Riding the Highs & Lows of Milk Prices

Transcription

1 of Milk Prices Doug & Linda Hodorff Hodorff Enterprises Our Mission: A team with a passion for family and dairy, respecting people, community and environment. Hodorff Enterprises Overview 1. Second Look Holsteins, LLC 1080 cow dairy including dry cows 3X- No BST Goal of 6# of Combined Fat & Protein (CFP) Partnership Doug & Linda Hodorff Corey & Tammy Hodorff 1

2 Hodorff Enterprises Overview 1. Second Look Holsteins, LLC 1080 cow dairy including dry cows 3X- No BST Goal of 6# of Combined Fat & Protein (CFP) Partnership Doug & Linda Hodorff Corey & Tammy Hodorff Hodorff Enterprises Overview 2. Broken Bow, LLC 950 cow dairy including dry cows 3X- No BST Goal of 6# of Combined Fat & Protein (CFP) Partnership Doug & Linda Hodorff Jacob Stern 2

3 Hodorff Enterprises Overview 2. Broken Bow, LLC 950 cow dairy including dry cows 3X- No BST Goal of 6# of Combined Fat & Protein (CFP) Partnership Doug & Linda Hodorff Jacob Stern Evolution of Hodorff Enterprises Our Mantra: Progressive Growth 180 Cows 2 Locations 575 cows 2 nd Look Partnership Established 700 cows 2 nd Look- 900 cows 2 nd Look cows Modernized: 400 cows Free stall facility Milking Parlor Nebraska Heifer Facility Established Broken Bow Dairy in Nebraska Established Broken Bow 950 cows 3

4 Evolution of Hodorff Enterprises Our Mantra: Progressive Growth 180 Cows 2 Locations 2 nd Look Partnership Established 700 cows 2 nd Look- 900 cows 575 cows 2 nd Look cows Modernized: 400 cows Free stall facility Milking Parlor High corn prices Expansion learning curve Nebraska Heifer Facility Established Financially Tough Low Milk Prices Broken Bow Dairy in Nebraska Established Great Years Broken Bow 950 cows 2009: 2 nd Look Holsteins: Good equity position Broken Bow Starting Up: Low equity position Good equity position of 2 nd Look Holsteins helped support Broken Bow 4

5 2009: Bleeding Red Ink Never sacrificed the cow comfort, management and nutrition of the cows Compensation adjustment based on job description separate out management responsibilities and pay accordingly Banker relationship is critical Should help you get through tough times if you are set up right August 2009: All Hands on Deck Empowered all employees: Suggestions to save 3% Everything was on the table In the end, we saved more than 3% We were still losing money.just not as much Employees felt part of the solution Regularly visit this exercise with employees 5

6 : Milk Marketing: If You are All In: Need Nerves of Steel Our philosophy has evolved over the last 7-8 years You can t make money at milk marketing You can manage risk We still participate but at a much lower level : Enterprise Accounting: Allows you to know your Cost of Production 1. Second Look Holsteins 2. Broken Bow Dairy 3. Peniel Acres Tracks cropping costs Sells feed to the dairies 4. Nebraska Heifer Farm Understand heifer rearing costs better 6

7 : Financial Peer Group: Not just a dairy group Different agricultural businesses: Hog producers; Crop farmers, etc. Different states represented Highly valuable : Continuing Education: TEPAP- The Executive Program for Agriculture Producers Not just for young people Many great programs out there to take advantage of 7

8 What Have We Learned Best cost feeding philosophy Solid equity position gives you flexibility Be your own contractor with simple and basic construction Know your cost of production Empower employees for their insight and suggestions Compliance Compliance Compliance Communication is key Looking to the Future Try to stay 5-8 years ahead of the curve Transition plan: Management responsibilities are pretty well transitioned Other son, Clint came back in 2016 to manage the cropping enterprise Transitioning the equity needs to be figured out Paradoxically, if you are debt free, your business is likely not modernized enough to be saleable Stay on top of technologies- Genomics, Herd Performance Software, Precision farming, Business Strategies, etc. etc. Peer groups and continuing education 8

9 Hodorff Enterprises Our Mission: A team with a passion for family and dairy, respecting people, community and environment. 9