Diversification

Are Beef-on-Dairy Calf Prices the New $24 Milk?

Mon, 09 Mar 2026 22:29:10 GMT

The rise of beef‑on‑dairy has changed the way many farms think about their finances. What began as an extra source of income is now a major contributor to overall profitability, especially during a year of tight milk markets. In fact, some industry leaders argue that beef revenue now rivals, and in some cases exceeds, the profit generated from milk itself.

“You guys may be in the beef business more than you are in the dairy business, ” says Gregg Doud, president and CEO of the National Milk Producers Federation, during this year’s Professional Dairy Producers conference.

This shift has happened quickly. Not long ago, beef revenue represented a relatively small portion of dairy income. But today, the need for more beef has dramatically increased the value of calves leaving the farm.

“At the end of 2022 on the farm, the average dairy was getting paid about a $1 to $1.50 a hundredweight in beef equivalent revenue,” says Mike North, President of the Producer Division at Ever.Ag “Today, that number is north of $5. We’ve tripled that part of the financials. It’s a massive opportunity.”

Filling the Cattle Gap

One of the biggest reasons beef-on-dairy has grown so quickly is simple: the beef industry needs more cattle. In recent years, the U.S. beef cow herd has shrunk due to weather, high input costs and lower heifer retention, tightening the supply of calves for feedlots.

That shortage has pushed feedlots to turn to beef-on-dairy calves to fill pens, which has driven calf prices higher and created a source of income that’s becoming hard to overlook.

“Beef has become a major contributor to our revenue stream,” says Will Babler, principal at Atten Babler Risk Management LLC. “And it’s not going away. These prices may not last forever, but they won’t go back to what they used to be.”

Rebuilding the national beef herd takes time, and until more heifers are retained, the number of feeder calves available will remain tight, keeping demand strong for crossbred cattle.

“The question I get asked most often is how long is this going to last,” Doud says. “The answer is a minimum of three to five years. If you take that [beef] heifer and you retain her, then her offspring become steak at the grocery store. How long does that take? The answer is a minimum of three years. So this does not change in terms of what these [prices] can do.”

A Protein Driven Future

Consumer demand is also a major factor behind the momentum. Even as retail prices climb, beef continues to hold a strong place in American diets, and restaurants and retailers have largely kept it on the menu. That steady demand keeps pressure on the supply chain to find cattle wherever they can be produced efficiently.

“Six years ago, if you would have told that a steak could rise from $30 all the way to $65 and restaurants would still be full on a Tuesday night, I would have told you you were crazy,” Doud says. “But we’ve done it. This is demand driven. The U.S. consumer loves that product.”

The trend isn’t limited to the U.S. market. Globally, demand for animal protein continues to grow, and Doud believes supply will struggle to keep pace.

“If you look over the next 10 years and beyond, the supply of animal protein in the world with beef, pork, poultry and dairy comes nowhere near meeting the demand,” he says. “The current demand for protein in the world is unbelievable.”

A Market on Fire

In today’s market, beef-on-dairy calves are pulling in prices that would have seemed unimaginable just a few years ago. Day-old calves can sell for more than $1,500, and in some regions, even higher. That kind of money has producers paying attention in the same way they do when milk prices hit rare highs. North compares the current beef-on-dairy market to $24 milk.

“What should one do with $24 milk?” he asked. “Walk quietly into the sunset and say, we’ll wait to see if it gets better?”

With prices sitting at all‑time highs, this isn’t the moment to step back.

“That’s where we’re at on beef right now,” he says. “We’re talking about all-time records, and you just don’t walk away from those and say, ‘Ah, I’ll check back in next month.’ That’s not how we approach markets like this. You’ve got to go after it.”

Part of what makes beef-on-dairy calves so valuable is the consistency and predictability they bring. Feedlots appreciate that these animals perform reliably and arrive in good condition.

“The buyers love these crossbred calves,” Babler says. “They have figured out how to get them to perform, and they show up on time. None of this is going to change.”

He believes that dairies bring more to the table than just animal performance. They also bring traceability, which could create additional opportunities for premium value.

“When you get into the packer community and start having conversations, not only do they love them, but there’s an extra set of opportunities attached to this animals,” Babler says. “Producers know their breeding decision, when that calf was born and every treatment it received, all the way up to that point of sale.”

That combination of predictability and traceability is why he believes beef-on-dairy brings more to the table.

