READY, SET, GO! - CAN YOUR REGION STILL COMPETE?
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1 READY, SET, GO! - CAN YOUR REGION STILL COMPETE? Presented By: MONTE L. HEMENOVER AVENUES FOR CHANGE TM To: Attendees Of Elite Dairy Producer Business Conference AT: Bellagio Hotel Las Vegas, Nevada November 9, 2010
2 The Presentation s Four P S Purpose Picture Plan Participation
3 AHAS!!
4 WHAT S THE EQUATION FOR CHANGE? CHANGE + HUMAN BEINGS TRANSITION SOURCE:
5 TRANSITION IN THE U.S. DAIRY INDUSTRY You Must Change The Way You Think About: 1. Opportunities 2. Risk 3. Investing 4. Buying 5. Contracting 6. It s Not Business As Usual 7. EVERYTHING!!!
6 THE EQUATION FOR FOOD Population X Consumption = Required Food Production
7 6,908,688,000 People On Earth Years It Took to Add Each Billion Since *World Population Will Grow To 9,149,984,000 In Up 32.4% in 40 Years Billion 3 Billion 4 Billion 5 Billion 6 Billion 7 Billion (1927) (1960) (1974) (1987) (1999) (2011) SOURCE: WHO Population Division - United Nations
8 WORLDWIDE FOOD REQUIREMENTS Total Food Production in Past 200 Years will Be Required In Next 40 Years! U.S. And Canada Will Be Major Providers For Food. U.S. And Canada Currently Represents 4.8% Of World Population. North America Currently Represents 6.0% Of World Population.
9 CAN YOUR DAIRY COMPETE IN YOUR REGION? Can Your Region Compete In The U.S.? Can The U.S. Compete In North America? Can North America Compete In The World?
10 WHAT DOES COMPETE MEAN? To Be In A Rivalry To Contend To Vie In A Contest
11 REGIONAL COMPETITION IN U.S. DAIRY INDUSTRY Steps In Being A Winner Survival Of Dairy Business Optimization Of Dairy Operation - Profitability Growth - Scale - Productivity - Management - Integration
12 MEASURING COMPETITIVENESS Spent An Enormous Amount Of Time Researching / Analyzing Data To Determine Regional Competitiveness Measurements! Not Very Accurate When Comparing: - By Dairy Operation / Business - By Dairy Cow
13 MOST ACCURATE REGIONAL COMPARISON FOR ABILITY TO COMPETE IS? Milk Production Costs How Much Does It Cost You To Produce A 100 Pounds Of Milk At Equal Quality?
14 PROFITABILITY NOT IN BUINESS FOR PRACTICE IN IT FOR PROFITABILITY!!!
15 CALCULATING DAIRY PROFITABILITY (Your Ability To Compete) Profit = (Milk Price / Cwt. - Cost / Cwt. Milk) X Volume Sold + / - Other Farm Income And Expenses
16 2009 MILK PRODUCTION PER COW RANKING TOP TEN STATES HIGHLIGHTED Hawaii = 48 Alaska = 50 SOURCE: USDA
17 2009 MILK PRODUCTION RANKING TOP TEN STATES HIGHLIGHTED Hawaii = 48 Alaska = 50 SOURCE: USDA
18 TEN STATES WITH LARGEST PERCENTAGE INCREASE IN MILK PRODUCTION BETWEEN 2009 AND 2004 Wyoming Texas South Dakota Idaho Colorado Michigan Nevada New Mexico Nebraska Wiscons in 57.3% 47.1% 40.5% 33.6% 30.0% 25.9% 20.0% 17.3% 14.7% 14.3% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% 220% 240% 260% SOURCE: USDA Percent Change
19 TEN STATES WITH LARGEST PERCENTAGE DECREASE IN MILK PRODUCTION BETWEEN 2009 AND 2004 Hawaii Alaska Arkansas Louisiana Mississippi Alabama North Dakota Tennessee Oklahoma Delaware -73.5% -59.9% -49.2% -43.0% -34.0% -33.1% -26.8% -21.3% -21.2% -20.1% % -90.0% -80.0% -70.0% -60.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% SOURCE: USDA Percent Change
20 2009 Per Capita Pounds Of Milk Production 588 1, , , , LEGEND: White: Less than 300 lbs (26) Green: 300 to 600 lbs (8) Blue: Greater than 600 lbs (16) SOURCE: USDA / Avenues for change ,713 1, , , Hawaii = 55 (White) Alaska = 20 (White)
21 Percent Change In Per Capita Pounds Of Milk Production 2009 Vs LEGEND: Red : Decreasing States (30) Blue: Increasing States (20) Hawaii = Alaska = SOURCE: USDA/
22 TEN STATES WITH LARGEST PER CAPITA INCREASE IN MILK PRODUCTION BETWEEN 2009 AND 2004 Wyoming 45.3% South Dakota Texas 33.9% 33.1% Michigan 27.4% Idaho Colorado 20.3% 19.0% Ohio Wiscons in Nebraska Iowa 13.1% 11.4% 11.2% 11.2% 0% 10% 20% 30% 40% 50% 60% SOURCE: USDA Percent Change
23 TEN STATES WITH LARGEST PER CAPITA MILK PRODUCTION DECREASES BETWEEN 2004 AND 2009 Hawaii Alaska Arkansas Louisiana Mississippi Alabama North Dakota Tennessee Oklahoma Delaware -74.5% -61.1% -51.7% -43.0% -35.9% -35.5% -28.0% -26.0% -25.3% -24.2% % -50.0% 0.0% SOURCE: USDA Percent Change
24 U.S. MILK PRODUCTION DIVIDED INTO SIX REGIONS Regions: 1. Northeast 4. Southwest 2. Southeast 5. Rocky Mountain 3. Upper Midwest 6. Pacific
25 IN THE U.S. WHERE S THE MARKET FOR MILK AND OTHER DAIRY PRODUCTS? U.S. Time Zones Population % Population Estimate 1. Eastern Central Mountain Pacific Total U.S
26 CRITERIA FOR REGIONAL COMPETITION 800+ Cows Milking Rolling Herd Average: 36,000Lbs. Somatic Cell Count: >175,000 Fat: <3.2 Protein: <2.65 Cull Rate: >29%
27 STATE PERCENTAGE MILK PRODUCTION TOTALS State U.S. Milk Production % U.S. Population % 1. California Wisconsin New York Idaho Pennsylvania Five State Total
28 SUMMARY Can My Region Compete? YES!!! However: Must Have The Ability To Produce High Quality Milk At A Cost / Cwt. Equal To Low Cost / Cwt. Production In Continental U.S. PLUS The Transportation Cost To Deliver To Your Market
29 Chi Ching Chi Ching
30 From The Day You Were Born, Till The Day You Ride In The Hearse Things May Be Bad, But They Could Always Be WORSE!!!
31 The End Thank You! TM Monte L. Hemenover Bentley View Court (314) Office St. Louis, MO (314) Cell (314) Fax
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