Welcome to the Bullvine Podcast, your no -nonsense
source for dairy strategies that actually work.
Today, we're tackling the question every dairy
producer should be asking, will your farm survive
2025? In this episode, we're breaking down the
make -or -break risks facing dairies next year,
from HPAI outbreaks that spread faster than gossip
at a county fair, to milk price swings that could
leave your margins thinner than a fresh heifer's
patience. You'll hear hard truths from Everett
Ag's Jim Matthews about why wait and see is the
riskiest strategy of all, and discover how top
producers are using robotics, forward contracts,
and yes, even solar panels to future -proof their
operations. If you're ready to stop reacting
to crises and start preventing them, let's dig
in. Alright, welcome back everyone. We're diving
into something pretty crucial today, something
we here at the Bullvine think needs a serious
look. Definitely. You've probably seen the headlines,
maybe felt the ground shifting a bit already.
2025's dairy crisis is coming. Will your farm
survive? Yeah. Pretty stark stuff. It is. And
that's the kind of question we need to grapple
with head on, wouldn't you say? Absolutely. And
look, for those of you tuning in and we know
you're knowledgeable dairy farmers. Industry
pros, let's be really clear, hoping for the best.
That's, well, it's just not going to cut it in
2025. Not even close. So we're diving deep today
into risk management, strategies that honestly
aren't just nice -to -haves anymore. They're
becoming absolute essentials for navigating what
looks like a potentially bumpy road ahead. Right.
We're not here for Dairy 101. No, no. We know
you know the basics. We're here for the practical
stuff, the nitty -gritty that impacts your daily
operations, and frankly, your long -term survival.
Exactly. Consider this a deep dive focused on
getting you prepared. Our mission today, really,
as we unpack all this information, is to pull
out those actionable insights, the things that
can make a real difference for your operation
come 2025. Yeah, maybe challenging some older
ways of thinking, too. Definitely ditching the
old playbook in some areas, getting laser -focused
on what keeps your farm not just, you know, afloat,
but actually thriving. And the pressures, well,
they seem to be coming from everywhere, don't
they? Our sources are painting a picture of some
serious headwinds for 2025. You're not wrong.
unpredictable milk prices, for one. Doing the
cha -cha as unpredictable as a fresh heifer,
right? Yeah, that's a good way to put it. And
then feed costs. Always hovering seemingly one
bad weather event away from spiking. One drought
away from chaos, basically. Exactly. Plus you've
got the ongoing threat of HPAI, labor shortages
that just don't seem to quit. Shifting consumer
demands, regulatory curveballs. It's a lot. It
really is. A confluence of pressures, you could
say. Like a perfect storm brewing. So the real
question isn't if things get tricky, but how
are you, listening right now, going to steer
your operation through it all? Right. So where
do we start? Maybe with the immediate dollars
and cents. Good call. Because managing the finances,
well, that's often where the immediate battles
are won or lost, isn't it? Absolutely. And our
sources are really hammering this home, just
wishing for better prices, hoping for the best.
It's not a strategy. It's like yelling at the
clouds, hoping it'll rain. Pretty much. And look
at the recent USDA forecast revision, the all
-milk price down to $21 .10 per hundredweight.
That's not exactly great news. No kidding. And
like you said, feed costs might look okay today,
but we're always on that edge. Always. The source
material puts it bluntly, one bad weather event
away from chaos. Imagine that drought hitting
the Corn Belt. Suddenly those feed bills look
terrifying. So the smart play isn't trying to
guess the market highs and lows. It's about building
a really solid financial safety net. And actually
using that net. Yes, exactly. And the first tool
in that financial toolkit, according to everything
we're seeing, has got to be the Dairy Margin
Coverage Program, DMC. The foundation, they call
it. For good reason. Think about it. It's triggered
payments in, what, 66 %? of months since 2018
two -thirds of the time that's a heck of a track
record for a relatively low cost tool it really
is it makes you wonder the article practically
challenges people asking why wouldn't you be
enrolled at the nine dollars and fifty cent tier
one level right it feels like basic financial
hygiene in this climate you're putting a floor
under your margin it's cheap insurance against
a major downturn to not use it seems like leaving
money on the table so Building on DMC, what's
next in the toolkit? Well, next up is Dairy Revenue
Protection, or DRP. Ah, yes. DRP. This one lets
you lock in a revenue floor based on expected
milk prices. And the key things there are flexibility
and the subsidy, right? Exactly. You can tailor
it to specific quarters, which is huge. And yes,
it's subsidized, which makes it more affordable.
