A Broad Overview of How to Manage a Dairy Business
Welcome to Introduction to Dairy Business Management, the third course in the Dairy Leaders of Tomorrow curriculum. This lesson provides a broad overview of how to manage a dairy business. By the end of this course, students will be able to perform a SWOT analysis, understand the factors that influence a farm’s profitability, and properly write a business plan.
Curriculum Objectives
LESSON 1: What financial information is needed to successfully manage a dairy business?
At the conclusion of the lesson, the student will be able to:
- Define “asset” and “liability” with 100% accuracy.
- Explain the meaning of “current,” “intermediate,” and “long term” assets and liabilities with 100% accuracy.
- Recall the formula for “equity” and “net worth” with 100% accuracy.
LESSON 2: What are the business structures available to Dairy Farms?
At the conclusion of the lesson, the student will be able to:
- Explain the 4 most common legal business structures relevant to dairy farms with 100% accuracy.
- Describe the structures available within a Sole Proprietorship, Partnership, LLC, and Corporation with 100% accuracy.
- Justify a legal structure for a given scenario to teacher satisfaction.
LESSON 3: How can I Interpret Dairy Financial records?
At the conclusion of the lesson, the student will be able to:
- Identify a balance sheet and income statement with 100% accuracy.
- Calculate equity and net income from sample financial records with 100% accuracy.
LESSON 4: What Other Factors affect Dairy Farm Profitability?
At the conclusion of the lesson, the student will be able to:
- Calculate depreciation for 3, 5, and 10 year increments with 100% accuracy.
- Calculate add-on, remaining balance and amortized interest to teacher satisfaction.
- Recall the formula for calculating the milk margin (or Income over Feed Cost) with 100% accuracy.
LESSON 5: What are the Areas of Financial Risk on a Dairy Farm?
At the conclusion of the lesson, the student will be able to:
- Discuss the milk and commodity pricing system within the United States to teacher satisfaction.
- Describe the impact of commodity price volatility to teacher satisfaction.
- Describe the impact of crop failure on a dairy farm to teacher satisfaction.
LESSON 6: What Risk Management Tools are Available to Dairy Farm Managers?
At the conclusion of the lesson, the student will be able to:
- Discuss the process of milk and commodity forward contracting to teacher satisfaction.
- Describe two other risk management tools available to dairy farmers to teacher satisfaction.
- Explain the procedure to obtain crop insurance with 100% accuracy.
LESSON 7: How is a Business Plan Created?
At the conclusion of the lesson, the student will be able to:
- Define SWOT with 100% accuracy.
- Complete a SWOT analysis from a case study to teacher satisfaction.
- List 5 required sections of a dairy business plan with 100% accuracy.
- Complete a sample executive summary for a business plan to teacher satisfaction.
LESSON 8: What is my Ideal Dairy Business?
At the conclusion of the lesson, the student will be able to:
- Complete a sample business plan containing an executive summary, the organization of the business, marketing strategy, and relevant financial documents to teacher satisfaction.