“I’ve said for the last years it’s my belief that premium beef in the United States will be held largely by dairymen because of the extra benefits that these animals bring as they go to market,” Babler says.

Babler adds that the impact is clear on farms right now, and even when the market eventually levels out, the interest and value of these calves are here to stay.

“We have all realized the benefit of beef revenue on the dairy right now,” he says. “I’m really optimistic about where this beef and dairy intersection is going. We know that it may go higher, but we also know there’s going to be a reset. We just don’t know when. The good news is that even when it resets, the amount of beef value and interest on these cattle I just don’t see going away whatsoever.”

A Long-Term Opportunity

Ask any producer participating in a beef-on-dairy program and they will quickly tell you how it has become a major force in their farm’s profitability. Record-high prices and strong demand from feedlots have made this market impossible to ignore.

For many operations, selling crossbred calves has become a regular part of the business. And in years of low milk prices, that extra value can make a real difference in keeping finances steady.

Effective Ways to Enhance Profitability Through Diversification and Innovation

Thu, 18 Sep 2025 12:38:10 GMT

In today’s challenging economic landscape, dairy producers are facing the squeeze of tight margins, pushing them to explore various ways to diversify and secure their operations. With milk revenue not as robust as it used to be, it’s imperative to expand income lines to ensure long-term sustainability. Kevin Dhuyvetter, an agricultural economist and dairy technical consultant with Elanco, offers insights on how dairy producers can effectively diversify while managing core business operations.

Diversification: Strategic Choices and Challenges
For many dairies, large or small, there is a growing trend toward generating income beyond milk sales. Methane digesters, on-farm processing, agritourism and product extensions like ice cream and cheese businesses are just a few of the avenues being embraced. One inspiring example is Ken Smith from Virginia, who creatively transformed an old truck stop property into the successful Moo-Thru ice-cream venture in 2006.

“We sold 15,000 cones in the first three weeks,” Smith says. “People asked if we’d franchise this, and we’d only been open 60 days.”

The Smiths sold the family dairy, Cool Lawn Holsteins, a 1,000-cow dairy with a 30,000-lb.-plus herd average to their son, Ben, so their attention could go toward their ice cream endeavor.

(Photo provided by Cool Lawn Holsteins)

Today, Smith, his wife, Pam, and their daughters help operate and manage the ice-cream portion of the family business, while their son, Ben, owns and operates the dairy, Cool Lawn Farm, home to 850 cows.

While diversification offers promising income opportunities, it brings challenges. Dhuyvetter advises producers to examine whether new ventures complement or compete with their core milk production business. An ice cream business could boost profitability but might also demand significant time and management, potentially conflicting with dairy operations.

A New Income Option: Beef-on-Dairy Opportunities
One lucrative option for dairy producers is beef-on-dairy operations, which Dhuyvetter highlights as a complement to traditional dairy business. This involves breeding cows to produce beef-cross calves, allowing dairies to tap into the beef market. However, it’s crucial for producers to evaluate their breeding strategy and potential market involvement to avoid competing with milk production needs.

Ben Smith of Cool Lawn in Virginia has gone against the popular beef-on-dairy trend.

“While most of the industry is going the beef-on-dairy route, we’ve focused on selling high-quality sexed Holstein semen,” Ben Smith says, noting this has added dollars to their bottom line.

Calculating the right percentage of cows to breed for beef is vital. Dhuyvetter stresses the importance of understanding your farm’s needs for replacement heifers to ensure enough resources are allocated to core milk production activities. Producers must decide between retaining ownership of the calves or selling them at birth based on which option yields a higher return.

“Should I be breeding cows to beef? For most producers, the answer is yes, but the next two questions are the ones you need to think about,” he says. “What percent of my cows should I breed to beef? What do I do with the beef-cross calves produced?”

Sustainability and Carbon Market Ventures
Beyond production diversification, producers can embrace sustainability projects like methane digesters or carbon markets. These ventures are not universally accessible, primarily due to their significant capital requirements, but they offer promising revenue potentials.

Dhuyvetter advises careful consideration of economic reversibility before investing in such technologies, ensuring decisions support long-term financial goals. Elanco, for instance, provides opportunities for monetizing emissions reductions via carbon marketplaces using products like Bovaer and Rumensin.

