Larry F. Tranel, Dairy Field Specialist, Northeast
Dairy producers and consultants can have major profit impacts on a dairy operations success by making sound financial decisions based on accurate analysis. The majority of producers cannot accurately name their production costs with a $1 per hundredweight range. Although benchmarking has been able to increase profits by 20% on some dairy operations, the majority of dairy producers (consultants) do not calculate financial benchmarks for their operations (clients).
This Field Specialist authored the Dairy TRANS financial software and the Managing Dairy Farm Finances program to assist producers and consultants with the financial analysis/management and financial benchmarking of dairy farms. During the 4-State Dairy Nutrition and Management Conference, this Dairy Field Specialist presented a workshop to 11 agri-business consultants and 2 producers to assist the accurate whole farm analysis of a dairy operation and then using financial benchmarking to determine strengths and weaknesses of a model dairy farm business regarding efficiencies on a per acre, per cow, per FTE (full-time equivalent) laborer and on a per cwt. equivalent basis.
100% of participants rated the program and the instructor, Larry Tranel as Good (9%), Very Good (64%) or Excellent (27%).
The following survey question depicts impact: What did you like most about the workshop?
Good program; This was very good and needs to be at the beginning of this program instead of at the end; Real farms; Give and take; getting a grounding on breakeven $; gave me the knowledge of where dairy farms should be regarding financial analysis; explanation of program; equation of milk hundredweights; this was the info I was looking for; gave a good overview of the whole farm financial analysis of an operation; it broke down the farm to find problems that can be improved.
Participants were then asked to please rate their knowledge or comfort level on a scale of 1 to 10 with 10 being full knowledge for the following statements both before and after this workshop.
1. My ability to understand dairy financial analysis. Before 5.45 After 7.00 +1.55
Increase = 15.5%
2. My ability to construct a net worth statement. Before 5.73 After 7.55 +1.82
Increase = 18.2%
3. My ability to construct a net farm income statement. Before 5.27 After 6.82 +1.55
Increase = 15.5%
4. My ability to construct a cash flow statement. Before 5.73 After 7.27 +1.54
Increase = 15.4%
5. My awareness of the Dairy TRANS 4.0 program. Before 1.27 After 8.00 +6.73
Increase = 67.3%
6. My willingness to do financial analysis with clients. Before 2.40 After 4.90 +2.50
Increase = 25%
7. My appreciation for accuracy in dairy financial analysis. Before 6.82 After 8.10 +1.28
Increase = 12.8%
8. My ability to use the Dairy TRANS 4.0 program. Before 1.64 After 6.10 +4.46
9. My ability to financially benchmark dairy operations. Before 4.10 After 6.27 +2.17
10. My ability to analyze a dairy on a per acre, per cow, per cwt. and
per full-time labor equivalent basis. Before 3.91 After 6.36 +2.45
11. As a result of this Managing Dairy Farm Finances Workshop, I plan to . . . .
Visit with my son-in-law; look closer at the cash flow if my own farm; inform people that don’t know about Dairy TRANS who want to know; adapt my parameters I’ve learned, and suggest clients purchase Dairy TRANS; buy the program and go over this information with the clients I work with that would benefit from it; work with more of my clients to help them understand the value their dairy operation brings to their farm enterprise; work closer with my client accounts to help analyze the health of the output; do more work in evaluation of dairy operations; try to learn more about dairy financial analysis.
12. What did you gain as a result of this Workshop?
Insight and a different look at this farm; increased confidence with financial management; I was not aware of a program to calculate all the information that Dairy TRANS does, I think it is a fairly easy way to analyze the finances of a dairy farm; wider knowledge of records analysis; a good tool I can use on farm, one more thing I can do to add value (A+); a better understanding of what is needed for producers to know about their operations and what their bankers want to know; a better understanding of dairy financials; more knowledge of this analysis system; how to better analyze my clients financial information.
June 16, 2006
109 - Dairy
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July 9, 2006
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