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Making a CWT Whole-Herd Buyout Bid: Things to Consider

Farm Business Management Update, August/September 2003

By Geoff Benson

1. First consider what is most important to you, to other family members as individuals, to you as a family?

2. What financial shape is your business in? Can you survive? If so, is that what you want?

3. What are your alternatives if you stop producing milk? Which is the best alternative for you?

4. What are you planning to do or likely to do if you do not participate in the buyout program? Continue dairy farming or sell out anyway? If you plan to sell out anyway, how soon would you sell?

5. What economic costs would you bear by participating in the herd buyout?

6. Bidding strategy.

7. The tax consequences of participating in a buyout could be significant. Consult your tax counselor or accountant on the tax consequences of a successful bid and the choice of a payment option.

8. Lien holders and major creditors.

Editor's Note: The next two articles discusses items dairy producers should consider before making a bid to the "Cooperatives Working Together" (CWT) program. Details of the program can be found at

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