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Honored Advisor

Changing gears

We just got,word that our farm will be going through a total depopulation of pigs in a few weeks, for the first time in over seventeen years. Not good financially in the short run, but for healthier herd status on the other end, probably worth it in the longer view.

In years past, such news would have thrown me into a panic. Minimum guaranteed payments for a couple of months, on the tailend of several months of not- so- great pigs and short numbers, is like adding insult to injury.
Of course you do not learn such things until AFTER making several expensive commitments, or discovering several expensive
needs that cannot be avoided. New roof on store this week, bought cabinet for kitchen remodel - cannot be delayed due to structural issues- later in the fall. At least we did a very pricey round of repairs last year, so they are behind us and managed through the cash flow already.

Much as I hate any business slowdown, we have survived them before, and will encounter them again. This is the first one since we
hired outside the family, though. I have expressed to Mike and the kids that we will be making all efforts to keep the hired man busy with farm maintenance like painting, so his salary is still justifiable. I could never in good conscience lay him off.
The timing may actually not be such a bad coincidence, since the grand baby is due early December, and we will be gearing down
for eight weeks, sitting empty a week then gearing back up again for eight more, starting in late September. All told, this will make it much easier for Mike to cover our daughter's duties in her late pregnancy and the first few months after the baby's arrival.
Would never have planned it this way, am not happy about taking such a heavy hit in the pocketbook, but have decided to view it as a sort of cosmic aligning of our planets, meant to be. Of all the pitfalls we've dealt with on farming, none has been a fatal outcome. Worrying about what would happen was always far worse than what actually occurred. We have so far landed on our feet.

I guess I can see this as sort of like going through a construction zone on the road of life...slows down your forward progress, but not a firey crash, so survivable. So, I have shifted gears out of overdrive and into second for now. As long as we can avoid reverse, I can manage...I have just refused to take money from other places to support the farm.

When you get bad business news, how does it hit you? Have you learned to cope better with time, or does it upset you more, as
you factor in years to retirement and lost opportunities?
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16 Replies
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Senior Contributor

Re: Changing gears

Even if you're prepared financially, like you are, it is still a shock to the system. Plans have to be changed, but as you've found out, it may have been a blessing in disguise.

I've gone through rougher patches before and gotten through them. Just hoping that the next one comes later than sooner. It takes a while for the pocketbook to bounce back, at least for us.

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Honored Advisor

Re: Changing gears

Probably part of this disappointment is twofold:
First, this farm has done so well historically, compared to others in the same production niche. I credit Mike and our daughter for sticking to a pace that most people would not be able to maintain. It was why we brought on the outside the family hired man about five years back...it was that or slack off, and slacking off would have cost us way more than he does.
Second, when you reach fifty, there is the issue that you can remember how much you paid for things like your first home. Comparatively, the shortfall here this year would pay for that 2-3 times over. Of course, we still own that home, and it's worth six times what we paid for it now, so the loss in " real" dollars is not as great. When you put into perspective the problems that we have dodged over nearly two dcades here, plus the ones we have dealt with and kept going strong, it is overall a positive path.

I know it's going to bother me a lot to watch bank balances in the business accounts decline. As long as our savings remain intact - even if they don't get to grow this year- I will just have deal with it.
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Senior Contributor

Re: Changing gears

Why keep the same inventory levels when your bank account is reducing? These are the times to at least use that bank account in the pantry.You also shouldn't have to buy as much hog building parts when they are empty either unless you decide to use the downtime to do a major project. At least the company gave you plenty of notice of the depop, so you'll be ready. 

Just remember the depop isn't your fault. Someone else in the system didn't do as good of a job as you did.

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Senior Contributor

Re: Changing gears

I'm thinking "VACATION"Smiley Very Happy!     Since we've never been out of hogs and can see the light at the end of the tunnel.  Less electricity,   for pumping water,  and ventilation fans.    Shouldn't have any problems being ready for hurricane season with no reason not to have the storage pumped down.    Just imagine what you won't have to do it the power goes out.  

 

One thing I'm seeing in the empty farrowing so far  is FLIES!   I walked in last week and had to go grab fly spray.   I found several used cans  so I emptied several.   They aren't "common house flies"  rather what I was told are  "false flies"  slightly smaller than house flies.    Easy to kill with spray  but I need to make a Farm and Fleet run. 

