Riding the Highs & Lows of Milk Prices Doug & Linda Hodorff - - PDF document

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Riding the Highs & Lows of Milk Prices Doug & Linda Hodorff - - PDF document

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12/12/2016 Riding the Highs & Lows of Milk Prices Doug & Linda Hodorff Hodorff Enterprises Our Mission ssion: A team am with th a passi sion on for fami mily y and dairy iry, respe pecting ting people ople, comm mmunity

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SLIDE 1

12/12/2016 1

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • f Milk Prices

Doug & Linda Hodorff Hodorff Enterprises

Our Mission ssion: A team am with th a passi sion

  • n for fami

mily y and dairy iry, respe pecting ting people

  • ple, comm

mmunity unity and enviro ironm nmen ent. t. Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Hodorff Enterprises Overview

  • 1. Second Look Holsteins, LLC
  • 1080 cow dairy including dry cows
  • 3X- No BST
  • Goal of 6# of Combined Fat & Protein (CFP)
  • Partnership
  • Doug & Linda Hodorff
  • Corey & Tammy Hodorff
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SLIDE 2

12/12/2016 2

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Hodorff Enterprises Overview

  • 1. Second Look Holsteins, LLC
  • 1080 cow dairy including dry cows
  • 3X- No BST
  • Goal of 6# of Combined Fat & Protein (CFP)
  • Partnership
  • Doug & Linda Hodorff
  • Corey & Tammy Hodorff

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Hodorff Enterprises Overview

  • 2. Broken Bow, LLC
  • 950 cow dairy including dry cows
  • 3X- No BST
  • Goal of 6# of Combined Fat & Protein (CFP)
  • Partnership
  • Doug & Linda Hodorff
  • Jacob Stern
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SLIDE 3

12/12/2016 3

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Hodorff Enterprises Overview

  • 2. Broken Bow, LLC
  • 950 cow dairy including dry cows
  • 3X- No BST
  • Goal of 6# of Combined Fat & Protein (CFP)
  • Partnership
  • Doug & Linda Hodorff
  • Jacob Stern

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Evolution of Hodorff Enterprises

Our Mantra: Progressive Growth

1992 1996 1999 2016 180 Cows 2 Locations Modernized:

  • 400 cows
  • Free stall facility
  • Milking Parlor

2010 575 cows Broken Bow Dairy in Nebraska Established Nebraska Heifer Facility Established 2000 2nd Look Partnership Established – 700 cows 2009 2nd Look- 900 cows 2nd Look- 1080 cows Broken Bow 950 cows

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SLIDE 4

12/12/2016 4

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Evolution of Hodorff Enterprises

Our Mantra: Progressive Growth

1992 1996 1999 2016 180 Cows 2 Locations Modernized:

  • 400 cows
  • Free stall facility
  • Milking Parlor

2010 575 cows Broken Bow Dairy in Nebraska Established Nebraska Heifer Facility Established 2000 2nd Look Partnership Established – 700 cows 2009 2nd Look- 900 cows 2nd Look- 1080 cows Broken Bow 950 cows

Great Years

1994-95 2001-02 2013-14

  • High corn prices
  • Expansion learning

curve

  • Financially Tough
  • Low Milk Prices

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • 2009:
  • 2nd Look Holsteins: Good equity position
  • Broken Bow Starting Up: Low equity position
  • Good equity position of 2nd Look Holsteins

helped support Broken Bow

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SLIDE 5

12/12/2016 5

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • 2009:
  • Bleeding Red Ink
  • Never sacrificed the cow comfort,

management and nutrition of the cows

  • Compensation adjustment based on job

description – separate out management responsibilities and pay accordingly

  • Banker relationship is critical
  • Should help you get through tough times if you

are set up right

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • August 2009:
  • All Hands on Deck
  • Empowered all employees:
  • Suggestions to save 3%
  • Everything was on the table
  • In the end, we saved more than 3%
  • We were still losing money….just not as much
  • Employees felt part of the solution
  • Regularly visit this exercise with employees
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SLIDE 6

12/12/2016 6

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • 2009 - 2016:
  • Milk Marketing:
  • If You are All In: “Need Nerves of Steel”
  • Our philosophy has evolved over the last 7-8 years
  • You can’t make money at milk marketing
  • You can manage risk
  • We still participate but at a much lower level

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • 2009 - 2016:
  • Enterprise Accounting:
  • Allows you to know your Cost of Production
  • 1. Second Look Holsteins
  • 2. Broken Bow Dairy
  • 3. Peniel Acres
  • Tracks cropping costs
  • Sells feed to the dairies
  • 4. Nebraska Heifer Farm
  • Understand heifer rearing costs better
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SLIDE 7

12/12/2016 7

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • 2009 - 2016:
  • Financial Peer Group:
  • Not just a dairy group
  • Different agricultural businesses:
  • Hog producers; Crop farmers, etc.
  • Different states represented
  • Highly valuable

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Riding the Highs & Lows

  • 2009 - 2016:
  • Continuing Education:
  • TEPAP- The Executive Program for

Agriculture Producers

  • Not just for young people
  • Many great programs out there to take

advantage of

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SLIDE 8

12/12/2016 8

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

What Have We Learned

  • Best cost feeding philosophy
  • Solid equity position gives you flexibility
  • Be your own contractor with simple and basic construction
  • Know your cost of production
  • Empower employees for their insight and suggestions
  • Compliance – Compliance – Compliance
  • Communication is key

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Looking to the Future

  • Try to stay 5-8 years ahead of the curve
  • Transition plan:
  • Management responsibilities are pretty well transitioned
  • Other son, Clint came back in 2016 to manage the cropping

enterprise

  • Transitioning the equity needs to be figured out
  • Paradoxically, if you are debt free, your business is likely not

modernized enough to be saleable

  • Stay on top of technologies- Genomics, Herd Performance

Software, Precision farming, Business Strategies, etc. etc.

  • Peer groups and continuing education
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SLIDE 9

12/12/2016 9

Today’s Actions • Tomorrow’s Results

December 7 & 8 | Dairy Summit 2016 | Kalamazoo, MI

Our Mission ssion: A team am with th a passi ssion

  • n for

famil mily y and dairy iry, respe pecting ting people

  • ple,

comm mmunity unity and enviro ironm nment. ent.

Hodorff Enterprises