A Moooo-Ving Story-How Farmers Cow Manages Working Capital

A Moooo-ving Story-How Farmers Cow Manages Working Capital

Farmers Cow was formed from a political action committee (PAC) called Very Alive, which included farmers in eastern states. Initially, Very Alive was developed to inform and influence legislatures on the value of local farms. They highlighted how investments in farms lead to jobs for the area, both directly, such as farm laborers and indirectly, such as grain dealers. In Connecticut, which had six (6) farms involved in Very Alive, they effectively utilized the farmland preservation program. This program "allows farmers to sell away development rights to the state in order to continue farming land that otherwise would be prohibitively expensive given land values in Connecticut. Much of the 12,000 acres of farmland among the six dairy farms is protected under the state program."

"A farmer's working capital is defined as the wealth that is used in day-to-day operations. It is calculated as current assets minus the current liabilities." Farmers Cow was formed from the Very Alive PAC. It was formed as a limited liability partnership in order to raise capital and begin a joint effort to promote and produce fresh products from the six (6) dairies. They are structured as a privately held partnership. They produce joint products and are branded less than one name/logo. This has help to effectively boost each farm producing a 20% return annual growth for the group. One of the reasons for the growth is the steady release of new products from dairy items, such as milk, half and half, and ice-cream to newer products such as eggs, apple cider and coffee. More recently they have opened a café that features local fresh and their own products. Their products are also carried in large grocery stores throughout Connecticut, New England and New York areas.

The owners of Farmers Cow initially used a grant, which also required an in kind match to design a business plan which included solid forecasts. From their business plan they applied and received a second grant to bring their business plan to life, including packaging, product lines and other start up needs. Each farm manages their own working capital, by managing their debt to assets ratio. They also include their farm equity to finance their debt, effectively securing their debt to existing assets reduced their risk factors.

Following the business plan, which was designed to limit overhead and focus on the customer desire for fresh and local food, Farmers Cow capitalized on word of mouth and face to face advertising. They created a marketing plan that marketed directly to the consumer who voiced their desire for the Farmers Cow products to retail outlets, which catapulted their products into stores. Continuing to listen to their customers, they expanded their product lines and aligned with other congruent local businesses to market additionally requested products,