Introduction - Cash Flow Crunch

By Gigi DiGiacomo

Edited by Kristine Moncada, Nicole Tautges and Craig Sheaffer

Organic dairy cows

Nate and Angie Walter began transitioning their 240-acre farm and 100-cow milking herd to organic management two years ago. The Walters grazed their animals outside year-round and raised an additional two-thirds of needed supplemental feed. However, during the third and final year of the transition period, organic feed prices skyrocketed. The Walters’ calculations showed that feed costs would soon exceed revenues, and cash flow into the farm would be negative.

The Walters needed to decide whether to reduce their herd size or give up on organic certification altogether. What would you do?

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You may cite this publication as:

DiGiacomo, G.2017.Cash Flow Crunch. A Decision Case Study in Principles for Transitioning to Organic Farming: e-Learning Materials and Decision Case Studies for Educators.  K. Moncada, C. Sheaffer, and N. Tautges (Eds).  University of Minnesota, St. Paul, MN.