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#1 | |||
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Shameless Self Promotion of My Economic Plight
Here is an article featuring my father and myself talking about the rough times we're having as dairy farmers. Thought some of you all may find it semi-interesting.
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#2 |
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Coordinator
Join Date: Mar 2002
Location: Dayton, OH
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It was very interesting. Hang in there, hopefully things will turn around soon.
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My listening habits |
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#3 |
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Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Sounds rough. Are people pursuing different ways to potentially cut costs, things like grouping together to negotiate prices on supplies and then on milk sold out?
I'm no expert so I'm not sure what else can be done, but are things like that even considered, or is it more "every farmer for themself?" I know you've talked about selling some milk locally to artisinal cheese-makers, hopefully that brings in a little cash. I wonder what else you could do (*wracking my brain*).
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Get bent whoever hacked my pw and changed my signature. |
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#4 | ||
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
That's been done for years through cooperatives. Our fuel is bought through a cooperative, for example. The problem is cooperatives can be just as shady as any other company, especially the large ones. Milk pricing is largely set on the Chicago Mercantile Exchange which can be subject to manipulation. Problem is there is no transparency in that regard. There are companies out there that are having a field day with these low prices *cough*Kraft*cough* and have the capability to manipulate things further. Quote:
Honestly, there isn't anything that can be done at this point but to wait. We're in a good position because we've got plenty of land to leverage. Our banker has dozens of clients and he recently informed us that he had to pick out three farms that he would absolutely see through this situation and we are among those three. So we aren't even close to throwing in the towel. As much as it is hurting right now, the industry will be better off in the long run. Lessons have been learned. This was something that needed to happen, but it doesn't make it any easier while dealing with it. On the bright side, this is a perfect buy low opportunity for myself personally. My dad's retirement isn't going to the the dairy farm itself but all the land that he owns. So we're currently looking at having me buy out the dairy farm (the cows and equipment not the land) at a very discounted rate. Assuming things will turn around eventually, the value will rise. It's like buying a stock at it's lowest point, but the main difference is we know that the value will come back at some point. And I have complete control of my investment. |
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#5 |
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General Manager
Join Date: Aug 2001
Location: Kansas City, MO
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I sympathize with what you're dealing with. I do some contracting work for the USDA, so I'm aware of the situation. I saw a pretty good piece on CBS Evening News the other day about this very topic. No real good way to deal with it right now. Best of luck in holding on.
Both of my grandfathers lost their mid-Missouri farms during the 1980s when farming took a turn for the worst. It was a lot of fun when I was a kid to hang out on the farm. I know how much it killed them emotionally to lose their farms and something they had done for their whole life. Last edited by Mizzou B-ball fan : 08-05-2009 at 12:54 PM. |
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#6 |
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Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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i assumed it had been done via cooperative for most of the stuff, was just wondering if there were additional opportunities to buy things through more local cooperatives (feed, etc) that one could possibly look at in the "every penny helps" mindset.
good to hear that you all have plenty of land and will make it through, but it's got to be...scary/depressing.
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Get bent whoever hacked my pw and changed my signature. |
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#7 |
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Hall Of Famer
Join Date: Dec 2003
Location: the yo'
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The same type of stuff is really effecting the farmers in my county as well. Hopefully the market will equalize soon.
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#8 |
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Head Coach
Join Date: Oct 2000
Location: Green Bay, WI
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I've been trying to make sure the milk I buy is from local Wisconsin dairies. I dunno how much that helps when it's from one guy living on his own, but, it's what I can do.
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#9 | |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
Buying feed is probably the biggest challenge right now. We and most others in Wisconsin grow our own alfalfa and corn. The problem for us right now is that we got our corn crop flooded last year and ran short. So we are buying corn from another farmer (not a dairy farmer, a cash crop farmer). This year is much better crop wise, as we've currently got a 500 day supply of alfalfa that we made ourselves and the corn crop is looking tremendous so long as a hail storm doesn't come along and wipe it out. Supplements to the feed we put up are a tremendous cost right now. Supplements we use, for example are cotton seed, fish meal, and soy hulls. Some people are trying to cut corners in these areas to save money. Some feed mills have simply cut off the supply to some farmers. The big problem with cutting out the supplemental parts of the diet is that you can't simply turn the switch on and off. These are living, breathing animals we are talking about and cutting corners will simply shoot yourself in the foot in the long run. We've taken the stance that we need to continue feeding our animals as we always would. If we cut out some of the supplemental parts of the diet, we'd be losing production now and it would take at least another year and maybe two years to get that back. We want to be positioned well enough that when things turn around we are going full steam. Also when you look at cutting corners in taking care of the animals you are playing with fire when it comes to animal welfare issues. Hoof care of the cow is another area where people are cutting corners and they are paying dearly for it. That's probably a big area where animal welfare is concerned. Not only will you have big losses in production for not maintaining a cow's feet, I think it's just plain old cruel to have your cows hobbling around with sore feet. This is just a hard industry to cut costs in because you are essentially shooting yourself in the foot if you do. Labor is another area people think you could cut costs. But if I'm stuck doing the work of somebody else, I'll start neglecting other areas. Damned if you do, damned if you don't. |
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#10 |
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Pro Starter
Join Date: Jul 2001
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was an article in the Arizona Republic about this and local dairy men the other day too here.
