A business that never takes a day off
A dairy milks cows on a schedule that does not move for holidays, price drops or mechanical trouble. The herd must be fed, housed, milked and cared for every day, and the largest costs, including feed, labor, energy and veterinary care, recur whether or not the milk check that month is a good one.
The milk price is set by market conditions the producer does not control. When prices fall, costs do not follow them down on the same timeline. The dairies of the southern and northern Central Valley, the Inland Empire and the North Coast all operate with this same exposure, even though herd sizes and operations differ across those regions.
The cost lines that matter most
Feed
Feed is typically the biggest single expense, and purchases can be timed around crop availability and delivery. Buying ahead can lower the cost per ton but requires cash up front and storage space.
Equipment
Milking parlors, cooling tanks, pumps, feed mixers and manure handling systems are expensive to buy and expensive to repair. A cooling tank that fails can put an entire day's milk at risk.
Labor
Milking crews are paid on a regular cycle. Overtime and seasonal help add to the payroll in busy periods.
Price swing, illustrated
For illustration only, and not our terms: an operation budgets for a certain milk price for the next quarter. If the price comes in lower than expected while the feed bill holds steady, the monthly margin shrinks. The owner can respond by drawing down savings, delaying a repair, or arranging short-term working capital to keep feed and payroll current until prices recover.
The danger in delaying a repair is that a small failure becomes a large one. A worn pump belt is cheap. A burned-out motor in the middle of milking is not.
What dairy owners finance
- Replacement or upgrade of milking and cooling equipment.
- Feed purchases made ahead of a price rise or a supply tightening.
- Seasonal labor during busy periods.
- Repairs to barns, fencing, lagoons and feed lanes.
- Trucks, loaders and tractors needed for daily work.
The application
You complete a five-minute application and provide about three months of business bank statements. We use a soft credit pull, require no tax returns, and consider FICO 500 and above. Funding ranges from $25,000 to $5,000,000, with funds possible in as little as 24 hours. Sole proprietors can apply, including family-run operations filing as one. Start your application.