We are finally making money on our 150-cow dairy farm. My son and I farm 325 tillable acres in central Wisconsin, and since June, our milk checks are finally in the black. However, we have some bills to catch up on. We owe the vet $1,200. We owe the feed mill about $7,000. We owe the John Deere dealer $8,000 for parts.

We’re staying current with each of them since July, and we’re paying down some on the amount we are behind on each month, but I’m wondering if we should take out a loan at the bank to pay these off? I was afraid to ask for a loan at the bank last spring because I figured we would be turned down like many of our neighbors were. We got behind because we didn’t borrow money to plant our crops last spring. We sold some extra hay in April and got behind with our bills. Please advise.

Doug Hodorff: You are making progress on paying down your amounts owed. Not sure if taking out a loan would be your best practice. You are only $16,000 behind and making progress. One option might be to pay off all your outstanding debt and then pay part of your current bills. Another option might be to sell off some milk cows to pay off part of these creditors. Yes, you may drop in daily milk flow, but you would relieve yourself of debt currently. This could create the desire to build your numbers from within more real. 

Sam Miller: Fortunately, higher milk prices are here and allowing you to stay current and begin to catch up on past due accounts. It likely makes sense to apply for a loan to clean up short-term debt and consolidate it with a repayment plan. Start by putting together a budget analyzing expected income and expenses. You will want to repay this short-term loan as quickly as possible but remain current with your normal bills.

Depending on your financial position, you may or may not get a loan to pay past due bills. The better prepared you are with a plan, the greater likelihood of getting the loan. If you do not gain approval, work with your vendors on a plan to pay off the past due amounts. Good luck with your plan.

Katie Wantoch: “Integrity is telling myself the truth. And honesty is telling the truth to other people,” quoted writer Spencer Johnson. Please know that you and your son are not alone in this predicament. Many farmers have struggled with staying current with their bills due to cash-flow issues. I would suggest starting a conversation with your banker sooner rather than later. Your lender should be treated as a partner in your farm business. He or she should be that person you can rely on to provide you with an honest opinion about how things are going financially in the agriculture industry and with your farm business.

Conversations may be tough to have if you have gotten behind on bills, but I would encourage you to communicate openly about your situation. Be proactive! Reach out to the lender before you receive a request to update financial statements and must report your past due balances. Your lender should be able to provide you with some guidance and thoughts on the next steps to take for your farm business. 

Short on hay

We milk 100 cows on our 200-acre dairy farm in northeast Wisconsin. We have plenty of corn silage and haylage to feed our herd through May, but we are short on baled hay. We usually bale part of our first-crop hay or our second-crop hay, but we never had three days without rain until the second week of July this year, so we chopped it all and put it in the silo. We put up a few loads of baled hay in early August. Should we try to find some hay locally, or should we buy a semitruckload from out West? We only need to feed a couple of pounds per cow per day in our total mixed ration, but we do need some dry hay. What are your thoughts?

Doug Hodorff: You said you do need some baled hay. Why? Are your forages too high in moisture, or are you looking for better particle results from the ration? Your nutritionist should help you with this decision. From your information, you have plenty of forages, so this would tell me you should use your forages on hand before spending more money on purchased forages. You have harvested your forages in the best way given the weather and timing of rains. It has been a challenging year. Cows can convert your forages to milk given the correct diet.

Sam Miller: This was a difficult year for crops across the country, and you have plenty of company with feed challenges. Because the growing conditions, harvesting conditions and winterkill issues were so widespread in northeast and central Wisconsin, you will likely have a difficult time finding local baled hay. Start with your nutritionist. He or she may have an idea if local hay is available or contacts for Western hay markets. The University of Wisconsin Extension Forage Team also has information and publishes a Hay Market Report to give you an idea of prices at different quality levels. Good luck with your search.

Katie Wantoch: Regardless of where you live in Wisconsin, 2019 will be recorded by farmers as a year of challenging weather conditions throughout the growing season. Planning for your shortage of hay supply now will help you to divert a disaster this winter and in early spring. I fear that many people will be on the hunt for hay to feed their cattle, horses, etc.

First, I would suggest that you identify how much inventory you currently have and how much will be consumed until your next crop is made. Then you will have an accurate record on the amount you are needing to purchase.

Second, complete an analysis of your existing forage inventory. Farmers are discovering that poor-quality haylage and corn silage made this summer means they will need to purchase feed additives to add to their rations and maintain their herd’s milk production levels. Work with a dairy nutritionist to identify the relative feed value for the hay you will need to purchase.

Finally, you should review your farm budget to determine the amount you can spend on hay purchases. Purchasing hay locally reduces trucking costs, but you may be limited on finding the quantity or quality you need. Evaluate your options and decide which option will be the best result for your herd.

Agrivision panel: Doug Hodorff, Fond du Lac County, Wis., dairy farmer; Sam Miller, managing director, group head of agricultural banking, BMO Harris Bank; and Katie Wantoch, Dunn County, Wis., Extension agriculture agent specializing in economic development. If you have questions you would like the panel to answer, send them to: Wisconsin Agriculturist, P.O. Box 236, Brandon, WI 53919; or email [email protected].