Buckeye Dairy News: Volume 1 Issue 5

  1. Constructing New Buildings On the Farm

    Joe Beiler 
    Extension Agent, Mercer Co.

    There are three basic methods for construction on farms: 
    (1) Perform all construction with farm labor, 
    (2) Act as a general contractor and hire sub-contractors, or 
    (3) Hire a general contractor to construct the building.

    Good planning helps in choosing a construction method. The following are reasons for considering different options in choosing a building method:

    • Cost savings,
    • Time frame for construction completion (ask the contractor when he can complete the project not when he can start the project).
    • The quality of building layout and construction, which will depend on what method is selected, and,
    • The operation of the dairy during construction.

    The best construction method will be different for each dairy operation. The best one is the one that best fits your operation, resulting in a successful completion of the building project. Insurance must be considered when choosing a construction method. Who will insure farm labor, sub-contractors, and general contractors? Who will provide building construction insurance, and worker's comp?

    There are several questions that you must consider before choosing a construction method. If you consider building by yourself, do you have the necessary time? Who will manage current operations? Will there be losses in production during construction? Where will the additional labor come from (farm labor vs. hired labor)? Will the labor be proficient at construction work? 
    Do you have access to all the equipment required for construction? Do you have sufficient expertise in building construction and layout?

    If you consider acting as a general contractor, are your plans specific enough to tell sub-contractors what is needed? Are the interior details already decided on? Are the sub-contractors all bidding on the same things? Will contracts be used, and if so, who will write the contracts? How will the sub-contractors be chosen (lowest bid, qualifications, reputation, friends)? Who will do the scheduling and coordination of the sub-contractors? Who will settle arguments for the sub-contractors? 
    Are all sub-contractors insured and what are they insured for? Are you responsible for workers on your property?

    If you are thinking of hiring a general contractor, how will you choose the contractor (bids, qualifications, reputation or ability to get the job 
    done)? Does he have the equipment required to do the construction? Do all general contractors have appropriate insurance coverage for buildings and workers? Who will write up the contracts for the construction project? Planning the building must be done before construction begins.

    Remember, additional planning is required to bring the building into production: buying additional animals, additional management concerns of new animals and possibly other construction or expansion required in other buildings on the farm.

    Benefits 
    Building With Farm Labor

    • Cost savings
    • Control over the construction

    Drawbacks 
    Building With Farm Labor

    • Time frame
    • Labor input
    • Expertise in construction and layout

    Benefits 
    Acting As The General Contractor

    • Cost savings over hiring a general contractor
    • Better time frame for construction completion
    • Expertise in building details
    • Less labor input from the farm

    Drawbacks 
    Acting As The General Contractor

    • Coordinating sub-contractors
    • Settling disputes between contractors
    • Less control over construction details

    Benefits 
    Hiring A General Contractor

    • No labor input from the farm
    • Set time line for completion
    • Expertise in building construction & layout

    Drawbacks 
    Hiring A General Contractor

    • Cost
    • Less control over construction
  2. Milk Price Outlook

    Gary Schnitkey 
    Dairy Farm Management Specialist 
     

    • The February 1998 Basic Formula Price (BFP) is $13.32 per cwt., up $.07 from the January 1998 BFP. This BFP will place average pay prices for Ohio milk producers in the $14 to $15 per cwt. range BFPs for the last three months have been above $13.00 per cwt., well above the average $11.90 BFP for the last ten years.
    • The March BFP will likely fall, possibly more than $.50 per cwt. Indicators of a price decline include March futures contracts trading in the mid $12 range. In addition, cheese prices in late February began to decline.
    • After March, the BFP likely will continue to fall through the summer. Expect the BFP during summer to be around $12.00 per cwt.