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#11 | |
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Head Coach
Join Date: Oct 2000
Location: Green Bay, WI
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Quote:
What's the name of your dairy, lungs? |
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#12 |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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#13 |
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Head Coach
Join Date: Oct 2000
Location: Green Bay, WI
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#14 | |
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Hall Of Famer
Join Date: Jun 2006
Location: Chicago, IL
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Quote:
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#15 |
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College Starter
Join Date: Oct 2000
Location: Berkeley
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I grew up on a farm and my family went through something similar with pigs in the late 90's. It got to be a vertical industry dominated by factory farms owned by the food companies that could manipulate the market to the point where it was impossible for a family farm to survive. I know at one point it cost more to raise a pig then the pig was worth in the end which sounds similar to where milk is now.
My family eventually sold off all their livestock and now get by just on crop farming. |
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#16 | |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
If you eat swiss cheese there is a good chance you've probably consumed something from my farm. We sell our milk to the largest swiss cheese maker in the United States who in turn sells the cheese to others that repackage it under a different name. It's pretty hard to tell where and under what name my raw product ends up in the consumer's hands. |
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#17 | |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
I remember that. That was brutal too. |
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#18 |
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Hall Of Famer
Join Date: Jun 2006
Location: Chicago, IL
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Quick question for you.
Have you ever considered packaging and selling your products direct to consumers? I'd imagine there is some way you can ship products like that without them spoiling (I've ordered meat and even live lobsters). A simple website and the marketing appeal of buying authentic Wisconsin cheese without the corporate crap and processing. Show on the site your farm, how you treat your animals, and how you do things the right way. There is a huge, growing market for organic and small farm products out there. I think there has to be some appeal for people to be able to buy some good cheese from an old fashioned Wisconsin farmer. Just a thought. |
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#19 | |
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Head Coach
Join Date: Oct 2000
Location: Green Bay, WI
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Every once in a while. Usually when I go to Subway. |
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#20 | |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
The thought has entered my mind at times. It'd be a lot more complicated than simply throwing together some products and starting to sell it. The product that leaves my farm is raw, as in unpasteurized and unhomogenized. Unfit for mass human consumption essentially. It'd take a large investment in equipment and buildings to create any capacity worth doing as anything other than a hobby. For the amount of milk we put out a day (4000 gallons), we'd still end up selling most of it to a traditional processor. Here is an example of a farm in Wisconsin that has gone that route and they farm in a similar way to me (about double the size of me though). They do a damn good job at farming but I've heard rumblings that the cheese business has been a financial burden on them. |
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#21 |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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#22 |
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Head Coach
Join Date: Oct 2000
Location: Green Bay, WI
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Cool!
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#23 | |
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Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Quote:
even as someone in the financial markets i agree. the commodities plays are really out of control and ridiculous
__________________
Get bent whoever hacked my pw and changed my signature. |
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#24 |
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Hall Of Famer
Join Date: Dec 2003
Location: the yo'
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Start an ice cream company!
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#25 | |
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Pro Rookie
Join Date: Nov 2005
Location: Tennessee
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Quote:
Actually one could argue the average hard working person is enjoying the lower price of milk. I don't really follow milk prices, so I don't know if the low price is reflected at stores. Anyway, I hope things work out for you Lungs. If I were in your shoes, I would probably not look to buy a milk farm when it is an industry that requires subsidizing to get by. But if it is what you love to do, I hope you suceed in the long run. |
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#26 |
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College Prospect
Join Date: Oct 2001
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When banks can get a trillion in funny money whenever they cry to the Fed how do you think the average hard working American can compete with a commodity exchange game? They blew the price of oil up to near 150 a barrel and then down to under 40 in a span of a year, something that makes absolutely zero economic sense under any scenario other than a lot of fund money being shoved around one way or another.
