MarginSmart - Version 6.0 -Dairy Industry Comprehensive Price Risk Management Tool

MARGINSMART^® is completely customized to YOUR dairy!  No “one size fits all” or need to use “industry averages” if you don’t want to.  At MARGINSMART^® we know that every dairy farm has its own set of circumstances and to provide truly accurate information for the price risk management decisions for YOUR dairy, we incorporated many features which customize the results to your situation.  And if you have more than one dairy operation, we have made it extremely easy to switch between farms to see each one in its own customized view.  MARGINSMART^® also allows multiple users for each farm and allows the dairy owner to manage permissions as to what each user can access and see, for more info click here.

MARGINSMART^® allows you to enter all the crucial information related to your dairy, and then has a direct download feature whereby it continually updates commodity market prices (Class III Milk on the CME and corn, soybeans and soybean meal on the CBOT), to generate real-time projections of your milk margin and net income for up to 24 months.  It has exclusive features which help you be assured that this is the most comprehensive, realistic projection available so that you can feel confident that you have all of the proper information to make price risk management decisions.

MARGINSMART^® is available for use by dairies of any size.  MARGINSMART^® is also available in three different license levels so that each dairy producer can decide which features are most important for their specific dairy, for more info click here.

Ingredients-  Allows you to enter every feed ingredient that you feed on your dairy.  Includes the ability to include unit of measure, cost, dry matter percentage, shrink percentage, whether the ingredient is grown or not (and whether you want to value these grown feeds at cost or market) and whether the item is equivalent to corn, soybeans or soybean meal                                                 

Rations-  Allows you to enter every ration that you feed to any cattle on your farm, along with the ability to designate it as a lactating, non-lactating (dry cow) or youngstock ration.  Once your feed ingredients are set up entering your rations is very quick and easy.  There are some exclusive features that allow you to enter information by pounds or percentage and to ensure that all ingredients are properly accounted for in the ration.

Cows-  Allows you to identify the number of cattle being fed each ration.  This also allows you to enter the pounds of milk production per cow (either on a ration by ration basis or overall average for the herd).  We know that time is valuable so if you want to duplicate the same information for any number of future months MARGINSMART^® allows that to happen in literally seconds to save you time.

Grown Feed- Allows you to enter any ingredients that you grow on your dairy to feed to your cattle.  These are entered in the expectation of feed usage.  You also can enter your exact cost, an estimated cost or choose to value these at a market price.       

Market-  Exclusive feature allows you to enter the exact basis for milk, corn, soybeans and soybean meal for your farm.  Basis is the difference between the commodity prices on the Chicago Mercantile Exchange or the Chicago Board of Trade and the actual prices you receive for milk or pay for corn, soybeans and soybean meal.  This is important because ultimately you cannot feed “paper contracts” to your dairy herd as everything has to flow through the physical commodities.  For milk, basis is the difference between your “Mailbox Price” and the announced Class III price, so this includes plant differentials and other premiums and discounts specific to your  dairy.  MARGINSMART^® realizes that the overall basis level of these commodities is EXTREMELY important to customizing the results specifically to your dairy.  MARGINSMART^® can help guide you in determining the basis for your farm.

Commitments- This area is broken out into two areas: Futures Contracts and Physical Contracts.  The Futures Contract area allows you to enter extensive information related to any futures contract related to Class III milk, corn, soybeans or soybean meal and includes information to close those contracts out and include any related gains or losses in your overall margin calculations.  The Physical Contract area allows you to enter extensive information related to any contract you have to buy or sell milk or any feed ingredient.

Reports & Charts

Projected Milk Production and Value Report– On a monthly basis this report shows a summary (by lactating ration) of the number of cows, milk production per cow, overall cwts. of milk produced; as well as your current projected blended milk price based on hedges, contracts and current CME Class III Milk Futures prices.  Lastly it shows your overall projected milk revenue.

Projected Feed Ingredient Usage– On a monthly basis this report shows the number of head eating every ration, average as fed pounds of every ration and the projected total tons of every feed ingredient which will be fed to all cattle in your herd.

Overall Summary Report– Your “One Stop” for a quick overall summary of your milk margin and a few other important pieces of info.  This report shows overall number of milk cows, projected milk production and feed usage of corn, soybeans and soybean meal equivalents, along with the percentage of the price risk covered for each of these.   Most importantly it displays the milk margin – both in total dollars and per cwt.  Finally you can choose to display the milk margin in a comprehensive format, which includes all outstanding contracts, futures positions and grown feed at their respective prices and costs (and the balance which are unpriced at current market), or in a 100% market format which will convert all milk, corn, soybeans and soybean meal equivalent ingredients to the then current CME and CBOT prices.

Financial Charts Report-  This shows two line graphs.  The first one identifies the overall comprehensive milk price and feed costs on a per cwt. basis in a clear, easy-to-read format.   The second one identifies your comprehensive milk margin on a per cwt. basis.  You can also very easily adjust the number of months on the chart to virtually any number.

Margin History Chart-  This chart shows the history of your actual comprehensive milk margin over any number of days that you select.  It will show the high, low and last for each day so that you can very easily see what has been happening to your margins over time.

