Managing for Dairy Profitability
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 business climate that is expected that year.
The cash flow provides a guide for both the manager and farm advisors 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.
For more information:
Contact Tim Beck, Penn State Cooperative Extension educator, at firstname.lastname@example.org or 717-240-6502
Monthly Cash Flow Planner
New additions to the monthly cash flow planner:
- Annual summary included that can be used independently or to summarize data entered in the monthly planner.
- Revised link to Brian Gould's new LGM planning tool.
- Re-organized worksheets to support either monthly or annual planning paths.
If you plan to use only Excel 2007 or Excel 2010 with the spreadsheet, use this version. (2007 or 2010 Excel file) Updated February 2012.
If you want the flexibility to use either Excel 2003 or 2007, use this version. (2003 Excel file) Updated March 2011.
Annual Cash Flow
A two-page worksheet to calculate a farm's Gross Margin to Guarantee and determine break-even milk prices. This form does not include the additional worksheets used to generate the number used in the plan.
Cash Flow Manual Calculations
See the links below for a version of the annual cash flow to use for manual calculations. Formulas are detailed for those not using a computer to calculate break-even milk price.
For more information on how to create a cash flow plan for your dairy, click on the links, below. Each link features an audio presentation by Tim Beck, Penn State Cooperative Extension educator, as he leads you through the actual spreadsheet.