Dairy St r Central Plains Dairy Expo Preview
Special Edition 1st Section
March 12, 2011
Dealing with the industry’s “new normal”
Swanson presents strategies to use for volatile dairy prices By Krista M. Sheehan Staff writer SIOUX FALLS, S.D. – With increasing price fluctuation, the dairy industry isn’t going to be the same as it has been in the past, said Michael Swanson, ag economist for Wells Fargo. Swanson will be presenting the seminar “New Strategies for the New Normal” at 9:30 a.m. on March 30 during the Central Plains Dairy Expo in Sioux Falls, S.D. “The ‘new normal’ is how
far prices can travel and how different they can be,” Swanson said about his presentation geared towards dairy producers. Swanson likes to use the Michael Swanson annual avAg economist erage temperature of 41 degrees in Fargo, N.D., to explain the concept to others.
Faithfulness to the ag industry Wells, Van Ess family to take part in CPDE Ag Prayer Breakfast By Jennifer Burggraff Staff writer SIOUX FALLS, S.D. – Agriculture is rooted in faith. In faith, crop farmers sow their seed each spring that it may yield a bountiful harvest. In faith, dairy producers milk their cows each morning and night to provide a nutritious product for consumers. In faith, all in the ag industry bear through the bad times that they may rejoice in the good.
with that because that’s the new reality.” Swanson said there are two avenues to take. The first is to build up more working capital, or free cash and liquidity to put into the business for paying day to day bills to help get through the averages. This has worked in the past, but because of extreme highs and lows the dollar value of what’s needed for working capital has changed. “How much working capital will you need? We don’t know just yet. We’re trying to get a reasonable estimate and we’ll talk about that in the presentation,” Swanson said. The second avenue to take is looking for trade opportunities and using the market to
contract to your advantage. “This is hard for dairy farmers to hear, but it (struggling through low times) didn’t have to be this way. They had plenty of opportunities to sell their milk and buy their feed ahead of time … the question is ‘Why didn’t they do it?’” Swanson said. Swanson said dairy farmers need to start thinking like those in the corn and soybean business, where they buy a product at a lower price and sell it at a higher price. “If they can’t buy it for less than they sell it they don’t go into that trade. Dairy producers Turn to Swanson / Page 3
11th Annual Central Plains Dairy Expo, March 29-31
But what about God’s faithfulness to the ag industry? What role does that play in the grand scheme of things? That will be the focal theme of this year’s Ag Prayer Breakfast, beginning at 6:45 a.m. on March Mike Wells President and CEO 30 at the S i o u x Wells Dairy, Inc. Falls Convention Center in Sioux Falls, S.D. “This is a great opportunity for people from all walks Turn to Breakfast / Page 2
“If you dress for 41 degrees in Fargo you’ll be uncomfortable nine months of the year and dead three months,” he said. The same can be applied to milk prices. Swanson said he can give people an average milk price for the year, but what people really need to know is when the highs and lows of the price are going to come. “I can give you a perfect average for the next five years for the price of milk – just like I can forecast on average 41 degrees in Fargo – but it won’t help you survive,” he said. “We’re seeing higher highs and lower lows both in the milk and feed prices. As a dairy operator, you have to find a way to deal
Photo provided
The Thrifty Dipper booth had many visitors during last year’s Central Plains Dairy Expo. There are over 200 exhibitors signed up to participate in this year’s tradeshow. In addition to the tradeshow, the Central Plains Dairy Expo, scheduled for March 30-31, is also featuring keynote speakers Michael Swanson, David Okerlund, an Ag Prayer Breakfast, breakout sessions and a John Michael Montgomery concert on March 29. See inside for more information on these events.
Central Plains
Central Plains Dairy Expo
Dairy March 19-20, 2008Expo
S i o u xMarch F a l l29-31, s, SD 2011 C oSioux n v eFalls, n t i oSD n •CConvention enter Center