Includes everything in the basic level PLUS the following

Other Income and Expenses-  Allows dairy producers to account for all other income and expenses (or cash inflows and outflows) for their operation to arrive at a net income before tax (or net cash flow before tax).  MARGINSMART^® allows each user to customize this area for their own operation and allows them to identify and use the specific income and expense (or cash inflow and outflow) items that relate to their operation.  For complete flexibility you can input these items either on a per cwt. basis or in total dollars, each on a monthly basis.

Reports & Charts

Includes everything in the basic level PLUS the following

Additional Overall Summary Report Info-  This report will also include the overall net other income and expenses (or net cash flows) and shows your net income before tax (or cash flow before tax) on a monthly basis in both total dollars and on a per cwt. basis.
Open Price Risk Position Report– This report shows a summary of your overall price risk position for milk, corn, soybeans and soybean meal.  It takes into account milk production or feed usage and all priced contracts, futures positions and grown feed (whether utilized by the dairy or sold).  It identifies for each month your net long and net short positions, and more importantly, the net position that is either unpriced or the volume that is priced more than you have price risk on (overpriced).

Additional Financial Charts Report Info-  This report will also show your net income before tax (or net cash flow before tax) on a per cwt. basis with a line graph, which is also easily adjustable to show the number of months you desire to see.

Price Risk Charts Report-  This chart shows the percentage of milk and corn that you have your price risk covered.  You can also very easily adjust the number of months on the chart to see specific months.

• Additional Margin History Chart-  Added to this chart will be the history of your expected net income before tax over any number of days that you select.  It will show the high, low and last for each day so that you can very easily see what has been happening to your net income before tax over time.

Includes everything in the basic and premium levels PLUS the following

Exclusive Target and Texting features- MARGINSMART^® provides customers with great access to information; especially since we also know that they have farming and other things going on and can’t always be “in front of a computer or tablet”.  Therefore, we put the SMART in MARGINSMART^® so it watches things for you.

The Exclusive Target Feature- Allows a user to set a target for any electronically traded Class III Milk, corn, soybean or soybean meal commodity contract on either the CME or CBOT.  The program has a complete Target tab where the user simply enters the commodity, the month and the percentage of either milk produced or grain or meal needed and MARGINSMART^® does the rest.  It will send you a text alert when the commodity hits your desired target, along with the volume of the commodity based on the percentage that you desired.  Want to enter multiple targets for the same commodity for the same month at different price levels – no problem – MARGINSMART^® will also calculate the cumulative average price and volume information for all targets.

The Target Feature- Also allows the user to set targets for milk margin.  In the same manner as above the user can identify the month, year, percentage and type of target that they want to hit.  MARGINSMART^® constantly updates all information, including the CME and CBOT market prices to constantly determine your farm’s metrics.  When a target is hit, MARGINSMART^® sends you a text so that you can take the appropriate action under your plan.  Under both of these exclusive features MARGINSMART^® watches things for you 24/7/365!

Text on Demand-  MARGINSMART^® also realizes that you may want to know what your margins may be at any time, whether a target is met or not, even when you don’t have direct internet access or the time to connect.  Therefore it offers several easy to text requests whereby you text MARGINSMART^® a simple message and it immediately sends your real time margin or net income information to you.  This is invaluable for you to keep up with your operation.

Daily Automatic Texts-  Lastly MARGINSMART^® also knows that dairy farming is very busy.  So, we have built in automatic texts that are sent to customers every morning and afternoon which give you real time margin and net income information to keep you apprised of your operation twice a day.  And, if you have multiple farms, you will have each of the above features for each of your farms with a designation that identifies each farm so you can keep everything identified.

MARGINSMART^® realizes that you may have a variety of needs for individuals that may need access to your price risk management and profitability data.  We designed MARGINSMART^® to meet these various needs.  Do you have a nutritionist that you would like to enter your feed ingredient and ration info?  Do you have a financial analyst that you would like to share certain info with?  Do you have an employee that you would like to enter farm data, but you don’t want them to see your farm’s overall financial results?  If you answered “Yes” to any of these, MARGINSMART^® has you covered and allows you to designate a user at one of the following four levels:

Basic-  Generally can only see and enter basic information, but cannot see financial results.  Has access to the Ingredients, Rations, Cows, Grown Feed and Market tabs.  This would be utilized if you have an employee that you would like to enter the vast majority of your data, but you do not want them to actually see any reports or enter anything that is specifically related to financial metrics.

Nutritionist-  This access is very similar to the basic and also has access to the Ingredients, Rations, Cows, Grown Feed and Market tabs.  However, in addition, this access allows the user to also see the “Projected Feed Ingredient Usage Report”.

Analyst-  Allows the user to be able to see and enter information in any area of the program.  The limitation here is on the overall reports that the user is able to see.   Only the “Projected Milk Production and Value”, “Open Price Risk Position” and the “Projected Feed Ingredient Usage” reports can be viewed by an individual with this access.

Manager-  Has complete access to all data and all reports. Keep in mind that you can apply any level to any individual that you choose.  For example if you want to give “Manager” access to someone who does not manage your farm – that is OK, or if you want to give “Nutritionist” access to someone other than your nutritionist – that is also OK.

The ability to allow multiple users in your program at the same time makes communications much easier when 2 or more people are not physically in the same place.  Each user that has access can be viewing the same information about your dairy while you communicate by phone or any other media.  This is great for discussions with nutritionists or other consultants.