I don't buy the Walmart style "well everyone else is paying a lower price" argument either. Once you collapse a market that is always to some degree on the margin, the big winners know they can pump up the price again later with reduced competition. Hell, this all probably coincides with the big boys wanting to cut labor left and right anyway... so why not engineer a price collapse, ride out the bad times, and then enter into a market cleared of a bunch of small timers when times are good (and naturally the prices spike back up). Sometimes I think the commodity exchanges are actually introducing an inefficiency in our economy, the whole point of the exchange is to more rapidly distribute these goods in a generic manner, but when you have people selling at a price that does not make sense at all for them (i.e. below cost) there is something horribly wrong. Even if everyone else is doing it.... everyone can be wrong sometimes. |
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#27 | ||
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
Nope. It went up in the store when the price was high, but never goes down to reflect the record low prices. Quote:
Subsidies are kind of a myth. Crops are where the subsidies are at, not milk. The subsidies we received this year did not even cover one month of production. Larger farmers it probably covered a few days worth. Smaller farmers, yes, it does stretch longer. I'll agree I'm not in favor of subsidies but I'm damn well going to take them when they are available. But they are a drop in the bucket in the grand scheme of things. If we were subsidized so heavily, you wouldn't see prices lower than they were in 1978 in 2009. I'm not only buying the business because I love what I do, but I also do see a good opportunity. I have direct control of my investment (the cows). Sure, I'll have to ride out some roller coaster price swings. But in terms of value, I'm going to be buying at about the lowest point imaginable. So in essence you are basically saying that nobody should really invest in agriculture because it is subsidized? If you love imported oil, you are going to love imported food. |
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#28 |
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Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Lungs - wouldn't worry about Gram. Not sure why he decided to come in here and be a jerk.
__________________
Get bent whoever hacked my pw and changed my signature. |
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#29 |
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lolzcat
Join Date: Oct 2000
Location: sans pants
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How is he being a jerk? Those were all things I was thinking as I was reading this thread. I doubt lungs wants a big pity party.
__________________
Superman was flying around and saw Wonder Woman getting a tan in the nude on her balcony. Superman said I going to hit that real fast. So he flys down toward Wonder Woman to hit it and their is a loud scream. The Invincible Man scream what just hit me in the ass!!!!! I do shit, I take pictures, I write about it: chrisshue.com |
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#30 | |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
I didn't take it as him being a jerk at all. He doesn't view it as being a sound investment, and I disagree mostly. I do agree it'd be a horrible investment for somebody that didn't know what the hell they are doing. But in my case, I've got the background and the knowledge that I'm pretty damn confident that I can make it work, and make it work well. |
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#31 | |
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Grizzled Veteran
Join Date: Oct 2000
Location: Wisconsin
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Quote:
C'mon.. they are cows. Feed them and pull on their nipples once and awhile. Can't be that hard. ![]()
__________________
You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its... |
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#32 |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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#33 |
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lolzcat
Join Date: Oct 2000
Location: sans pants
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What kind of alternate streams of revenue do you guys have? Or is it all dairy production?
__________________
Superman was flying around and saw Wonder Woman getting a tan in the nude on her balcony. Superman said I going to hit that real fast. So he flys down toward Wonder Woman to hit it and their is a loud scream. The Invincible Man scream what just hit me in the ass!!!!! I do shit, I take pictures, I write about it: chrisshue.com |
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#34 | |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
We sell male calves, but they go for like $35 a piece. We sell the used up cows for slaughter. If we have a good year for crops we'll sell some excess there. We used to sell growth hormone under the table to people that signed affidavits saying they would'nt use it ![]() All those things don't add up to all that much compared to the milk production. |
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#35 |
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lolzcat
Join Date: Oct 2000
Location: sans pants
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Have you ever thought of selling milk, cheese, etc. under your own banner?
__________________
Superman was flying around and saw Wonder Woman getting a tan in the nude on her balcony. Superman said I going to hit that real fast. So he flys down toward Wonder Woman to hit it and their is a loud scream. The Invincible Man scream what just hit me in the ass!!!!! I do shit, I take pictures, I write about it: chrisshue.com |
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#36 | |
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Grizzled Veteran
Join Date: Oct 2000
Location: Wisconsin
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Quote:
I'd imagine his start up costs to do that would be enormous.
__________________
You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its... |
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#37 |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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+1 I stated earlier in the thread that I know of a pretty large farm (about double the size of my own) that went into this and they allegedly barely break even marketing their own cheese. Consider the startup costs, the marketing costs (competing with larger companies that pay for shelf space in stores). That and I've got my hands full taking care of 800 cows and 8 full time employees. If I did choose to enter such a venture in the future it would have to basically be run by somebody else that knows what the hell they are doing. |
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#38 | |
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General Manager
Join Date: Nov 2002
Location: The Town of Flower Mound
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Quote:
Post #20, senor...
