Host Katie Wantoch and Lyssa Seefeldt, Extension Dairy and Livestock Educator in Eau Claire County, discuss a farmer and his wife who are looking for advice on next steps for their dairy farm and timing the sale of their cows.
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Katie Wantoch
This is UW Extension’s Farm Management AgriVision Podcast. I am Katie Wantoch, Agriculture Agent with UW Madison Division of Extension. I will be chatting with fellow Extension educators as we answer questions from farmers and share our knowledge and expertise on how you can improve your farm management skills. Today, I am joined by Lyssa Seefeldt dairy and livestock agent in Eau Claire County. Welcome Lyssa to the podcast.
Lyssa Seefeldt
Hi, Katie. Thanks for having me.
Katie Wantoch
Lyssa, a farmer and his wife wrote in and are looking for advice on next steps for their dairy farm. The couple is in their late 60s, milk 90 Holstein cows and farm 220 acres in northeastern Wisconsin. They started thinking about selling their cows in 2014. And then 2015 milk prices dropped and so did cow prices. So they kept milking. Now that milk prices are finally improving. They’re wondering if they are better off selling their cows next fall, or waiting until spring. Fortunately, they’re only debt is 50,000 they still owe for a new tractor bought back in 2014. Their plan is to sell the cows, heifers and machinery. They mentioned that the neighbor has already talked to them about renting their land, they will miss the cows but not the work. Even with a full time hired man, the couple says it is getting to be too much work at this stage in their lives. What advice might you have for them, Lyssa?
Lyssa Seefeldt
Yeah, so there’s a lot of things that you can be thinking about with this question. And one of the first things that you should be thinking about is just pausing for a second, and thinking about where you want to be going, because we don’t want to just jump into something. We do want to think about what our actual needs are. One of the things that may be helpful is to consider what your family household expenses are. You know, according to the University of Minnesota, FINBIN database, back in 2018, total cash family living expenses for dairy farms was right around $50,844. So knowing what your family living expense is, is going to be important as you’re working through this process of how you’re going to handle your scenario. Does that mean with today’s prices that you can make the income that you need? Or if you wait is that going to be better? That’s really something that is going to be largely dependent on where your family living expenses are. That’s the first kind of big thing that you need to be thinking about. And then another thing that you want to be thinking about is, what kinds of expenses might you need to cover after the sale of those animals when you don’t have that milk check to rely on. Because there may be some things that you’re not factoring in at the moment. So making sure that you know what your expenses are, and is that sale still going to be that viable option with those expenses, knowing that you’re not going to have that income from the milk check to be relying on anymore. So that might be something that we need to be thinking about. You also want to be looking at, maybe we can look at things like historical prices, maybe giving you some hints as to if it’s going to be in your interest to sell in that spring time versus the fall timeframe, I was looking at some historical prices to kind of get a better picture of what markets are looking like in spring versus fall. And there’s a nice article on income over feed costs per milking cow per day, which might be a good way to compare your farm’s gross income over the course of the year. And we know that much of our cost of production is our feed costs. And so having that overview may be helpful to think about where we’re at with our milk production, our feed costs, you know, where the milk price is. All those things to help us formulate is that going to be better for us to look at fall versus spring if we’re talking about selling the cows. And then one final thing that we should be thinking about is do we have feed inventory that we’ve already paid for? So did we already put our own labor and time or dollars in for custom work that we have put up for the animals really might make more sense to feed out before we sell the cows. If we don’t have an outlet for that feed inventory, that could be a significant investment, just sitting in at the farm. And if we don’t have an outlet for that, a neighbor that’s wanting to buy that from us and has a means to you know, get that from your farm to their farm, that could be a pretty significant chunk of change. So we do need to be thinking about that a little bit too. You know, conversely, we might be short on feed and we might need to be strategic in selling off some key animals to get to the next season. If we’re deciding that we wanting to sell the majority of the herd in the spring or fall, whatever the season might be that you’re in. So those are a couple of things that you might want to be thinking about. And then once we get beyond that sale of those animals, you know, maybe you need to be thinking about if we have buildings that are in good working order or they’re good enough shape to be able to repurpose them, you know, is there a certain enterprise that might be less taxing on you physically, that you’d be able to utilize that space, but still be able to bring in some income. I know, there’s some places that have converted over some of their machine sheds and things like that to some winter boat or camper storage, and they’ve been able to bring in some income, that route. So thinking creatively outside of the box, when it comes to doing supplemental income with what we have, can be really key to helping us move forward. And of course, whenever you look at things like that, you do need to look into any of the local ordinances that go with that, because there’s often regulation with that. So things to be thinking about as you move forward.
Katie Wantoch
Yeah, Lyssa, those are the a lot of great points that you make, you know, I’m sure this couple has worked hard over the years, and are really looking at hoping to sell their dairy herd when it’s at its peak. And it’s hard to predict when that’s going to happen. But yeah, looking at the feed inventory, and knowing how much do you have. How long, you know, can you keep the animals because you’ve already invested in those assets and kind of utilize them unless you have a source of who’s gonna buy that feed inventory. And yeah, just looking at calculating some of those household expenses, in how you’re going to support that. And if you do need some supplemental income, how can you utilize some existing infrastructure that you have out there so thank you very much. Appreciate having you on the podcast today. For more extension Agrivision podcasts are resources to improve your farm management skills, check out farms.extension.wisc.edu Thanks for listening.
