News / Blog

Dairy Industry Feeling Insecure About Future Milk Prices
June 22, 2016

Future milk prices are looking (somewhat) better, but it seems like since 2008 no one has felt completely secure in the stability of the dairy industry.

Being more cautious can be a good thing, but letting the milk prices and low milk margins get you down is not healthy for you, your family, or your farm in the long run. There is plenty of advice on how to manage your margins and your herd. Now, it is time to talk about how to manage your stress.

Stress shouldn’t be taken lightly or ignored. Stress can increase illness rates and farm accidents, which can then lead to additional stress and depression. Farm women are at particularly high risk for depression due to juggling the multiple roles of farm and family responsibilities and isolation (Lessenger, 2006). Farmers have one of the highest suicide rates in the U.S. (1.32 times more likely than the average U.S. citizen), which has been attributed to high economic stress, lack of resources in rural areas, access to firearms, working with family, and other factors like changing weather and markets. There is a lot about farming that cannot be controlled, but you can control the way you react to stressors.

Farmers are no strangers to hard work, hard times, and a bad economy.

If “Dairy Farmer” had a job listing, it may sound a little like this: Work 70 to 100 hours a week, little or no vacation or sick days; work is mandatory on all holidays and in all weather. You will be on call 24 hours a day, 365 days a year. Compensation will change month to month and drastically from year to year with little or no notification and will range anywhere from “you owe us money” to “you’ll be alright for now.” Factors affecting your pay will include but are not limited to: weather, markets, disease, accidents, machinery breakdown, government regulations, and/or family relations. Performance reviews will be completed by strangers you will never meet who have strong opinions on how you do your job that will be made public via social media. PLUS day-to-day activities include dangerous and potentially life-threatening work. And depending on your situation, some of your family will live and work with you across different generations, possibly including your in-laws. And if you are lucky enough to be working on the same farm your great, great, great, grandfather farmed, you have the added bonus of pressure to keep the farm going for the next generation who may or may not want to farm.

Farming is not for the faint of heart, and farmers are seen as some of the strongest and most resilient and committed individuals. However, everyone has a breaking point and eventually stress can catch up to even the hardest working farmer. Working on a farm can be isolating, and reaching out for help can feel too vulnerable for most. If you or someone you know is feeling the stress of farming, you can do something about it today and work towards a less stressed life for the future.

What can you do to survive today?

Bills are piling up, pregnancy rates are going down, an engine needs rebuilt, the weather won’t cooperate, and the milk check hardly seems worth it. You can have moments and days of feeling completely overwhelmed with what’s going wrong. Take a moment to count your blessings, be grateful for the positives in your life and on your farm, and be thankful for all of them. We often focus and dwell on the bad, and it can be easy to forget and take for granted all that we do have in our lives. This “it could be worse” attitude will get you through the day or week, but being grateful is not enough to make it through extended hard times.

What can you do to thrive through the hard times tomorrow and beyond?

Set priorities

What big picture items bring you joy from your work? There is a reason why you farm and why it is important to you and your family. Maybe it’s because you work at home with flexible hours and have every meal with your family. Children and other family members get to work alongside you. You work hard for an incredible feeling of self-worth and accomplishment in seeing your farm grow and produce. Know what is important to you so you can say no to the things that aren’t a priority and, more importantly, say yes to those that are. If you know what you are willing to say no to ahead of time, it’s easier to respond no in the moment rather than having to think about it or come up with an excuse.

Plan for the bad times

Develop a long term plan or least a 3- to 5-year plan, including a contingency plan. Set a date and time on your calendar and devote 1 to 2 hours to sitting down and talking with business partners, spouses, and family members to come up with long term goals AND how you are going to achieve them. Work with your lender or financial advisor to assess your current situation and come up with a plan for next year and the next 3 to 5 years. There WILL be years of low profitability in between high ones. Plan on a bad year AND how you will thrive through it.

Don’t forget a contingency or exit plan. Everyone has their limits, and you should know exactly where the line in the sand lies. Having a plan like this may seem depressing or self-depleting, but it is easier to have the conversation with your family before you are forced to walk away from the farm. Having an exit plan can also help save money. If you exit at the right time, you can still salvage some equity versus piling up debt and being left with very little to live on or feeling like you are trapped by debt and can never quit.

Utilize all your resources

Family, friends, employees, consultants, and advisors all have something to offer you and your farm. They know what they can offer better than you, so let them know what you need help with. If you have bills stacking up, talk to the vendors and your lender. Set up a plan to minimize falling further behind and, more importantly, a plan to get ahead.

Communicate with family

Among intergenerational farming families, the younger generation experiences more stress than the older generation. Feelings of powerlessness, financial strain, management disagreements, and in-laws can contribute to the generational divide (Fetsch, 2014). Have a sit-down meeting with all family members and discuss roles and responsibilities. Talk about the future and possible transitions. In this initial stage no final decisions have to be made, but allowing the younger generation to have a voice and feel heard can make them feel like a bigger contributor to the operation. Likewise, respect the older generation and the amount of time and resources they have invested in the farm. Good, open communication between family members can be the most important ingredient to success for the farm and family.

Source – Farms.com


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