I'm often asked what traits make for an above-average dairy farm manager.  Based on my experience in following the industry, I believe it comes down to the following three elements.

1. Strong production management skills. Organizations with strong production managers typically earn higher profits. Why? Makeup. The strong production manager is passionate about performance and consistent with the details. The passionate producer pays attention to cow comfort and care at a level above most managers. The detail-oriented production manager is rewarded for keeping even the small details consistent. Along with all of this, the strong production manager is able to transfer both his passion and attention to detail to his employees through coaching and mentoring.


2. Strong risk management skills. Farming is always in the business of risk, from growing conditions to interest rates  and everything in between. The strong manager is aware of the risks that affect his operation and has put a plan in place to manage them. The key areas that I typically find in a strong risk management plan include:
   a. Crop and feed risk - Besides including the typical growing condition risk management plans, this area also should include storage loss risk, contamination risk and price risk on purchased feeds.
   b. Livestock management risk - This should include protocols for handling all areas of animal management, including animal treatment. This area also includes the management of purchased animals and offsite growing operations. 
   c. Workforce risk -  This should include strong communications and a training plan to ensure compliance with all protocols and safety requirements. 
   d. Succession management - Remember, ownership may be a birthright, but management is not. Who is the next foreman in your operation? Have you trained him to be ready to take over when needed? Make sure you have depth of management in key positions to ensure ongoing operations. 
   e. Environmental risks - Besides the usual permit compliance items and nutrient management rules, a strong manager considers the environmental impact of daily operations and protocols. For example, what steps are you taking in your operation to manage your water resource? 
   f. Commodity price risk - What tools are you using to manage your margin? Notice I said "margin."  The best risk managers know the formula for their operation to lock in consistent profits year in and year out. They are educated on price risk tools and work well with their advisers to make sure they have a consistent presence in this arena.
   g. Financial risk - Besides managing your investments and borrowing to maintain a strong working capital position and balance sheet, this should include your own internal methods for managing the earnings statement, cost controls and interest rate risk.


3. The best managers are proactive, not reactive. I call it managing by design rather than by crisis. These managers handle the "what ifs" better than others because they have a plan to deal with contingencies.
   
   Additionally, as noted by my colleague Bradley Guse, a BMO Harris Bank agricultural banking officer,  proactive managers are the ones exploring new opportunities and technological advances before others. "While they are generally more innovative than others," he says, "they are measured in their adaptation, weighing every decision with sound metrics and a solid handle on the what ifs."  Read the full article here.