthy, , prroductti ive lliiffe!!PDPW Offers Financial, BusinessTransition Symposium Feb. 13-14Drs. Kohl and Ionovicmake a Wisconsin “house call”and draw upon their combinedhalf-century of expertise workingin the agricultural field.Join PDPW for a high levelmanagement session that providesbusiness managementtraining at a MBA level youcan utilize on your dairy. Thesymposium is highly interactiveusing case-study scenariosthat carry throughout bothdynamic days. It will be heldFeb. 13-14 at the Crowne Plazain Madison. The symposiumstarts at 8:45 a.m. with registrationon Tuesday and concludesat 4 p.m. on Wednesday.Fasten your seat belts andget ready for a power packedtwo-day MBA-level symposiumthat will be lecture, casestudy and discussion based. Itwill provide you with a formatto analyze your business’future from a financial, managementand business transitionstandpoint.Day oneDay one will be led by atriple team of speakers includingDr. Kohl, the academic;Sam Miller, who represents thebanking and lending side fromM&I Bank; and Linda Hodorff,an entrepreneur and dairy producerfrom Eden, who alsohas professional financialtraining background.Bring your partner, spouse,son or daughter to come hearstraight talk and a threedimensionalperspective concerningyour finance and businessmanagement practices.Through group interaction,networking and informationpresented you will be given atemplate for business analysisto launch your strategic, financialand business planning for2007 and beyond.Dr. David Kohl is the mastermindbehind this symposium.He’s worked closely withPDPW for years and is themost requested resource thatPDPW offers. Kohl brings tothe table 30 years of experienceworking with bankers,producers, and other agribusinessleaders. He’ll cover keyratios and financial performanceindicators, personalfinancial benchmarks andinvestment strategies.Kohl delivers this upbeatpresentation that takes numbersand incorporates themwith the psychology of financing.His presentations makeyou think and are very fastpaced.Kohl passes to you“beyond the edge” informationbased upon his many years ofacademic research and experienceof working with commercialbanks and agri-lendersthroughout the world. He’straveled over 5.7 million milesthroughout his professionalcareer, conducted more than3,500 agricultural workshopsand published four books andover 400 articles on financialand business-related topics injournals and other popularpublications.Sam Miller is the seniorvice-president of agribusinessbanking for M&I Marshall &Ilsley Bank. He coordinatesand leads production agricultureand agribusiness bankingactivities. M&I is the largestagricultural bank in Wisconsinand the ninth largest in theUnited States. Miller has 23years of agricultural bankingexperience, the past 19 at M&I.He’s a board member of theWisconsin Dairy 2020 Council;member of the AmericanBankers AssociationAgriculture and Rural AffairsCommittee; school director forthe Wisconsin BankersAdvanced Ag Banking School;and a board member of theDairy Business InnovationCenter.Linda Hodorff is a greatleader in our industry. Hodorff,from Eden, has proven thatshe knows cows, knows thenumber side of dairying,knows how to work with aSee Symposium, on Page 30


Push the boundaries of your field’s potential.Right now, on farms throughout theMidwest, HybriForce-400 hybrid alfalfais delivering an extra ton of hay. Areyou getting yours? More than 3,000on-farm, strip-plot harvests across ninestates show HybriForce averaged 15percent higher yields than conventionalalfalfas. That equals one extra ton ormore. In dollars, it means $375 more peracre when calculated over three productionyears at a hay value of$125 per ton. The same potentialexists in your field, but you have to bewilling to try it. Read the data thatgives us so much confidence. CallDairyland Seed at 1-800-236-0163 orvisit www.dairylandseed.com. Findthat extra ton in your field.Contact your local Dairyland representative:BARRONGene Hoard715-455-1985BROWNFrank’s Feed Mill920-837-7442Mazna Farms920-863-5179BUFFALOKlein’s Feed & Seed715-926-3531Tony Pyka715-985-3859Schmitt Bros.608-687-8245BURNETTBurnett Dairy Coop715-689-2467CLARKMelvin Dux715-743-3824Randy Kitzhaber715-267-7488DOORMike Henschel920-743-1906KEWAUNEERobert Baudhuin920-837-7572Rolling Hill Dairy920-845-5080MANITOWOCGerald Borgwardt920-758-2493Maribel Grain920-776-2120Poplar Farm Sales920-758-2961Erwin Waack920-772-4229MARATHONBronsteatter & Sons715-536-8891MARINETTEDaniel Van De Walle715-789-2192MARINETTELeland Van De Walle715-854-2449OCONTOJagiello Farms920-829-6162OUTAGAMIEKevin Naze, DSM920-309-0255PORTAGEHarlyn Schulke715-366-7104SHAWANOAdam Hagel715-758-7459Brad Krueger715-526-5671Alan Leidel920-822-1322David Race715-524-2280SHEBOYGANBoyd Hoffmann, DSM920-946-3440ST. CROIXMark Maes, DSM715-684-9353TREMPEALEAUBill Borgwardt715-985-3070WAUPACARay Dusel920-596-3292Jeff Zabel920-867-3386Matt Honken, DSM715-498-0919Tom Abraham, RSM920-570-3852Your field is our first priority, as it has been since our company was founded more than 95 years ago.Discover the value of research. Visit www.dairylandseed.com or call us at 800-236-0163.Dairyland Seed • Where research gets results