For Smith, sustainability has always been a focus, and since 2023, the farm has leveraged several opportunities to enhance their practices. Manure injection, backed by private sector studies on carbon capture, has been a notable success.

“We had done very little, mainly because we didn’t have the equipment,” he says, adding that Northern Virginia doesn’t have a surplus of custom applicators, so it didn’t make a lot of sense prior to 2023 for them to do this. “Now, our neighbors are happier. We’re happier. We’re getting the full value of that nitrogen, and not to mention, we’re getting an incentive to do this practice.”

Navigating the Future of Dairy Revenue
For dairy producers, diversification and innovation are more than contemporary trends; they are longstanding methods of enhancing resilience and profitability. By analyzing new revenue streams for complementarity with existing operations, understanding the economic implications and considering reversibility options, dairies can strategically enhance their income.

“One hundred years ago, you had a bull calf, and you probably didn’t sell it. You probably fed it to your family, which is diversification by a different path,” Dhuyvetter says. “And we went through some tough years in the late ‘80s and into the ‘90s, and we always talked about having alternative revenue resources to survive in farming. Carbon monetization is another step on that path.”

Ultimately, dairy producers are tasked with navigating a complicated financial landscape and deciding which alternative revenue paths best suit their operations. These efforts ensure an additional cash flow vital to sustaining their farms for years to come, striking a delicate balance between tradition and innovation.

Your Next Read:
Transforming Dairies: 5 Steps to Set the Stage for Financial and Operational Success

The Tax Man Cometh To The Farm

Wed, 19 Feb 2025 16:44:43 GMT

Everyone can benefit from a practical reminder from time-to-time. In this case, Paul Neiffer wants to remind farmers that the 2017 Tax Cuts and Jobs Act is set to expire at the end of 2025.

“We’ve had these tax cuts for eight years now, but farmers may not be thinking about this and what it could mean for them,” said Neiffer, principal of FarmCPAReport.com and a Top Producer columnist.

Neiffer addressed the topic of what farmers need to know now and address from a tax standpoint during the 2025 Top Producer Summit in Kansas City.

“Certainly, farmers are aware of the lifetime estate tax exemption dropping in half after this year. But I think a lot of these other provisions that would hit them, they’re probably not quite as aware of them,” he said.

Neiffer highlighted three provisions he believes U.S. farmers are likely most interested in seeing extended or made permanent. They include:

1. The 100% Bonus Depreciation. Neiffer said he believes the 100% provision will be made permanent, though it’s currently only 40%.

“We think that will come back to farmers,” he said. “The practical benefit is when they purchase equipment or farm buildings they’ll be able to deduct 100% of that item in the year of purchase. Also, there is a chance that trade-in of farm equipment will be similar to the old rules and non-taxable in most situations.”

2. The increase in the lifetime exemption for estates. If the current law is left unchanged, as of Jan 1, 2026, the present lifetime estate and gift tax exemption will be cut approximately in half. It currently is almost $14 million.

Neiffer is optimistic about the exemption. “I think the likelihood on the estate exemption is very good. I think that’ll stay at least at the current level,” he said.

3. The Section 199A Cap. This provision allows individuals, trusts and estates with pass-through business income to deduct up to 20% of qualified business income (QBI) from taxable ordinary income. Schedule F farmers are also granted the 20% deduction.

While Neiffer said there is some bipartisan support in Congress for extending the Section 199A deduction beyond 2025, he is ambivalent about that happening. “With that 20%, it would be a lot more costly to enact,” he noted.

Practical Next Steps Farmers Can Take
Looking ahead, Neiffer said he believes the likelihood of having a major tax bill before the end of 2025 is slim. At best, the bill would be ready by November or December.

For that reason, Neiffer’s recommendation to farmers is for them to plan on pushing income into 2026 but to have the flexibility to bring that income back into 2025.

“The reason is if the tax cuts don’t get extended that means 2026 tax brackets are going to be a lot higher,” Neiffer explained. “So, we would want to bring income into 2025. Now, farmers have the ability to do that using deferred payment contracts and some other elections that they can make – but only if they plan ahead accordingly. They definitely want to make sure they do that,” he added.

