DAIRY RECORDS AND MODELS FOR ECONOMIC AND FINANCIAL-PLANNING

Managers are challenged to translate farm goals into specific strategi es within organizational areas such as production and finance. To the extent that the goals include profitability, economic criteria should be used to determine the strategies. The economic criteria should be e valuated with data that are specific to the individual farm rather tha n assuming average relationships between production practices and prof itability, which may or may not be relevant in specific economic situa tions with constraints. Farm data from production and financial record s can be used to analyze past performance, and then these data can be integrated with decision models to yield predictions about future perf ormance that are critical for cash, credit, and financial planning. In formation gathered regularly on current milk production, stage of lact ation, age, reproductive status, health, feeding practices, performanc e, costs, and market prices, including forecasts, can be continuously included for management monitoring and control. Economic analysis incl udes opportunity costs and risk assessment. An example of a current op erational system is given that analyzes past performance but also uses simulation and optimization models to forecast and analyze alternativ es. Optimization, although never perfect, is considered to be a valuab le part of the system to generate alternative strategies to reach farm goals and to make the system more than merely descriptive.