Where Will You Build Your Next Dairy?

08:56AM Nov 26, 2014
( Drumgoon Dairy )

Make financial strides in ag-friendly locales

The heartland between the Rockies and the Mississippi River appears to offer the most dairy-friendly resources and long-term future for those looking to build new or satellite dairies.

Social, financial and regulatory pressures are among those squeezing many dairies and forcing some of them to look outside their long-time operating zones. That was the case for Rein Landman, who relocated from the Netherlands to South Dakota back in 2003. 

He and his family built a new dairy along the I-29 corridor of eastern South Dakota. Today, their Linde Dairy milks 1,200 cows. “It’s home now,” Landman says. 

Since Landman’s relocation, several cheese plants have been built along I-29. “Plants are competing for milk. There’s the potential to milk more cows, and it’s easy working with our neighbors,” he adds. “It’s a win-win.”

Local milk prices aren’t the prime attraction for moving to a new dairy area, Haren notes. What is increasingly important is the availability of feed and stability of operating conditions for the next 20 to 25 years. 

“Producers are going to put facilities where they have the most control,” explains Tom Haren, whose company, AGPROfessionals, provides resource planning, regulatory consulting and engineering for the agriculture industry. “As dairies continue to consolidate, your decision will be driven by where you can operate best financially. That’s away from population centers.”

Plan To Expand. That was a key driver for Linda Hodorff. She and her, husband, Doug, and the Hodorff family have retained their Eden, Wis., dairy while Linda and Doug added a satellite dairy near Milburn, Neb. Attracted by the availability of feed, Linda and Doug first invested in their own heifer facility in Nebraska in 1999. In 2005, “we saw additional opportunities and bought a dairy in central Nebraska,” she explains. The couple’s time is now split between Wisconsin, where they milk 950 cows, and Broken Bow Dairy in Nebraska. Linda and Doug plan to increase their 600-cow Nebraska herd to the same size as the Wisconsin facility. 

The Hodorffs have already expanded their Nebraska dairy’s original milking parlor into an expandable double-16 configuration. The couple also recently added a non-family junior partner, Jake Stern. Linda echoes the notion that feed availability and a community’s receptiveness to agriculture are key.

Mike McCarty and his family relocated from Pennsylvania to Kansas in 1999. He, his parents and three brothers had faced a climate in Pennsylvania that was becoming unfriendly to agriculture, making it impossible to expand the dairy. “If we wanted to survive another 100 years, we knew it had to be somewhere else,” he says. 

The move took five years of planning and has been successful for the McCartys, who now operate three dairies. They have a partnership with Dannon and are involved in a processing plant on one of their dairies. 

“There are a lot of things right about Kansas,” McCarty says. He pointed to the state’s tax incentives, permitting ease, the ag-friendly community, the wide open spaces and weather that suits cow production. 

He also emphasizes the importance of careful planning before building or buying a dairy elsewhere. “Be patient, do your homework and spend time in that community prior to moving there,” McCarty says. 

Top 10 Factors For Dairy Site Choices

A recent survey of 105 producers identifies the factors they view as most important factor when deciding where to operate a dairy: 

1. Access to land for feed production
2. Cost of feed
3. Supply of locally grown forages
4. Availability of land for animal waste
5. Availability of water
6. Availability of land for construction
7. Complexity of regional waste laws
8. Mailbox milk price
9. Regional view of animal agriculture
10. Average temperature