John Ellsworth has been very effective in assisting our dairy farm in cutting costs in some key management areas. His company, Success Strategies, is correctly named as he is persistent and diligent in showing us key areas we need to work on.
Archive for June, 2010
We’ve talked previously about setting goals! There are benefits to being prepared for crises that can occur in your business. We need to have a plan in place for these types of challenges.
Futurists Jim Taylor and Watts Wacker, in their book The 500 Year Delta, stated that every business should develop a “Disaster Agenda”. While all of us are faced with negative challenges and nobody wants to dwell on them, we would be well served if we have given these situations some forethought. This is true for a crisis that might occur in any part of your operation: herd health, nutrition, facilities, management, or finances.
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This is a question many people are asking. I believe it’s something we need to be looking at regularly. As far as when you should fix them, that depends on many factors.
* Are you planning to stay with your current lender?
Are there any Prepayment Penalties? They have committed to investors to pay a fixed rate on their funds. Thus, you will likewise be committed to the bank.
* Will you be increasing your loan amounts soon?
Be certain that this doesn’t impact your rates. Often, they’ll set up fixed rates on portions of your loan at various maturities.
The Business Confidence Maximizer™
June 2010 Issue
Published by John Ellsworth,
© Success Strategies, Inc.
People love to be offered options in life, up to a certain point. Unfortunately, if they are faced with too many options or ones that they do not understand, the choices available to them become overwhelming. Actually, that may describe the current situation with Milk Options. There are so many options available that the choices can, indeed, be confusing. In November 2009, I wrote an article for the Western Dairy Business publication that centered upon what I felt were the “Top 10” steps to take in preparation for the coming year.
One of the most critical of these steps is the development of a Milk Marketing Plan. This is an absolute must today, particularly with the increasing amount of volatility and fluctuation in milk prices. Understanding your break-even price level and knowing how to position your business to achieve that price will continue to be essential to your financial future. Get involved in your own marketing plan by working with an options broker that you trust. He or she can be invaluable to your business.
Recently, I also had an opportunity to moderate a panel of Agricultural Lenders in a discussion on the availability of financing. One of the recurring themes that seemed to surface was the issue of whether or not a producer should be using milk options, also known as Puts and Calls, in the management of their dairy business. Their response was unanimous.
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