We often hear that animal health pros struggle to understand the financial picture for dairy customers.
According to 2017 income and expense summaries from Genske, Mulder & Co., the nation’s largest dairy accounting firm, the average cost of production for its clients last year was $16.86 per hundredweight. (That amount does not include current debt repayment and owner draw.)
Source: Hoard’s Dairyman, July 9, 2018. Link. Here is Genske, Mulder & Co. list of the top 10 expenses:
- Grain $5.78/cwt.
- Hay, silage and farming $4.99/cwt.
- Labor $1.76/cwt.
- Herd replacements $1.71/cwt.
- Interest and rent $0.78/cwt.
- Supplies $0.69/cwt.
- Depreciation/other $0.69/cwt.
- Repairs and maintenance $0.61/cwt.
- Milk hauling $0.49/cwt.
- Utilities $0.32/cwt.
INSIGHTS: Animal health pros can use this list to identify where services and products fit in the expense categories, if at all. Next, consider aligning your discussions with how your services and products can impact one or more of these expenses.