Cash Flow Planning
Calculating Feed Costs to Manage Cash Flow
Why is a cash flow plan important?
At the end of each year, producers need to evaluate and benchmark their dairy operations. After identifying strengths and weaknesses, summarizing and benchmarking cost of production, and identifying production opportunities, the producer is ready to plan a cash flow for the coming year that reflects the expected business climate.
The cash flow provides a guide for both the manager and farm advisers to understand what it takes for the farm to achieve profitable income levels and to experience adequate cash flow. But developing the cash flow plan is only the first step and, since business conditions constantly change, the producer must review the plan against actual performance on a regular basis in order to make the adjustments needed to achieve or improve on planned outcomes. The process is repeated each year as another business cycle begins.
The Penn State Extension Dairy team offers two courses for cash flow planning:
- Managing Your Milk Margin to Improve Your Dairy Cash Flow
One-day workshop for dairy producers to create a cash flow and determine income over feed cost.
- Cropping and Nutritional Strategies to Improve a Dairy Farm's Cash Flow
"Train the trainer" course designed for agribusiness companies and personnel interested in learning how adjustments to cropping strategies can impact their clients cash flow.
Monthly Cash Flow Planner
Features of the Monthly Cash Flow Planner:
- Annual summary included that can be used independently or to summarize data entered in the monthly planner.
- Brian Gould's LGM planning tool.
- Worksheets that support both monthly and annual planning paths.
Excel 2007 or Excel 2010 only version. Updated November 2012.
Crop Enterprising Budget
The Crop Enterprising Budget spreadsheet can be used to charge the direct production costs to the crops produced and to split out a share of the whole farm overhead costs involved in producing grains and forages. The worksheet takes a cash flow approach to this issue since it uses Owner Draw and Principal and Interest in the calculations.
Simplified version of the dairy cash flow “Rations and Crops” sheet that looks at only the section to determine the Cost of Home-Raised Grains and Forages
Cash Flow Data Collection Sheet for Producers
Dairy producers should fill out this data collection sheet before attending a workshop or starting a cash flow plan.
Alternative Forages Fact Sheet
Fact sheet on considerations for implementing alternative forages on dairy operations
PDF version of Alternative Forages fact sheet