Your next read: It’s Tax Time: Your Guide To Calculate Farm Income

On the Lookout for Opportunity

Fri, 27 Sep 2024 17:57:55 GMT

Travel to the southwest tip of Utah Lake, where Bateman’s Mosida Farms LLC is located, and you will not only see the largest dairy in the state, but you will see a bond of brothers and their families who worked extremely hard and who have honed in on innovation and sustainability to better care for their cattle and land. The Bateman family has taken major steps in the last decade to implement innovative growth strategies that provide more sustainability reassurance for the family’s 12,000-cow dairy farm housed on four different sites, 2,000-head of beef with two separate feed yards and 3,500 acres of cropland. All of this has earned Mosida Farms the honor of being named the 2024 Innovative Dairy Farmer of the Year by the International Dairy Foods Association (IDFA).

Keeping Eyes Open to Opportunity

The Bateman family has not let grass grow under their feet in any shape or form, as they have taken on numerous projects over the last several years.

Operating on the principles of sustainability and animal care that were passed down by previous generations, today Bateman’s Mosida Farms in Mosida, Utah, is owned and operated by the four families of Steve, Brad, Jason and the late Lance Bateman. The farm continues the family mantra of progression; always keeps its eyes open to opportunity.

The Bateman family says that sustainability and efficiency go hand-in-hand when it comes to keeping the family business afloat in the global market.

“Sustainability is important because it is looking with hope to the future,” Brad Bateman says. “What we do matters. It matters for the cows and for the land that we are stewards over. Another piece to being sustainable is profitability. We must be profitable in order to continue this family business for future generations.”

Solar Power

Environmental stewardship has a big role on the farm and the Batemans wholeheartedly believe everything must be sustainable. Since 2013 the Bateman family has also been operating a 600-kW solar array on their dairy operation allowing them to produce clean energy for the dairy, as well as the local community.

“We felt like as a hedge to the future that we would produce a percentage of our electricity here and pull that off the grid and control a portion of our electricity through the solar system,” Jason Bateman said.

The Bateman brothers are reminded of words of advice from their father, who always taught them to look towards the future and try to be progressive.

“Our dad always said you can’t stand still,” Brad recalls. “You always have to be learning, growing, and getting better. He often told us to get out there and learn. Go see how we can improve. This approach has certainly played into our drive for sustainability.”

Growing More with Less

In 2019, Bateman’s began a partnership to start a commercial-scale vertical controlled environment agriculture feed center. The Olympus Tower Farm test facility was only 857 square feet but produced 5,000-6,000 lbs. of sprouted wheat/barley grass per day which is the equivalent of 35-50 acres of conventional farming. This helped provide nutritious fed and improved production, especially in early lactation animals.

However, the Batemans share that unfortunately their partner decided to focus their efforts on other areas and the test facility was shattered.

“We are exploring the possibility of implementing another one in the future because we see great potential,” Brad shares.

Meat Processing Facility

The Batemans decided to diversify and added beef to their offering in 2020. Mosida Farms produces 100 beef calves weekly and those calves are fed and eventually sold in one of the Mosida Market locations.

In 2021, the dairy acquired a meat processing facility, allowing them to vertically integrate their meat production and deliver fresh local meat directly to local consumers. The integration has allowed the operation to grow economically and open a second market location in Provo, Utah.

The family has utilized various genetics to come up with the best beef on dairy cross for their market and Mallary Bateman, Brad’s daughter, shared that so far, the Wagyu cross is the flagship meat in the market.

“Mosida Market was just our family selling beef to our neighbors before it evolved to where it is today,” Mallary shares.

Robot Barn

A labor shortage nudged the Bateman family to put a new, climate-controlled robotic dairy barn that milks 820 cows in 2022. This has allowed the family to reduce labor costs and improve overall efficiency.

“At some point, we plan to implement phase two and add another 16 robots and 1,200 cows to the facility,” Brad shares, noting that several cows consistently produce more than 200 lbs. of milk a day at this facility.

Comprehensive Nutrient Management Plan

The dairy also enrolled in Utah’s Agricultural Voluntary Inventive Program in 2022, allowing them to implement a comprehensive nutrient management plan on all 3,500 acres of crop ground that they own and operate. This plan ensures that they are following all State and Federal water quality regulations and helps them protect nearby Utah Lake from excess nutrient loading. Utah Lake is a high-profile lake that is currently impaired for several beneficial uses and is undergoing a water quality study.

Additionally, Batemans are currently in the process of implementing a multi-million-dollar project to expand their waste storage facilities, install a centrifuge to treat their waste stream more effectively and construct earthen structures to further prevent any nutrients or stormwater from entering nearby Utah Lake.

