Where Will You Build Your Next Dairy?

November 13, 2013 02:53 PM
Where Will You Build Your Next Dairy?

Regional milk prices aren’t the prime attraction for moving to a new dairy area. Here’s what’s increasingly important.

The heartland between the Rocky Mountains 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.

That was not only the assessment of a dairy relocation consultant but the personal experience of three dairy producers who spoke Tuesday at the Elite Producer Business Conference in Las Vegas, Nev.

Consultant Tom Haren and dairy producers Linda Hodorff, Rein Landman and Mike McCarty comprised a panel that discussed, "Where Will You Build Your Next Dairy?" They shared their experiences in relocating or building additional dairies in new areas.

Social, financial and regulatory pressures are squeezing many dairies and forcing some to look outside of their long-time operating zones. That was the case for Landman, who moved from the Netherlands to South Dakota 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 said.

Since Landman’s dairy relocation, several cheese plants have emerged 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 said. "It’s a win-win for everybody."

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

"Producers are going to put facilities where they have the most control," said Haren. "As dairies continue to consolidate, your decision will be driven by where you can operate best financially. That’s away from population centers."

That was a key driver for Hodorff. She, husband Doug and the Hodorff family have retained their Eden, Wis., dairy while Linda and Doug added their own 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 said.

The couple now splits their time between Wisconsin, where the family milks 950 cows, and their own 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 the Nebraska dairy's original milking parlor to an expandable double-16 configuration. The couple also recently added a non-family junior partner, Jake Stern. Linda believes an ag-friendly community and availability of feed are key to dairy relocations.

McCarty told the audience about his family’s relocation to Kansas from Pennsylvania five years ago. He, his parents and three brothers faced an urban environment in Pennsylvania that was increasingly 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," McCarty said.

The move to Kansas took five years of planning. It’s been successful for the McCartys, who now operate three dairies there. They have also formed a partnership with Dannon and are involved in a processing plant near one of their dairies.

"There are a lot of things right about Kansas," McCarty said, pointing to tax incentives, permitting ease and the ag-friendly community as well as the state’s wide, open spaces and weather that suits cows. He emphasized 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," McCarty said.

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