Lancaster farming. (Lancaster, Pa., etc.) 1955-current, February 05, 2000, Image 20

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    **-*.*******>-,'.*, Mercer County
Judy spends time halter breaking “Promise," one of
40 Scottish Highlands that the Ligos have “mostly for
(Continued from Page A 1)
farmer can do,” said Ligo.
“When prices turn down, it’s the
time to take stock in your in
your business and really stand
by your suppliers.”
“Low prices can open up opportunities tor
farmers who stay positive,” said Ligo. He
pointed out the lower priced cattle and equip
ment that can be purchased during low price
periods. Dairy facilities come up for sale.
Good heifers become available.
The Ligos are helping a younger couple get
started on a neighboring dairy farm. “If milk
was expensive, that farm wouldn’t be avail
able,” said Ligo.
The Ligos farm more than 1,000 acres in
Mercer and Venago counties. They raise all of
their own replacements, and they feed a TMR
formulated for 75 pounds of milk. They use
home-grown forages and high moisture corn,
purchasing commodity mixes and custom
mixed minerals.
Since purchasing the original 460-acre
farm in 1988 and building a double-10 milk
ing parlor and 212 : stall freestall barn in 1990,
the Ligos have purchased several more farms.
“We’re having a good time dairy farming,”
said Ligo. “Cash flow has not always been
good, but our profitability has been excel
According to Ligo, there are several ele
ments in a business that lead to profitability.
“Dairying requires a lot of capital, labor, and
management, plus it’s risky,” said Ligo.
“Therefore there’s profitability there. If it
were easy and fun, then everyone would do
For Ligo, profitability is extremely import
ant. “It allows you to keep your word,” said
Ligo. “It allows you to be responsible to your
self, your employees, and your suppliers. It’s
the lifeblood of your business.”
When producing a commodity, Ligo claims
it’s essential to be a low cost producer. “Ev
eryone gets the same price for their milk,”
said Ligo. “The only handle you have is to
drive your cost of production down.”
Ligo recommends that farmers look at their
top live expenditures and analyze them
closely. He cautions against spending time
analyzing expenditures that don’t affect the
bottom line.
“For example, we buy any semen we want
regardless of what it cost because it is not
going to benefit the business to cut semen
costs in half,” said Ligo. “On the other hand,
if we can cut the feed bill by five percent, it
would save me thousands of dollars.”
He also encourages farmers to make sure
that a short cash flow doesn’t interfere with
profitability. “Don’t end up doing something
costly because you have a cash flow prob
lems,” said Ligo. “If you can save a thousand
dollars buying seed in February, perhaps you
should borrow money to buy it. But don’t buy
soybeans in bags just because you can’t afford
a truckload.”
For Ligo, a very important point in profita
bility is maximizing his most limited resource.
“Some people don’t have enough land, but
they think they need to grow oats on it when
they should only be growing forages,” said
“You h ive to identify your
limiting resource and maximize
it,” said Ligo. “It’s different for
every farmer.”
For example, if a farmer’s
barn is full, then their limiting
resource is the number of the
cows they have. According to
Ligo, the best things that farmer
can do is maximize production
per cow. If a farmer has limited
capital, he shouldn’t waste it
purchasing expensive equip
ment. Ligo suggests investing in
livestock instead.
Inside the milking parlor, John reviews the daily milking sheet. The herd aver
ages 75 pounds of milk daily and 200 days in milk. The Ligos don’t breed any
cows back until they’re 180 days in milk to prevent excess stress and increased
cull incidences in the herd.
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To maintain a steady cash
flow during the ups and downs
of milk prices, Ligo prepares an
annual budget so he will know
what his expenses will be each
year. Then, each month when he
pays his bills, he projects his an
ticipated cash flow over the next
Positive Abo
several months.
“Profitability is the lifeblood,
but business lives and dies by
cash flow,” said Ligo. “If you
can’t cash flow, you’re done.”
“Projecting my cash flow
helps me decide whether I have
enough money to invest in any