The Batemans believe manure management and storage is important on any dairy farm because of the resources and assets that manure has as a nutrient.

“We feed the cows and process the manure and water that then returns to the ground. This creates an amazing sustainable cycle of nutrients that first goes to the cows, then to the soil, and finally back to the cows,” Brad explains.

Community and Industry Leaders

Looking to the future, the Batemans are committed to educating their community about the importance of agriculture and showcasing the industry in a positive light.

Katie Slebodnik, the Agricultural Voluntary Incentive Program Manager with the Utah Department of Agriculture and Food shared in her nomination that Bateman’s stand apart from their peers in countless ways.

“As the largest dairy in the state, many smaller local Utah dairies look to them to pilot new technologies so they can understand their value,” she says. “The Batemans also travel extensively to various states and countries around the world multiple times a year, looking for new practices and technologies to try.”

Mallary Bateman recalls that her family would always get in a car and drive—to Idaho or other states to learn from other dairy producers.

“How can we improve? What can we learn? We always have taken that approach and then turned it around to help others,” she shares. “Vacations always turn into an opportunity to see other dairies that helped enhance our operation.”

Tips to Other Farm

The Bateman family is not only proud of their heritage but also proud of the dairy business they have built for themselves. When looking to the future, they feel blessed that a second generation is working on the farm to help continue the family legacy.

Steve Bateman encourages other producers to provide opportunities for the younger generation to come back to the farm.

“You have to work to make it possible for your kids to continue the business, and get them involved early to keep them there,” he says.

The investment Batemans have put forward to drive their dairies forward in terms of sustainability and profitability is indeed admirable. The Batemans share that there are many ways to do the same thing—not only across the U.S., but across the world.

“Hopefully we can learn from one another to find the best way in each area to do some of the things we do daily,” Brad shares. “An industry goal should be to create enduring family farms that can stand the test of time and truly become sustainable farms.”

How To Translate Generational Misunderstandings

Tue, 18 Jun 2024 16:24:36 GMT

The week of June 10, Farm Journal is celebrating the next generation of American agriculture. Our goal is to encourage you to plan for the future and cultivate multigenerational success through the transfer of skills and knowledge. Think tomorrow, act today to align your asset, resource and financial legacy.

Communication between one generation to another can seem like talking a different language.

“I suggest you approach looking at another generation with curiosity rather than judgment,” says Kim Lear of Inlay Insights.

In her work, Lear shares generational theory insights and highlights how these are trends, not traits, but can inform better teamwork.

Why It Matters Now

Taking a refreshed approach to understanding on-farm team members from other generations is top of mind as today there are four generations actively employed across our economy.

When bringing more than one generation into leadership roles on the farm, it’s helpful to understand how to communicate.

“Dates given for generations are just a starting point. Generational theory is taking formative events from our growing years and seeing how they shape the people who lived through it,” she explains

A typical generation spans 15 to 18 years, and while general trends can be highlighted, Lear also notes there are exceptions.

“There are individuals who sit between two generations, and those people can serve important roles communicating between the generations. They are generationally bilingual,” Lear says.

3 Steps for Generations To Work Together
“We are in a unique time where we have four generations in the workforce,” says Kim Lear. She suggests three steps to bring together a productive team. 1. Prioritize clarity over brevity in communication. 2. Instill respect as the foundation. 3. Deliver feedback in a way that motivates to improve rather than paralyze with fear. Give a clear path for the road to improvement with the tools to get where they need to be.

3 Steps for Generations To Work Together

“We are in a unique time where we have four generations in the workforce,” says Kim Lear. She suggests three steps to bring together a productive team.

1. Prioritize clarity over brevity in communication.

2. Instill respect as the foundation.

3. Deliver feedback in a way that motivates to improve rather than paralyze with fear. Give a clear path for the road to improvement with the tools to get where they
need to be.

We Are Getting Older

The scales are tilting toward an older society, and there are fewer members of the younger generations.

“The story of aging is changing in America,” she says. “We have cliff diving birth rates and low immigration. Also, we are an ageist society.”

Today 62 million adults ages 65 and older are living in the U.S., which is 18% of the population, according to the U.S. Census. In 30 years, 84 million adults ages 65 and older will make up an estimated 23% of the population.