This is UW Extension’s Farm Management AgriVision Podcast. I am Katie Wantoch, Agriculture Agent with UW Madison Division of Extension. I will be chatting with fellow Extension educators as we answer questions from farmers and share our knowledge and expertise on how you can improve your farm management skills. Today, I am joined by Lyssa Seefeldt dairy and livestock agent in Eau Claire County. Welcome Lyssa to the podcast.
Lyssa Seefeldt
Hi, Katie. Thanks for having me.
Katie Wantoch
Lyssa, a farmer and his wife wrote in and are looking for advice on next steps for their dairy farm. The couple is in their late 60s, milk 90 Holstein cows and farm 220 acres in northeastern Wisconsin. They started thinking about selling their cows in 2014. And then 2015 milk prices dropped and so did cow prices. So they kept milking. Now that milk prices are finally improving. They’re wondering if they are better off selling their cows next fall, or waiting until spring. Fortunately, they’re only debt is 50,000 they still owe for a new tractor bought back in 2014. Their plan is to sell the cows, heifers and machinery. They mentioned that the neighbor has already talked to them about renting their land, they will miss the cows but not the work. Even with a full time hired man, the couple says it is getting to be too much work at this stage in their lives. What advice might you have for them, Lyssa?
Lyssa Seefeldt
Yeah, so there’s a lot of things that you can be thinking about with this question. And one of the first things that you should be thinking about is just pausing for a second, and thinking about where you want to be going, because we don’t want to just jump into something. We do want to think about what our actual needs are. One of the things that may be helpful is to consider what your family household expenses are. You know, according to the University of Minnesota, FINBIN database, back in 2018, total cash family living expenses for dairy farms was right around $50,844. So knowing what your family living expense is, is going to be important as you’re working through this process of how you’re going to handle your scenario. Does that mean with today’s prices that you can make the income that you need? Or if you wait is that going to be better? That’s really something that is going to be largely dependent on where your family living expenses are. That’s the first kind of big thing that you need to be thinking about. And then another thing that you want to be thinking about is, what kinds of expenses might you need to cover after the sale of those animals when you don’t have that milk check to rely on. Because there may be some things that you’re not factoring in at the moment. So making sure that you know what your expenses are, and is that sale still going to be that viable option with those expenses, knowing that you’re not going to have that income from the milk check to be relying on anymore. So that might be something that we need to be thinking about. You also want to be looking at, maybe we can look at things like historical prices, maybe giving you some hints as to if it’s going to be in your interest to sell in that spring time versus the fall timeframe, I was looking at some historical prices to kind of get a better picture of what markets are looking like in spring versus fall. And there’s a nice article on income over feed costs per milking cow per day, which might be a good way to compare your farm’s gross income over the course of the year. And we know that much of our cost of production is our feed costs. And so having that overview may be helpful to think about where we’re at with our milk production, our feed costs, you know, where the milk price is. All those things to help us formulate is that going to be better for us to look at fall versus spring if we’re talking about selling the cows. And then one final thing that we should be thinking about is do we have feed inventory that we’ve already paid for? So did we already put our own labor and time or dollars in for custom work that we have put up for the animals really might make more sense to feed out before we sell the cows. If we don’t have an outlet for that feed inventory, that could be a significant investment, just sitting in at the farm. And if we don’t have an outlet for that, a neighbor that’s wanting to buy that from us and has a means to you know, get that from your farm to their farm, that could be a pretty significant chunk of change. So we do need to be thinking about that a little bit too. You know, conversely, we might be short on feed and we might need to be strategic in selling off some key animals to get to the next season. If we’re deciding that we wanting to sell the majority of the herd in the spring or fall, whatever the season might be that you’re in. So those are a couple of things that you might want to be thinking about. And then once we get beyond that sale of those animals, you know, maybe you need to be thinking about if we have buildings that are in good working order or they’re good enough shape to be able to repurpose them, you know, is there a certain enterprise that might be less taxing on you physically, that you’d be able to utilize that space, but still be able to bring in some income. I know, there’s some places that have converted over some of their machine sheds and things like that to some winter boat or camper storage, and they’ve been able to bring in some income, that route. So thinking creatively outside of the box, when it comes to doing supplemental income with what we have, can be really key to helping us move forward. And of course, whenever you look at things like that, you do need to look into any of the local ordinances that go with that, because there’s often regulation with that. So things to be thinking about as you move forward.
Katie Wantoch
Yeah, Lyssa, those are the a lot of great points that you make, you know, I’m sure this couple has worked hard over the years, and are really looking at hoping to sell their dairy herd when it’s at its peak. And it’s hard to predict when that’s going to happen. But yeah, looking at the feed inventory, and knowing how much do you have. How long, you know, can you keep the animals because you’ve already invested in those assets and kind of utilize them unless you have a source of who’s gonna buy that feed inventory. And yeah, just looking at calculating some of those household expenses, in how you’re going to support that. And if you do need some supplemental income, how can you utilize some existing infrastructure that you have out there so thank you very much. Appreciate having you on the podcast today. For more extension Agrivision podcasts are resources to improve your farm management skills, check out farms.extension.wisc.edu Thanks for listening.
Related Resources
Information in this article was originally published as part of the Agrivision column in Wisconsin Agriculturist .
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