Security, Growth, Pooling and Overhead Costs
By Brad Rach
In the last issue of our magazine, President Olson wrote about our tremendous growth that has taken place under some of the most challenging times your organization has ever endured. This growth has made our dairy program stronger and more efficient in many ways:
• Growth builds market security. The more milk we sell, the more buyers we have. More buyers means that we are less dependent on any one of them if they should have a production or a financial problem.
• Growth builds hauling efficiencies. The more farmers and buyers we have, the more options we have for putting together efficient hauling routes.
• Growth builds market access. The more milk we handle, the more potential new buyers will consider us as suppliers.
• Growth makes us more competitive. As our program grows in volume, we can better afford the technology, specialized staff, and other assets it takes to fully participate in today’s sophisticated milk markets.
• Growth spreads overhead costs. The old accounting principle that “volume fixes a lot of problems” applies to our dairy program. The more farmers we have, and the more milk we sell, the less overhead we need to assess any one of those farmers or hundredweights.
• Growth leads to pooling opportunities. The more volume we have, the more we can use Federal Milk Marketing Orders in ways that benefit our member farmers.
• Growth helps us get through tough times. For example, when we have surplus milk, we want as many options as possible for finding a home for that milk on short notice.
None of these advantages would be possible without the wonderful members and staff who have worked so hard to grow our business. I hope you are as proud as I am of what we are all doing to make our dairy program stronger by the day.