With the recognition of how our population is structured, and how your on-farm team members reflect their generational trends, you can evaluate your communication.

Next Gen Insights

Lear shares trends about Generation X (birth years: 1965 to 1979), millennials (birth years: 1980 to 1994), and Generation Z (birth years: 1995 to 2012).

Members of Generation X can exhibit fierce independence. For example, they can have an aversion to traditional sales tactics.

“If a brand crosses them, they are hard to earn back as a customer,” she says. “It’s telling — the divorce rate doubled during the Gen X birth years.”

As another data point, 55% of startup founders are Gen X.

As for millennials, the rise of double income households really took off as millennials grew up.

“Millennials are collaborative, empowered, networked, risk averse and in search of meaning,” she says. “But America has more single parent households than anywhere else in the world. It’s one way to understand why work-life balance is at the forefront of recruitment and retention.”

For Generation Z, our present serves as the backdrop of their formative years. Already, Lear has seen how Gen X parents and Gen Z children have relationships rooted in friendship.

“They are highly influential over each other’s decision-making. For example, Gen Z will bring job offers to their parents to vet,” she says.

Lear continues with an example of how Generation Z makes decisions.

“They are showing how they can abandon any obsession of convenience with an obsession of optimization,” she says. “For example, a regular stationary bike is convenient versus a Peloton is synched with stats and analytics. It’s the expectation of personalization and customization.”

Lear gives an exercise to test your transgenerational communication.

“Look at processes, procedures and norms. What are you holding on that is a sacred cow? And then ask your team to think about where can we focus on that’s more useful and more productive for us?” Lear outlines. “You’ll identify priorities and open up how our team talks to one another.”

More and More Dairies Diversify to Survive

Tue, 04 Jun 2024 20:42:12 GMT

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.

With the current economy producing low milk prices and consequently little to no income, more and more dairies are exploring options to add alternative profit sources to cushion their bottom line.

According to Marin Bozic, assistant professor in dairy foods marketing economics at the University of Minnesota, many traditional dairy farms, whose incomes were based almost exclusively on milk and meat, will expand to enterprises with a multitude of revenue streams.

“We already are seeing elements of this conversion on some farms, and innovation will allow more to follow,” he says.

We asked surveyors what avenues they are exploring to generate added profit to help with their farm’s overall profitability, and the results showed that branded beef and agritourism are leading the way. The results also illustrated that just 18% of respondents currently capture revenue from on-farm milk bottling, cheesemaking, or ice cream production. All told, a substantial portion of producers do plan to begin these activities, with a fourth of respondents’ sharing they are aiming to add branded beef in the coming years.

With super strong beef markets, it is no surprise that nearly 60% of respondents say they are currently breeding dairy cattle to beef. Diversification appears to be an essential ingredient to the modern dairy. Of all the respondents, only 20% designated their operation as dairy-only, while others described their operations by including growing crops and using beef for revenue.

Interestingly enough, dairies with beef-on-dairy operations are more likely than dairy-only operations to say they are planning to grow or expand in some way.

Jacob Larson of Larson Dairy in Florida, says as the next generation of Larsons return to the family’s 5,500-cow dairy, they’ll have to explore what makes economic sense.

“The level of return on investment in this industry is tough,” he says. “The next generation is going to need some clues as to whether this is a good return for the investment or not.”

Selling “Liquid Gold” Adds Black to Dairy Farms’ Bottom Lines

Thu, 23 May 2024 19:01:08 GMT

When Travis Todd with Zinpro Corporation stopped at Linda Greenwood’s Canton, N.Y. dairy more than 16 years ago, she wasn’t very interested in talking to him.

“I thought, ‘Oh, no, here comes another salesman trying to sell me something I don’t want to buy,” Greenwood says.

But as it turned out, he was actually trying to buy something from her. Todd is in charge of Zinpro’s colostrum procurement program, which purchases colostrum from dairy farms and processes it into animal health and nutrition applications.

A Profitable Routine

“When I figured out what he wanted, I still told him no,” Greenwood says. She couldn’t imagine giving up valuable colostrum, which she needed to feed to the newborns at Greenwood Dairy, a 1,500-cow operation that she and her husband, Jon, started from scratch in 1978. Today, her son, Ted, and his wife, Hibby, also work in the business.

