BfrUncaatar Farming, Saturday, Aprl 11, 1998
Ag Women Learn How To Get The Most Out Of Life
LOU ANN GOOD
Lancaster Fanning Staff
STATE COLLEGE (Centre
Co.) Family relationships can
be the most rewarding and the
most Crustrating. Combine them
with operating the family Cum,
and die realities of human nature
often surface.
“The family farm should exist to
serve the family and not die other
way around,” said Ron Eberfaard,
motivational seminar leader and
humorist.
Eberfaard was one of the speak
ers at the day-long Women In
Agriculture Seminar sponsored by
Monsanto last week. Held at State
College, seminar topics dealt with
how to get the most out of life from
farm profits to family
relationships.
Eberhard poked fun at the
idiosyncracics of family relation
ships while giving rules to set up
the groundwork to keep the farm
and the family operating happily
together.
Eberhard’s research is drawn
'rom his work in helping6o2 fami
ies in 43 states and from his own
jxperienccs. After college be had
returned to the 210-acre family
r arm to farm in partnership without
i written agreement.
“I was fired by my own father,”
Sbcrhard said. Through the experi
ence Eberhard recognized the need
for better communication among
farm families and die need to put
;very verbal agreement in writing.
He heads Eberhard Planning Ser
vices to help other families work
ogether successfully.
He explained the dynamics that
rause frustration and tattered
relationships.
Ebcrhard tackles sticky family
xisiness problems with a list of
‘Ron’s Rules,” which include
tome of the following:
• Have a business plan.
• Limit farm ownership to fami
y members involved in the
Misiness.
• Always put a business plan
together as if the business was
going to end.
• Listen to what is being said and
to what is not being said.
• Best way to set up a business is
to plan as if you are working with
the enemy.
• Communicate goals to people
who can help achieve them.
• Primary reasons we need
agreements in writing is because
we are family.
• Whenever children are
involved in the family business,
the children should know the
Panel participants, from left, Melanie Rlchman, Rhonda Laudenslager, and Karen
Hawbaker talk about hewing on their dairy farms, which range from small to large in
Speakers at the Monsanto Women In Agriculture seminar Include, from left, Kay
Siussar, Brad Hllty, Ron Eberhard, and Dr. Jennifer Garrett. The aesslons focused on
how to get the most out of farm profits, time, and family relationships.
lish strategies that enable many of
them to improve the profitability,
liquidity, and solvency of the fami
ly business.
He has developed loan propos
als and obtained financing for
major dairy expansions and busi
ness restructuring for approxi
mately 60 farming businesses,
ranging from 200 to 500 cows.
Fluctuating milk prices and
drought and wet weather make it
difficult to establish financial
plans, but Hilty showed how
graphing milk prices and crop
yields over a 10-year period comes
out with a fairly consistent aver
age. Milk price trends from 1987
through 1997 showed an average
$l4 for both the first five years and
the latter five.
The ability to thrive and survive
is necessary despite dealing with
record grain prices but poor forage
quality, low milk prices, and
drought
Hilty said that changes in the
dairy industry has been brought
about from less government
involvement restructuring of the
milk pricing system and marketing
order, shift of production centers,
decreasing number erf farms, and a
change in philosophy.
Why do you need a dairy busi
ness plan?
“Dairying is a complex business
and a business plan will greatly
increase your chance of succeed
ing. It serves like a toad map for
the future and as a blueprint for
success. Mote and more lenders
ate requiring one,” Hilty said.
A business dairy plan should be
enacted prior to major changes,
such as an expansion, debt restruc
turing, adding a partner, shifting
details of the family estate.
• There is no independent finan
cial decision. Every decision
affects someone else.
• Nothing is so unequal as giving
equal treatment to unequal people.
• Most family businesses are
always cash short
• Life insurance is the best way
to transfer.
• How generous you are with
written plans should also depend
an who (spouses) your children
brought home.
In the afternoon session, Ebcr
iard used a series of quotes in a
tumorous and entertaining manner
to emphasize the importance of
good family relationships.
To improve communication.
Ebetfaard challenged the audience
o learn to change communication,
where too much emphasis is on the
T to commUcation, in which lis
tening to the other person is the
nost valuable tool in handling
problems.
Eberhard addressed the need to
earn to handle setbacks and disap
xrintmenls. He told of his family’s
struggle when a granddaughter
was bom with Down’s syndrome
md of their ultimate acceptance of
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it with joy.
“A single word that can make *ll
the difference is ‘faith.* God
ioesn’t give us faith in advance,”
Bberhard said.
Brad Hilty, owner and chief
xnsultant of PLS Agrimanagc
nent Associates, laid out the
groundwork to do a financial
analysis and to develop a strategic
business plan. During the after
noon session, Hilty also taught a
workshop on how farm software
and the Internet can save lime and
money.
Some of his advice included the
following: “Set up a plan from a
financial structure and from a fam
ily standpoint Team management
is important”
Hilty said that on the road where
he grew up, there were about SO
dairy farms. That number is now
reduced to two.
“We are at a crossroads in the
dairy business, not only due to
technology but also as a business,”
he said of the need to remain sol
vent “You must manage as a busi
ness, not as a family farm.”
Hilty has worked with mote
than 250 farm families to analyze
fanning businesses and to estab-
At 1
S *> V?
Homestead
NOTES
enterprises, or when exiting or
transferring the business.
Hilty said that a plan is ineffec
tive unless a strategy is developed
for implementing it
“Set up a monitoring system,’’
he said.
Identifying a mission statement
can be the most difficult part of
your plan, but it need not be. A
possible example could be to be a
leading producer of high quality
breeding stock.
Hilty said the plan should be
based upon a review of the past
five years’ records—not tax
records, but profit margins and
working capital compared to debt
ratio.
Certain mathmatical formulas
can be helpful when determining
efficency ratios of the business but
are not always the total picture. A
general rule of thumb is that 6S
percent or less of income should be
used for paying expenses before
salaries for yourself and other farm
workers are deducted.
In the pest, an acceptable debt
per cow was $2,000-52,500, and
that certainly allows a better
chance of financial survival, Hilty
said. But some cows provide much
more income through high produc
tion. A better formula would per
haps be I.S times cow producing
income. Some cows can cany as
high as a $5,000 debt load and still
be acceptable.
“Earnings on a cow before inter
est, taxes, and depreciation can be
an avenge of $4OO to $450 per
cow, but the actual goal should be
$750 to $l,OOO per cow,” Hilty
said.
To examine if you are over
mechanized. you need to look at
production costs per unit and labor
efficiencies. “Sometimes it it
financially better to replace
machinery rather than keep repair
ing it,” Hilty said.
“Poor forage quality and low
cow comfort can put you out of
business. There is no difference
between productive versus non
productive expenses,” Hilty said.
As a rule of thumb, each farm
worker should be able to generate
$250,000 for a $25,000 income.
Because the conference was
sponsored by Monsanto, the day
long event included a session by
Dr. Jennifer Garrett, technical ser
vices specialist for Monsanto, and
a panel discussion about the usage
of Posilac, a natural hormone used
to boost milk production. Panel
participants Rhonda Lau dens la
ger, Karen Hawbaker, Chambers
burg; and Melanie Richman of
New Jersey talked about their atti
tudes and experiences in using
Posilac. better known as bovine
somatotropin.
Several participants not using
Posilac and with no plans to do so
in the future said that they found
the session informative and
interesting.
Kay Slusser, who with her hus
band was a former Holstein breed
er and now head of Pennsylvania
DHIA, taught a session on time
management tips for farm wives,
which appeared in last week’s
issue of Lancaster Farming.