8 September 2015 • PDPW • Dairy’s Bottom Line
Milking technologies have significantly advanced in the past few years, including this 80-stall rotary parlor in central Wisconsin.
Technologies Continued from page 7
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Implementing technology is often done to reduce the number of man hours needed to do a certain job. However, keep in mind the impact it can then have on the kind of labor you need and what it might cost you to hire that skill set. With technology, we tend to see a shift to fewer workers, but a more unique and specialized skill set is needed to analyze and manage the data created by these technologies. You may need to pay more or look harder for these employees. On the flip side, perhaps there is an opportunity for a family member looking for a promotion or a next generation is willing to take this on.
IMPACT TO YOUR BALANCE SHEET When a major capital purchase is made, we want to know if it will either increase income or decrease expenses. We also look at how the investment will affect the balance-sheet equity. We know different types of capital investments will add value at different rates, technology included. Generally the more proven the technology the less depreciation you will see. Depreciation is a product of how much it’s used, how old it is and how much it is in demand by other people. New, unproven technology will probably see more
depreciation, but if it’s profitable and can pay for itself, then it does not matter. Lastly, we want to see how the investment will affect the collateral position. Cash flow of course is the most important factor to consider.
DO YOUR HOMEWORK If you are serious about investing in a technology to improve your farm, be sure to reach out to other farmers who are already using the technology you are considering. Innovative farmers are typically happy to “show off” their technology to others for the greater good. Ask them what they’ve learned, and what they would change or do differently if they did it again. If you don’t know other farmers who have what you are looking for, reach out through your networks such as PDPW or your county Extension agent to put you in contact with other farmers. Also, it can be good to meet with a dairy consultant to determine things such as cost savings, management changes needed and maintenance costs of implementing certain technologies. In closing, while technology can be a great addition, it’s not a magic answer to solve every challenge on every farm. You must think of these technologies as tools in your management tool box. When used effectively, they can help create solutions to save your farm time and money. Badgerland is a proud Mission Sponsor of PDPW.