“Then I talked to another dairyman who was working with them. He told me they would take second-milking and heifer colostrum, which I was able to spare,” she explained. “So, I made a quick call to Travis, and he got me started. We laugh about it now; we’ve had a great relationship ever since.”

Today, Greenwood Dairy sells approximately 400 gal. of colostrum per month to Zinpro. It is stored in 4-gal. plastic, lidded pails supplied by the company and frozen in freezers also supplied by Zinpro. The farm’s only outlay is electricity to power the freezers, and labor to harvest and store the colostrum. The freezer storage area needs to be indoors in a climate-controlled space. Zinpro picks the colostrum up weekly, and brings a fresh supply of sterilized storage buckets.

After their initial postcalving milking, which is reserved for the dairy’s calves, the Greenwoods mark fresh cows with a green leg band, alerting the milking crew that the subsequent milking should be harvested for freezer colostrum. The extra effort is definitely worth the revenue procured by selling their excess liquid gold.

Colostrum Demands Soars

Demand for colostrum is exploding. A recent market assessment by Future Market Insights Inc. (FMI) estimated the global value of colostrum sold in 2023 was $1.49 billion. That figure is projected to see a compound annual growth rate of 6.5% for the next decade.

The applications for powdered, dehydrated bovine colostrum have spanned far beyond its original roots in nourishing calves. Colostrum is now being used in the human market for everything from bodybuilding supplements to baked nutrition bars, and protein powders to skin creams. Many health-conscious individuals also take it regularly via capsules, powder and chewable tablets.

FMI says colostrum is loaded with bioactive compounds and nutrients. It is a significant source of protein, and its antibodies are valuable in boosting immune systems and enhancing gastrointestinal health. Marketers also claim colostrum has anti-aging properties because it promotes cell regeneration and thus improves the skin’s suppleness and thickness.

Colostrum also has probiotic properties. A large percentage of consumers have embraced probiotics such as lactobacillus and acidophilus in an effort to prevent ulcerative colitis and colon cancer by supporting a healthy intestinal environment. Both are found abundantly in colostrum. On the animal side, calves aren’t the only creatures on the receiving end of colostrum products. Adam Geiger, manager of the colostrum division for Zinpro, says their colostrum ingredients also reach small ruminants, horses and companion animals.

Enabling Extra Revenue

“We continue to look for suppliers,” Geiger says, noting the company has 79 collection routes spanning 11 regions of the U.S. He says they are flexible in terms of farm size, but proximity along a route is necessary.

Farms that sell colostrum to Zinpro must have a comprehensive herd vaccination program and demonstrate that they adhere to sanitary colostrum harvest protocols. Geiger says they also are counseled to prioritize their own herd’s colostrum needs over sales.

A route driver picks up the frozen pails and delivers them to a Zinpro facility, where a patented process fractionates the fat and casein, increasing the animal’s ability to absorb immunoglobulin G (IgG). The resultant IgG level in Zinpro colostrum powder is a robust 50%, well above industry standards. Processing also includes a bacterial reduction step to ensure clean and consistent product quality.

Like Zinpro, Saskatchewan-based SCCL remains firmly in the animal market. “Collecting colostrum has become more common and competitive since its popularity has grown as an all-natural, bioactive superfood for human consumption and as an ingredient in many pharmaceutical and cosmetic products,” says Jeff Langemeier, USA sales manager. “But SCCL’s focus today is the same as when we were founded 30 years ago: developing innovative colostrum products and applications to optimize calf health and to create stronger herds and more sustainable dairy systems.”

Langemeier acknowledged selling colostrum into human and animal markets “is a growing opportunity for dairy producers to capture a diversified revenue stream, especially during times of low milk prices.”

Compensation plans vary, but conservatively, producers can expect to be paid at least double the commercial milk price for their colostrum.

Linda Greenwood estimated their annual colostrum-sales revenue at approximately $20,000. She uses a portion of those proceeds to keep her calf program ship-shape.

“If I want to order new calf jackets or feeding equipment, I’ve always got colostrum money to do that,” she says.

Pennsylvania's Painterland Sisters See Spectacular Success With “Side” Yogurt Business

Wed, 08 May 2024 19:54:38 GMT

When Stephanie and Hayley Painter started a yogurt business a couple of years ago to help support their family’s Pennsylvania dairy farm, they didn’t envision it quickly becoming the country’s fastest growing yogurt brand in the natural foods space. But that’s exactly what happened. Painterland Sisters Icelandic Yogurt is now sold in 2,200 stores coast to coast.

