To say times are tough for dairy farmers would be understating the obvious. This sector has been hit with challenges—high input costs, labor shortages, regulatory pressures and policy nightmares. The margin between cost of producing and selling milk is so miniscule it’s been hard for many dairies to make money. Larger dairies have fared better, and those who grew their own feed built in some protection, but no one has been immune.
The numbers speak to the situation. America’s fastest growing segment of dairy farms is those with more than 1,000 cows, reports USDA. From 2003 to 2011, this segment grew by 38%. While these large dairies represent only 3% of total U.S. dairies, they are responsible for 50% of U.S. milk production.
Top-tier dairies find they must be innovative and look beyond the farm for new ideas. Take our 2013 Top Producer of the Year, Luke Brubaker, who was limited in expansion opportunities due to his farm’s location near Lancaster, Pa. Brubaker and his sons began to think outside of normal dairy management practices. They built a methane digester that uses manure and food waste from a local college to produce electricity for the community. Their barns have solar panels to reduce farm energy costs. "We couldn’t grow profits in the traditional way, so we had to look for something new," Brubaker says. Read about this farm on page 18.
Key Question for Suppliers. The best managers in agriculture are never afraid to ask their suppliers and vendors to "show me something new." According to a study of the dairy industry by ag research firm Entira, one of the most eye-opening trends in commercial farms is a shift in what managers demand from their supplier relationships. The benefits they seek today are more about advice and knowledge, and less about product price and service, reports Entira. Producers who want to keep getting better will work with those suppliers who can go beyond their own area of expertise and provide broad-reaching benefits. With more skin in the game than ever before, top producers need to reap all they can from their farm investments and vendor relationships.
The next time a supplier comes to the farm, try this conversation starter: "I know you visit with many other farmers. What have you seen that works well for someone else?" It’s OK to push the envelope with your seed representative, equipment dealer or crop consultant.
Don’t settle for the same ol’, same ol’—ask your supplier to show you something new.
Editor of Top Producer