Editor’s Note: This is one article in a series that is included in the 2024 Farm Journal’s State of the Dairy Industry report. The full 16-page report will appear in the May/June issues of Dairy Herd Management and Milk Business Quarterly and will be published in this space over the next several weeks. To download the full report for free click here.
Finding efficiency at every level is one way fourth-generation dairy farmer Alex Neuenschwander is learning to thrive.
Neuenschwander also has a big job off the the farm this weekend, as he’s the 2024 Indy 500 Milkman. Neuenschwander will be the one to hand deliver the coveted bottle of milk to the winning driver at the end of the race, a tradition that started in 1936. Since then, an Indiana dairy farmer has been in the winner’s circle to hand off a cool glass of milk.
Whle he may be in the spotlight this weekend, we caught up with him before his big day at the race, to see how this young dairy producer is finding ways to not just survive, but also churning out new opportunities to grow the family dairy.
“We reuse the sand and then it goes through a manure separator. Then, the sand, then goes through another separator and takes out all of the solid manure so we can utilize that on fields,” says Neuenschwander, who’s part owner of Neu-Hope Dairy located in Bluffton, Indiana. “Then the liquid will go back out to our lagoons, and then it will cycle back through flush our floors. And then eventually we’ll take the lagoon water and irrigate it out on our fescue to help us grow crops.”
Standing in their new state-of-the-art barn built in 2019, it’s clear the Neuenschwander’s pay attention to every detail, making sure there is no waste on their 1,100 head dairy.
“It’s a really cool circle that you know water is just continually reused,” he says. “I think one of the coolest things about dairy farms in general is that we just recycle everything.”
They flush their barn with water six times a day, but they’re able to utilize every drop.
Modernizing Their Dairy with a Focus on Technology
It was an important feature they added to this barn when it was built 2019. The family decided to add the most modern features to help with cow comfort and milk production on the farm.
“Using modern technology has been a huge thing to help us be more efficient. We’re utilizing sensors on the cows, we’re utilizing ai technology on cameras that are constantly watching the cows. So, we can make fast informed decisions as quick as we need to,” he says. “And that has really helped us become more efficient, streamline some labor, and just getting us where we need to be so that we can work the most efficiently as possible, too.”
He says dairies are growing more modern, so their family dairy knew in order to stay competitive, they had to do the same. That even included finding more efficient features for labor.
“Having technology on the cows so that we can communicate with them via sensors via their smartwatch, I guess you could say that’s been a game changer for us as well, just to be able to find the right cow and leave all the rest of the cows alone. So, they can be a cow and just come out here and do their thing,” Neuenschwander says.
Cashing In On Beef-on-Dairy
Another game changer, according to Neuenschwander, is the focus of beef-on-dairy.
“70% of our cows we use for beef-on-dairy. So, they’ll have a beef calf that marketable from day one,” he says.
Neuenschwander explains by breeding for beef, it’s bringing even more value back to their family dairy, fueling another revenue stream.
“The buyer will come in two or three times a week and buy all of the baby calves that are that are beef calves. It’s been a great revenue stream for us, is really a high value-added enterprise for sure,” Neuenschwander says. “They just bring a lot of value back to the dairy which has been helpful here over the last few years. Dairy prices haven’t always been the best.”
The team at Farm Journal’s Dairy Herd just released a State of the Dairy Industry Report, which is based off a survey they conducted of more than 210 dairy producers. The survey found 59% of dairy operations are breeding for beef-on-dairy and just over half (51%) are raising them.
“It began really as we came into 2019 to 2020. We saw especially in the COVID years, a lot of disruption in the supply chain around beef,” says Mike North, president of the producer division for Ever.Ag.
The supply chain disruptions, coupled with the drought in the West and South, sparked a new opportunity for dairy farmers to cash in.
“Today, we have some of the highest on farm prices for cattle that we’ve seen in history, day old beef calves are selling for $900 to $1,000, right off of the farm,” North says.
He says in 2020, those calves were virtually worth nothing.
“At the time, we had plenty of replacement heifers, and dairyman said, ‘We’re just going to start breeding some of our lower genomic testing cows to beef and putting beef semen in them.’”
North says as dairy producers look inside their own genetic pool on each farm, they can also better understand which genes to carry forward to the next generations.
“And we can’t overlook that technology either,” North adds. “With sexed semen on both sides, we can really hasten the movement towards advancing the genes on each dairy operation, while at the same time servicing a big need in beef.”
“We pair it with sexed semen, so we can use that to breed our best cows to sexed semen, and the lower end ones to beef semen, and then we can improve our genetics off of that. Our highest cows are mated with the best bulls and everything else is a valuable beef calf,” Neuenschwander says. “So, it’s a win-win for us.”
From more consistent carcasses to high-quality beef, North says beef has become big business, and one that North doesn’t see going to go away.
“With the advancement of genomics with sexed beef semen, improved bull selection and availability of beef semen and pricing, it is providing a great incentive against a beef herd that likely isn’t going to grow much either.”
Growing to Survive
The State of the Dairy Industry report also found despite a mountain of challenges for dairy farmers, more than half plan to grow in one way or another over the next 5 years.
“It could be more cows, it could be this beef-on-dairy, maybe it’s feed security and moving towards growing all of my own forages. Either way, producers are going to have to create new growth inside their operation to be able to accommodate the arrival of the next generation or to overcome some of the margin compression that we’ve had over these last many years,” North says.
As dairy producers like Neuenschwander continue to ride the volatility of milk prices, they’re looking for growth any way they can, even if that growth is also measured in savings.
“Dairy farms are getting better all the time,” Neuenschwander says. “It used to be that we were making about, let’s say we were making 80 pounds of milk. And we thought that was good. Now you need to be making 90 pounds of milk and for it to be good. It’s just dairy farms are getting way more efficient. And so, we just have to keep getting better and keep looking for efficiencies any way we can.”