The message seems to be, don't ignore this. Look
for opportunities to lock in that protection
when the market gives you a decent level. Definitely.
Don't just set it and forget it. Be active. Then
there's another layer for some folks, LGM dairy,
livestock gross margin. Right, LGM dairy. Who's
that really best suited for? Well, the sources
suggest it's particularly useful if your farm's
margins tend to track with things like Class
III futures, corn, and soy prices. Okay. You
can layer it with DMC. It basically protects
that gross margin, the difference between milk
revenue and feed costs. Another piece of the
puzzle. Gotcha. So moving from government programs
to more direct market tools. Forward contracts.
DFPP. If you're a handler, your co -op offers
them. You should probably take a serious look.
That's the advice. Use them for at least a portion
of your milk. It gives you some price certainty.
Yeah, it's not about hitting the absolute peak
price, is it? It's about managing risk. Taking
some volatility off the table. Precisely. And
then for the more, let's say, market -savvy operators.
Futures and options on the CME. Yep. Powerful
tools for hedging both milk and feed. But this
is a big margin call. Exactly. The sources rightly
caution about that. This isn't for everyone.
You need the expertise and the risk tolerance.
It's definitely an advanced strategy. But the
big picture here, financially speaking, is be
proactive. Don't wait. That's the quote, isn't
it? Don't wait for the perfect price. Lock in
protection when you can. Don't get caught waiting
for a peak that might never come or comes too
late. When you see a chance to protect your downside.
grab it. Makes sense. Okay, so finances are one
massive piece. What about securing the actual
production side, keeping cows healthy and milking?
Yeah, another critical area. And in 2025, like
you mentioned earlier, that conversation has
to start with biosecurity, especially with HPAI
still looming. It has to. And the sources really
push on this, asking how robust is your biosecurity
really? Are you just checking boxes or is it
deeply ingrained? That's the core question. It's
not about having a binder on the shelf. It's
about habits, protocols that actually work under
pressure. And they lay out some non -negotiables.
Like pasteurizing all milk and colostrum. No
exceptions. Strict quarantine for new animals.
Seems obvious, but... But are people really doing
it rigorously? And sanitizing equipment like
it's an operating room? Yeah, that comparison
hits home. Biosecurity is the operating room
for your farm's health. It's got to be as fundamental
as feed and water. Because a major outbreak doesn't
just hurt production temporarily, it can cripple
you financially. It's playing with fire to cut
corners here. Totally agree. Then there's the
climate piece. It's not going away. No. And the
challenge is, are you actively investing in heat
stress mitigation? Fans, sprinklers, shade? Or
are you just crossing your fingers for a cool
summer? Which, let's be honest, isn't much of
a plan anymore. Relying on Mother Nature's mood
swings is risky business these days. And it's
not just cow comfort, right? It's feed security,
too. Absolutely. Optimizing irrigation, planting
more drought -tolerant forages. Are you looking
at those things? These aren't just buzzwords.
They're becoming essential for ensuring you have
reliable, affordable feed when the weather gets
weird. And it leads to that tough question the
sources pose. Are you going to be caught flat
-footed by the next heat wave or disease outbreak?
Or will your herd keep ticking along while others
are scrambling? That resilience is a huge competitive
edge. Huge. Okay, let's pivot again. Operational
efficiency. Labor. Technology. Ah, yes. Labor.
The perennial challenge. And the sources don't
mince words here either. Are you still managing
labor like it's 1995? Ouch. But it's a fair question.
It is. Because that workforce isn't coming back
to how it was. And the folks who are working
have higher expectations. Things have fundamentally
shifted. And hoping it goes back... Probably
not happening. Which leads directly to automation.
It's not the future anymore, is it? It's the
present necessity for a lot of farms. Take robotic
milking. The potential labor reduction, 60 to
75 percent. That's massive. It's a game changer.
And the source compares investing in it to like
safeguarding your corn silage harvest. It's that
critical an investment potentially. That's a
strong comparison. And it's not just milking.
Automated feeding. Wearable sensors. Huge time
savers. Plus those sensors for early disease
detection. That allows your skilled people. To
focus on more strategic stuff, not just routine
tasks or spotting sick cows visually. Exactly.
Using their skills where they add the most value.
And let's talk precision feeding. The financial
impact there can be significant. Yeah. Are you
still eyeballing rations, as they put it? Or
using data? Because the difference, according
to the numbers, could be $1 .75 to $1 .50 per
hundredweight in saved production costs. Over
a year on a decent -sized herd, that adds up
fast. It absolutely does. The bottom line on
efficiency is simple. Every dollar saved on feed
or labor is a dollar you keep, especially when
milk prices are tight. Those efficiency gains
are your buffer during downturns. Critical stuff.