__________________
UTEP Miners!!! I solemnly swear to never cheer for TO |
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#39 | |
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Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Quote:
idk - characterization rescinded. probably was just in a snarky mood when i read it
__________________
Get bent whoever hacked my pw and changed my signature. |
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#40 |
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Coordinator
Join Date: Oct 2000
Location: Concord, MA/UMass
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I recently read The Informant by Kurt Eichenwald iirc. All about how Archer Daniels Midland (and others) were manipulating prices left and right across everything going to farms.
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#41 |
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Hall Of Famer
Join Date: Dec 2003
Location: the yo'
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I think buying right now is definitely a good move. If your dad was to sell the farm to you in the future, you'd probably end up paying a much higher price. Or if he was to pass on, and left it to you in his will you'd be paying out the ass in taxes.
Now you can basically buy at the lowest valuation possible, it basically can't go much to any lower. It seems to be a tremendous move on your part, and you're definitely seizing an opportunity. |
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#42 | |
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Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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Quote:
Archer Daniels Midland - Price Fixer to the world
__________________
Get bent whoever hacked my pw and changed my signature. |
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#43 |
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n00b
Join Date: Jan 2009
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I blame all the granolas who decided to start sipping soy milk lattes over the last 15 years.
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#44 |
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Hall Of Famer
Join Date: Jun 2006
Location: Chicago, IL
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#45 | |
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lolzcat
Join Date: Oct 2000
Location: sans pants
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Quote:
8th Continent Light Vanilla soy milk is better than any milk I have ever tasted.
__________________
Superman was flying around and saw Wonder Woman getting a tan in the nude on her balcony. Superman said I going to hit that real fast. So he flys down toward Wonder Woman to hit it and their is a loud scream. The Invincible Man scream what just hit me in the ass!!!!! I do shit, I take pictures, I write about it: chrisshue.com |
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#46 |
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Coordinator
Join Date: Oct 2000
Location: Concord, MA/UMass
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Why do people buy organic foods? Tastes worse, more expensive and usually no healthier.
Last edited by BishopMVP : 08-06-2009 at 03:18 PM. |
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#47 | |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Quote:
One time I went into a convenience store and picked up a bottle of chocolate milk and went out to my car pulled off the cap and took a sip and literally gagged and spit it out. I thought it was rancid and then I took the time to look at the bottle and saw that it was soy milk. Definitely didn't trip my taste buds, but hey, to each their own. |
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#48 |
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Pro Rookie
Join Date: May 2002
Location: Prairie du Sac, WI
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Dola
For those trying brainstorm other revenue streams for myself, I've pretty much got one in mind but it's going to take several years to get to the point where I can get it going. What is it? Cows! Right now we only sell the old and used up cows for slaughter but what I'm thinking here is selling cows at the beginning of their productive life. The problem right now is that I have some issues to clean up with my own cows so that eventually I can have a surplus to sell. And I'm developing a type of cow that isn't necessarily marketed very heavily right now. Most dairy cows are the black and white variety (Holstein). These produce the most milk in terms of volume. The problem with them is that they are also the largest and they eat the most. The Holstein population is inbred to the point where every single Holstein mating is like breeding first cousins. With that you have a whole plethora of problems associated to the health of the animal. What I've been doing for the past six years is introducing different bloodlines from all over the world into my herd. A lot of the so-called experts called me a young hotshot idiot that would absolutely ruin my nice herd of inbred Holsteins in the long run. These experts are more concerned with how pretty a cow is than how profitable she is. Six years later I'm feeling more than vindicated. Instead of having these 16-1800 pound monsters that milk themselves to death in three years, I've got smaller (12-1400 lbs.), healthier animals that produce the same amount of milk in terms of cheese yield as these big old inbred oxen Holstein. The biggest problem with marketing this is the wrong perception throughout the industry that these animals are inferior. Fortunately, I've got the data to back up my claims and more people are becoming receptive to the idea of a population that isn't so damn inbred. So, I think I'm ahead of the eight ball in this regard, I just need to create a surplus of animals to create this revenue stream. |
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#49 |
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College Prospect
Join Date: Oct 2001
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Like I said before, just because everyone does it, don't make it right. You seem to have an idea that makes common sense to me, hopefully you can turn it into a competitive advantage. I think innovation is a money maker, but you do need some luck (like not having your farm killed by moronic market manipulation by some monopoly driven megacorporation).
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#50 |
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Hall Of Famer
Join Date: Oct 2002
Location: Massachusetts
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i remember something like maybe you alluded to that in your FTB or something lungs. Sounds cool!
__________________
Get bent whoever hacked my pw and changed my signature. |
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