20 The best is now even better
March 2017 • PDPW • Dairy’s Bottom Line
Make milk check work JON ZANDER Badgerland Financial
In recent weeks, many dairy producers have received a higher price for their milk than they have in a long time, leading to a cautious optimism that 2017 might present a chance to catch up financially. While it’s not expected that milk prices will reach the peak price experienced in recent ye a r s , m a n y producers are happy with more “normal” market prices Jon Zander t h a t r e l i e v e some financial stress. Current producer-lender conversations are turning to how to most effectively use any extra in the milk check. Pay down debts or save Some producers will need to put forth a concerted effort to pay down overdue accounts and limit capital spending – especially producers who tapped into revolving lines of credit,
The best is now even better
Calf-Star
4324 N. Cty Rd. P., New Franken, WI 54229 (920) 680-5976 fax: (920) 866-9819 info@calfstar.com www.calfstar.com
which should be paid completely within 12 months. It’s not likely the higher milk prices will last long; making wise choices now is imperative to an operation’s bottom line. For those who made it through the low-milk-price cycle with little struggle, this may be a year to reinvest by adding a new barn, upgrading equipment or buying some neighboring land. But producers should also carefully consider strategies to manage the next milk-price drop. The options available to any dairy producer in the coming months correlate directly with his or her financial position at the onset of 2016. The wise management of milk-price increases is especially critical after such an extended lowprice period. Talk with a consultant or lender to put a plan i n p l a ce fo r t h e co m i n g months. Jon Zander is a dairy lending specialist with Badgerland Financial, a mission sponsor of PDPW.