Cash Flow Analysis

The Next Step in Dairy Production Medicine

Abstract

Veterinarians marketing dairy production medicine strive to offer programs that represent an investment in their producers' financial future. Programs based on nutritional consultation, milking equipment evaluation, and records analysis share a goal of improving cow performance.

A major component of these consulting programs involves recommending how our clients spend their money. Veterinarians with a primary interest in nutrition and herd averages propose feed changes; those having a primary interest in milking systems propose equipment updates, etc. Recognizing that most diary producers operate with limited capital resources, establishing spending priorities may be the greatest benefit of a complete production medicine program.

Spending priorities can't be established without the assistance of some financial analysis. Partial budgets may have some benefit in projecting the impact of future interventions, but cash flow analyses are more useful for measuring the true results of our intervention. After several years of producing cash flow analyses for dairy producers, a simplified system has been established that will allow all interested production medicine practitioners to include this service in their consulting programs.