Husband-and-wife team builds dynamic business capitalizing on market needs
Right place. Right time. Right people. These are the words Cheri and Donald De Jong use when describing their 25-year dairy career. But their astonishing success goes far beyond luck.
Donald is CEO and Cheri serves as CFO of their multi-state dairy operation. Their complementary personalities have helped expedite long-term business plans and risk-management strategies.
“If you have a good CFO, it makes the CEO work much better,” Donald says. “I just happened to get lucky and married up.”
“Donald is the dreamer,” Cheri adds. “He is the one who will make the deal and thinks we can step over those boundaries. I’m the one who comes in and figures out how we’re going to pay for it and operate it.”
The De Jongs are business-minded dairy farmers and laser-focused entrepreneurs. But above all, the 2016 Top Producer of the Year winners are people managers and mentors. Their Texas Panhandle operation employs 400 team members. Through their focus on talent development, they’ve been able to grow to 20,000 milking cows, producing organic and conventional milk through three operations.
Scale-Up Start. The couple entered the dairy industry with an ambitious plan. After earning agribusiness management degrees from California Polytechnic State University, San Luis Obispo, the California natives headed east. With funds from Donald’s work brokering commercial real estate in southern California, and financial support from his father, the couple bought an existing 1,000-cow dairy operation in Dublin, Texas, in 1989.
Donald and Cheri steadily grew the operation in partnership with one of Donald’s brothers. They doubled their herd and built equity. But state regulations did not support their growth plans.
“After 12 years, we knew that if we really wanted to grow to the levels we wanted to achieve, central Texas was not the place,” Cheri says.
They looked north to the less-populous Panhandle. In 2001, they started raising heifers close to Dalhart. The next year, they started Northside Farms, a 2,500-cow conventional dairy in nearby Hartley. The businesses quickly boomed, but Cheri and Donald lived six and a half hours away.
“It was our first exercise in managing from afar,” Donald says. “We thought we could do it, but we couldn’t do it effectively.”
When a prospective buyer made an attractive bid for the central Texas dairy, the De Jongs sold it and moved their three daughters and all of their dairy cattle north.
That allowed them to expand Northside Farms’ footprint to a 5,800-cow conventional milking herd. The move north also led them to a new consumer market and a higher level of professionalism. Through his involvement with dairy cooperative Select Milk Producers, Donald knew large milk buyers were seeking ways to fill customers’ growing thirst for organic milk. They studied the market and negotiated a business deal.
“We knew this opportunity would be wrought with risk, so we asked our buyers to share the risk with us,” Donald explains. “For our first contract, we engaged in long-term commitments so we could make the large financial investment.”
The De Jongs learned of some virgin land near Hartley, and they worked with the landowner to certify it for organic production.
A New Opportunity. Their goal was to start small with 500 head and learn the ropes. They applied best practices from their conventional operation and vice versa. “My eyes have been opened,” Donald says. “Our usage of antibiotics is down on the conventional side, and animal welfare is better for both conventional and organic. Without the tools available, everyone has to be hyper-vigilant about prevention. At scale, organic works great.”
Today, their milking herd includes 8,600 conventional cows and 13,000 organic cows—a ratio based on opportunity. “We generally don’t produce milk to sell on the open organic market,” Cheri says. “We are strictly filling a market need.”
The multi-year commitments the De Jongs have secured help them be strategic about expansion.
“Such forethought is the reason why they have been able to weather the cycles and challenges the dairy industry presents,” says Dave Bellows, CEO of Pedestal Commodity Group and director of risk management for AgriVision Farm Management, the company that oversees the dairy operations.
The De Jongs’ business plan also lends perspective on both sides of a sometimes heated debate about organic versus conventional production. “It is not us against them,” Donald says. “You can’t say one is better than the other. It is a big market basket with a lot of consumers, and we need both.”
Focus On Management. Because of their farm size and varying enterprises, the De Jongs created AgriVision, which controls accounting, human resources, purchasing and inventory controls. At the office headquarters, they also have a stockpile of supplies known as the AgriVision Store. “We have one purchasing person, and we can bulk buy and get better deals,” Cheri explains. “We keep track of inventories and don’t over-purchase.”
This arrangement keeps vendors away from the farms and saves employees from extra trips to town.
AgriVision’s structure and professionalism also help the De Jongs attract the best employees.
“Borrowing lessons from corporate America, AgriVision utilizes modern human resource, leadership and training techniques to develop all the employees within the organization,” explains Pete Nanninga, vice president and senior relationship manager with Wells Fargo.
Employees can pursue 16 career tracks. “We no longer have conversations about compensation,” Donald says. “It is all laid out in their personal development plans. Everyone can control their destiny.”
It takes foresight to invest in people, adds Noel Clark, director of human resources for AgriVision. “But it is paying dividends,” Clark says. “Our average turnover rate is decreasing and our goal is 10%.”
Every entity has goals plotted on a scorecard. Half are based on production levels; 25% on financial metrics; and 25% on human-resource factors such as turnover rate and team development. Managers do quarterly financial deep dives. Cheri obtained an MBA and has developed strict financial covenants for debt ratios and a purchase-approval process. This level of detail, along with audited financial statements, has built trust with business partners.
“The De Jongs not only track more information than most in the industry, but they are able to provide that information weeks in advance of others,” says Michael Lynch, the De Jongs’ CPA.
From Doer To Manager. As the operation has evolved, so have its leaders’ roles. “The most important thing we can do here is to mentor and coach,” Cheri says. “I’ve spent a lot of time in the last year thinking about the things I don’t need to be doing on a day-to-day basis.”
“It is a scary thing to quit being a doer,” Donald adds. “But with systems in place, you find a comfort level. I find myself reverting back to old roles. You have to push yourself out of your comfort zone and say that’s not your role anymore.”
This change in mindset has allowed the De Jongs to look for opportunities in other locations. By the fall of 2018, they plan to have a satellite dairy online in Indiana.
As for the future, Donald and Cheri have three nephews working with them and are hopeful a few of their daughters, who are pursuing college degrees, might be involved in the farm operation at some point in the future. “The dairy sector is consolidating, and we know that our growth and size is what will enable us to remain viable in the industry for many years to come for our family,” Cheri says.
About Donald and Cheri De Jong
Operation: Donald and Cheri De Jong own and operate three dairies, Natural Prairie Dairy, Northside Farms and Jersey Gold Dairy, which produce organic and conventional milk. Their herd includes 8,600 conventional cows and 13,000 organic cows, and they grow 85% of their feed needs on 50,000 acres of farmland in Texas and Colorado.
Family: Donald serves as CEO and Cheri as CFO. Their three daughters, Ashley, Allison and Alexandra, are in master’s and undergraduate degree programs.
Human Resources: The De Jongs employ 400 team members. Employees receive competitive salaries, detailed career paths, English as a second language courses and training. For employees’ children, the De Jongs offer tutoring, a summer-school program and aide with college applications.
Community: Donald serves as vice chairman of Select Milk Producers and is on the board of directors for fairlife and the Greater Southwest Milk Marketing Agency. He is a trustee for the Alpha Gamma Rho Fraternity Foundation. Cheri is a member of the Farm Foundation Round Table and serves as a trustee of the Sigma Kappa Foundation, in addition to being involved with many local organizations. Together, they launched the De Jong Foundation to empower dairy farmers worldwide.