Nothing Risked, Nothing Gained: A Case Study about a Dairy Farm Expansion Gone Awry

ABSTRACT Dairy (Bos taurus) farming is becoming more complex while the margin for error is diminishing. Few owner‐operators who have managed a mid‐sized dairy are prepared for the management challenges of expansion and the subsequent financial vulnerability. Despite their best efforts at careful planning, Tom and Jackie Fabian's dairy farm expansion was fraught with unexpected dilemmas and changing conditions that threatened the very survival of the farm and years of accumulated equity. After expansion, feed prices rose, milk prices dropped, feed quality suffered, production per cow declined, and many problems went un‐addressed. Fabian created a professional advisory team that offered solutions to tactical problems and addressed the impending financial crisis. The Fabians needed to develop a strategic plan that would assure the farm's success, protect their retirement equity, and afford Tom and his wife time to pursue family, church, and community activities neglected during the time constraints of expansion. This case demonstrates the many business risks associated with dairy management and affords the opportunity to discuss practical methods to reduce those risks. The case is suitable for use with workshops for dairy advisors and for use with production management courses for graduate and undergraduate students.