January is always a trying month as we work on finalizing our budget for the upcoming year. This is when a crystal ball would come in handy! Our process usually involves creating a first-round of the budget and then deciding what we can cut from there.
Looking back, 2017 was an interesting year. And, looking forward, unfortunately the 2018 milk-price forecast isn’t that great. The milk price hasn’t been horrible by any means — especially compared to what we saw a few years ago — but it seems like the prices for everything else has gone up. For example, with all of our recent construction, we had to buy a new manure pump. We bought almost the exact same pump back in 2009, and this past year, it was almost double the cost of what it was then. This is the reality of what farmers are dealing with right now.
As with every year, the plan is to use as much of our own feed as we can instead of having to buy feed, but in January, it is very difficult to predict what the fields will yield nine months from now. We look at the additives (vitamins and minerals) we put in the feed and decide if we can live without something for a little while without sacrificing any milk quality and animal health. Both are always a priority, so before we make cuts, we make sure they stay the same.
We also try to take advantage of every discount we can find. Buying seeds early, buying other items in bulk, paying up front for purchases… A lot of companies offer discounts for doing these kinds of things.
When it comes to budgeting, we believe in starting with the big picture and then cutting it down. With the huge addition of robotic milkers last year, we have to be especially conscious of our budget plans for 2018. But, I have all the confidence that we will make it work, just like we do every year.