30 PDPW - Dairy’s Bottom Line • January 2007STSymposiumContinued from Page 28variety of people and knowswhat it takes to be successfulin the dairy business.Hodorff and husbandDoug along with their son,Corey, and his wife Tammy,operate Second-LookHolsteins. Together they haveexpanded their herd of registeredHolsteins from 40 to 800head. Hodorff has been honoredas the Industry Woman ofthe Year by the World DairyExpo and is a founding boardmember of PDPW. Hodorff’sdairy business, financialexpertise and experiencebrings to this symposium a“reality” that only a top-notchprofessional in the dairy businesscan offer.Day twoNow’s the time to dive intoserious business transition!This session provides you withthe strategies, tools and educationalarmor for navigatingthrough business governanceand transition. Dr. DonaldJonovic, Ph.D., will dive intohow you can leave the ultimatelegacy. He will focus youon how closely-held and highperformingbusinesses achievereal purpose and continuity.Day two will cover theexact moment farm managementor ownership transfersoccur is more likely to be drivenby uncontrollable eventsthan great planning. As businessmanagers, your job is tobe sure those “unexpected”transitions are more predictableand go as smoothly aspossible.A successful transitionstrengthens business (withnon-relatives as well as withfamily) harmony and preservesasset value. Good planningalso focuses as much onassuring a high quality of lifebefore, during, and after transitionas on minimizing tax.This program focuses on the“what” and “how” of achievingall those goals and on helpingyou get started, plan, and getthe job done.Jonovic has been a businessadvisor since 1973. Hefocuses on the unique issuesrelated to management development,growth and ownershiptransition in the successfulowner-managed business.His professional consultingpractice includes industrialand agricultural clientsthroughout North Americaranging in size from one millionto one billion with anemphasis on companies transitioningto management teams,including those with significantproportion of non-familykey managers.Jonovic has written sevenbooks about business ownership,family-business transitionand the management ofchange and is president ofJamieson Press. Jonovic haslectured at universitiesthroughout North America.Registration is limited tothe first 100 participants and isdue by Feb. 5. Walk-ins willnot be permitted.The enrollment rate forPDPW members is $175. Nonmembersare also welcome fora enrollment fee of $250.Register online atwww.pdpw.org, call Julie at800-947-7379 or send yourcheck to PDPW, Financial/Transition Symposium, POBox 2, Fox Lake, WI 53933.To reserve a room at theCrowne Plaza, Madison-EastTowne, 4402 E. WashingtonStreet, Madison, call CrownePlaza at 608-244-4703 and askfor the PDPW block.On average, the investment to build an energyefficientfarm operation pays for itself within two years bysaving energy and money. And right now, you can save even more.Contact your agricultural and energy efficiency experts from We Energies andFocus on Energy to learn about our increased rebates on energy efficiency equipment.Focus on Energy (800) 762-7077 we-energies.com/agricultureservices© 2006 Wisconsin Focus on Energy BP-8011-1105


The world’s largest database on a single nutrient: Sel-Plex ®No other product can provide this much support:• 109+ Scientists• 55 Meat, milk and egg quality trials• 37 Reproduction/Fertility trials• 35 Performance trials• 29 Efficacy/Stability trials• 15 Bioavailability trials• 12 Antioxidant function trials• 10 Immunity trials• 7 Safety/toxicity trials•7 Years through FDA review•6 Patents applied for•3 Production facilitiesAlltech Wisconsin • (920) 386-9651 • www.Sel-Plex.com


SolarisProBran ProBran is the highlyanticipated new feedingredient from QTI, Inc.Produced at Badger StateEthanol, ProBran has greatpotential for top dairyproducers. Probran will beavailable pelleted and theadded solubles make itextremely palatable.SPB 02-01/07c 2007 QUALITY TECHNOLOGY INTERNATIONAL, INC.If you are looking for acost-effective substitute forcitrus or beet pulp, look atProBran!• MORE PROFITS— cost savingshelp profitability• NUTRIENTS — proteins andB vitamins• LOW FAT — use more ProBranin your cow’s diet• HIGHLYDIGESTIBLE NDF—moreenergyperpoundGet on our mailing list to makesure you can be one of thefirst ones to benefit by puttingProBran in your herd’s ration.www.solarisquality.com608-329-3900You will find Solaris brand products at Badger State Ethanol, Monroe, WI

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