Okay, so we've covered finances, production security,
efficiency. What about the market itself? Adapting
to where things are headed. Crucial point. Are
you producing what the market actually wants
or just what you've always produced? Things like
milk components, sustainability proof points,
animal welfare. Those aren't just niche things
anymore. They're increasingly mainstream demands.
Which means you need to look hard at your marketing
strategy. Are you comparing your co -op deal
versus direct contracts? Really running the numbers,
not just sticking with what's familiar. Sometimes
comfortable isn't the most profitable. Good point.
And then there's diversification. On -farm processing,
maybe agritourism, beef on dairy, renewable energy.
Our sources frame these not as trends, but as
proven ways to spread risk and capture new income.
It's about not having all your eggs in the bulk
milk basket, building multiple revenue pillars.
Ultimately, it comes down to willingness to change,
doesn't it? Will you adapt or will the market
just leave you behind? That's the stark choice.
Standing still is often the biggest risk now.
So putting all these pieces together, finance,
production, efficiency, market adaptation, how
do you make it all work? Through an integrated
risk management plan. That's the key takeaway.
It's not about putting out fires reactively.
It's about proactive prevention, building resilience
everywhere. And the resilient dairies. They have
that diversified portfolio, a mix of financial
tools. Strong herd health and biosecurity going
beyond just HPAI. Investments in climate adaptation,
heat stress, water, forages. Relentless focus
on efficiency through automation, precision ag,
keeping good employees, adaptive marketing, focusing
on quality, maybe sustainability niches. Rigorous
financial planning budgets, scenario plans, cash
flow projections. And staying plugged in on policy
and regulations. Farm bill, FMMO, environmental
rules. You can't afford to ignore that stuff.
It directly impacts your business. It all leads
to that bullvine bottom line section in the source
material, which is pretty blunt. Very blunt.
It says many dairies might not survive the decade.
Not because of bad farming, but because of poor
risk management. Sobering. But it also paints
a picture of the farms that will thrive. Yeah,
the vigilant ones. Adaptable. Always improving.
Data -driven. Tech -savvy. Financially disciplined.
Honest about weaknesses and actually doing something
about them. Proactive. It's a high bar, but it's
achievable. And the call to action is crystal
clear. Don't wait for a crisis. Exactly. Schedule
that risk management audit. Talk to your team,
your advisors, ever. Ag gets mentioned as a resource
there. Find your vulnerabilities, make a plan,
and then act on it. Don't just make the plan
and put it on the shelf. Right. Action is key.
And it leaves everyone listening with that direct
challenge. What action will you take today to
secure your dairy's future tomorrow? Powerful
question. So just to recap those key takeaways
quickly. Layer Financial Protection's DMC DRP
forwards. Don't rely on just one. Automate or
stagnate robotics. Sensors are vital now. Secure
feed strategically lock in 60 -70 % when prices
dip. Biosecurity equals profitability. Take HPAI
protocols dead seriously. And milk components
matter. Chase those butterfat and protein premiums.
Yeah. And the executive summary just reinforces
all that. Unprecedented volatility in 2025. Need
for these strategies. Data over tradition. It
even quotes Jim Matthews from Ever .ag, emphasizing
decisive action, tech adoption, strategic contracts
over just doing things the old way. So wrapping
this deep dive up, the message couldn't be clearer,
could it? Not really. Proactive, integrated risk
management. That's the key differentiator for
success in 2025. It's not optional anymore. We
really hope you listening will take some time.
Reflect on these points. Where are your biggest
vulnerabilities? What's one thing you can start
tackling right now? Yeah, use this as a starting
point. Talk to your advisors. Dig deeper. Start
building or refining that resilience plan for
what's coming. And building on that bullvine
bottom line thought, maybe the final question
to leave you with is this. Five years from now,
looking back at 2025, what story will your farm
tell? Will it be a story of resilience and success
or a cautionary tale? Something to think about.
Thanks for taking this deep dive with us today.
Thanks for joining us on the Bullvine Podcast.
If this episode lit a fire under your risk management
plans, and we hope it did, head to thebullvine
.com for links to all the programs and tools
we discussed. Before you go... Hit subscribe
so you don't miss our next deep dive on turning
2025's challenges into opportunities. Until then,
remember what separates the survivors from the
statistics. The best time to fix the barn roof
is while the sun's still shining. From everyone
here at The Bullvine, remember to keep your margins
wide and your bulk tank full.