 

With our weather, that has switched to very hot and dry  we have to worry whether there will be good crop.    So I start thinking of how to use the money we have now.   Do I make extra principal payments or hold on to it in funds held so that I can make next years payments?   But,  I'm still planning on that new carpet for the bedroom/s.   That is sitting in the savings account if I need it. 

Do we deferr more income since it looks like next year won't be as good?   It is July and I'm already thinking  income taxes. 

They say.  "No one ever went broke paying income taxes"   But,   I don't want to  be the first to find out. 

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Honored Advisor

Re: Changing gears

No, actually, we haven't got firm notice of the dates, and minds change from day to day. It may start in two months, or who knows when from that point. It is not good put someone into such a shortfall with less than sixty days' warning...when it is this much money, on top of a lousy past four months or so.. It is like digging a hole inside a hole...but, this is this business.

We did scads of expensive repairs last year...age does catCh up with hog building,s just as it does with hog farmers. Mike keeps things up and running routinely, so there is only so much to contemplate doing on the facilities and infrastructure.

If I had all the money that we've been cost for someone else's mistakes over the years, we would be sitting on a major fortune. This Isn't an inventory or other normal sort of business management issue. Our only breaks in costs will be less electricity, and that isn't so bad fall into winter time of year. That savings is nothing, compared to what we will lose in performance pay.
I just plan to hold our own and hope the bank accounts don't dwindle too drastically. we can go a fair amount of time without income, and still make our obligations. It just irks me that I have such indefinite information to work with...I am not comfortable in the dark.

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Senior Contributor

Re: Changing gears

I thought you were going to plan a nice long vacation? We had to depopulate once when DH was still working off the farm. This heat is going to put many people into a crisis. Thousands of turkeys were killed by the heat and humidity last week here. This will really hurt some farms as they are paid by the pound of meat produced in relationship to the feed used. It was 100 degrees today with a heat index of 110.

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Honored Advisor

Re: Changing gears

No, actually, we haven't got firm notice of the dates, and minds change from day to day. It may start in two months, or who knows when from that point. It is not good put someone into such a shortfall with less than sixty days' warning...when it is this much money, on top of a lousy past four months or so.. It is like digging a hole inside a hole...but, this is this business.

We did scads of expensive repairs last year...age does catchup with hog buildings, just as it does with hog farmers. Mike keeps
things up and running routinely, so there is only so much to contemplate doing on the facilities and infrastructure

If I had all the money that we've been cost for someone else's mistakes over the years, we would be sitting on a major fortune.
This Isn't an inventory or other normal sort of business management issue. Our only breaks in costs will be less electricity, and that isn't so bad fall into winter time of year. That savings is nothing, compared to what we will lose in performance pay.




I just plan to hold our own and hope the bank accounts don't dwindle too drastically. we can go a fair amount of time without income, and still make our obligations. It just irks me that I have such indefinite information to work with...I am not comfortable in the dark.

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Re: Changing gears

Vacarion was about my third thought. We will actually be emptying out for wight weeks, empty taotally for one, then repopulating odor eight more...takes that long for 3600 sows to fill our farm.

Depending upon when that week falls, which looks like early December for the one totally empty week...that is daughter's due date. You KNOW I will not be going too far, with first grand baby due! The rest of the seventeen week shift we will have pigzs, just not a set of full buildings to attend. So, a break, but not really a break, you se?

Like you, I just need good info to plan my moves. We have a pending application for NRCS costshare on a mortality composter, which will be pricey, whichever way we choose to go. That is a permitting parameter, so I am moving proactively, since we hear the company is phasing out its rendering route fhrough here. Cannot wait to the last minute to prepare to replace it.

I have concluded that the structural repairs to the kitcheN are necessary, and mus go forward, regardless. It would take until cold weather again to safelyopen up exterior walls, floors and foundation..and this surely cannot wait a year. The one cosmetic item - also functional- is the new cabinet I bought thE day before we got this news...typical.

$400 is nowhere near a make or break figure to delay this work. The $4000 for the store roof was also neCessary expense, to
stabilize that building, and prevent greater damage. Again, not a highly significant fIgure in the overall scheme of things arOund here. It all adds up, but I know wheN to pull the plug on or scale back, even on essentials.

Hope you guys get rain in time, and please pray that I will have 14,000 healtzhy weaners here ASAP! Thanks for the encouragement.

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Honored Advisor

Re: Changing gears

The one week we expect to be totally empty is also daughter's due date for first grandbaby. Not goin anywhere then!
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