Refine your budget midway through the year. Then compare your actual income and expenses to your budget. And hedge milk where you can. It s part of the budgeting process. You can lock in a gross margin that s your milk price minus variable costs by signing annual contracts on feed like producers do out West, forward contracting with your milk cooperative or handler and your feed company, and then hedging milk and feed prices through a broker.
Strategy is important.
Bailey advises locking in a position based on your monthly estimated cost of production, taking a position when prices sink, and hedging when prices look good. Few sales tactics can equal the impact of a personal visit to a produce buyer. This first step in developing a personal relationship with the buyer can help build a profitable business relationship for both the grower and buyer. Take advantage of opportunities to personally meet potential buyers. A product sample delivered to the buyer in person can open a door for sales.