Stephanie explains how and why she and her sister achieved such success in a brand new podcast called Grow Getters , which explores “Agriculture’s most inventive side hustles.” Hosted by Davis Michaelsen and produced by Farm Journal Studios, Grow Getters takes a lively look at creative ways farmers are plugging into their passions and sometimes exploring new technologies to add revenue to their operations. In agriculture’s challenging economic climate, these resourceful “grow getters” are redefining what it means to be a farmer.

Watch episode one of Grow Getters here.

Forbes Magazine’s “30 Under 30" List

With their organic, nutrient-dense yogurt, made using milk from their farm and from nearby farms, the Painter sisters have taken moonlighting to a whole new level, even landing a spot on Forbes magazine’s most recent “30 Under 30” list .

“We saw cool, powerful women helping their family’s business on the Forbes 30 Under 30, so my sister and I looked at each other and said, ‘We want to do that,’” Stephanie explains on the first Grow Getters podcast. “We want to represent dairy. Farming, right? Agriculture. Wouldn’t that be amazing to make it relatable, to make dairy cool and fun to the general consumer?”

More than achieving accolades, however, the sisters’ mission is to connect consumers with the farmers who are producing their food every day. They’re also committed to continuing the succession process on the family’s fourth-generation farm, preserving and even increasing its value for the next generation coming up quickly behind them.

Read more about the Painter sisters and their exploding business.

Following its debut on May 7 with the Painter sisters, Grow Getters will release a new episode every other Tuesday. Blending stories of side-hustle highs and lows with plenty of humor and even some flashy singing and piano-playing by Davis, Grow Getters is like no other show in today’s ag media world. The goal of the podcast is to celebrate and match the unbridled moxie, energy and creativity of its guests. Subscribe to the Farm Journal YouTube page for the latest episodes.

A Big Future for Texas Dairy

Fri, 03 May 2024 17:19:49 GMT

Head to the Lone Star State, and everything is bigger, or so they say. That doesn’t only refer to big hats and big hair, it also applies to dairies, as the average size in the Panhandle hovers around 4,000 cows.

Beyond cow numbers, the theme of growth is consistent, although for some operations that doesn’t necessarily equal milking more cows. Many producers plan to increase cow numbers, while some share growth revolves around efficiencies.

The growth Texas has seen in the past two decades in terms of milk production is noticeable. Jennifer Spencer, AgriLife Extension dairy specialist and assistant professor in the Texas A&M Department of Animal Science, says Texas produced 1.65 billion pounds in 2023.

According to Juan Piñeiro, assistant professor and Extension dairy specialist with Texas A&M AgriLife Research and Extension Center, the Lone Star State will continue to increase cow numbers and milk production, especially in the Panhandle, over the next five years.

“When business is good, dairies continue to expand,” Piñeiro says. That’s why we have seen an increased rate of consolidation in the dairy industry, especially in the past 15 years in the U.S.

70% of Cows Live on 5% of Dairies

Net profits tend to be lower in smaller herds, Piñeiro points out, which is why 70% of the cows in the U.S. live on 5% of the dairies.

“This certainly holds true in Texas,” he says. “This statistic will continue to grow.”

But to grow, processing plants must also expand. With more than $7 billion in planned processing investments in the pipeline, including in states such as Texas, growth
is promising.

Spencer says four processing facilities are just opening or under construction in the state, which could increase demand for Texas milk:

Cacique Foods, a cheese plant, opened in May in Amarillo.
Great Lakes Cheese Plant in Abilene is scheduled to be completed in late 2024.
A milk processing plant in San Antonio to support H-E-B is under construction and scheduled to be completed in summer 2025.
Phase 1 of a Lubbock-based Leprino Foods cheese plant is scheduled to be completed in early 2026.

Piñeiro says it is difficult to predict what the future of Texas dairy will be with all the challenges facing dairies today.

“Although I do think there is room for growth in Texas with all the upcoming processing plants,” Piñeiro says, adding he believes most of the milk to fill the upcoming processing plant needs in the state will come from Texas dairy producers, but some might come from neighboring states such as southwestern Kansas or eastern New Mexico.

Labor Costs Eat into Profits

With oil industries, among others, competing for labor, finding workers is also a challenge for Texas dairy producers. This has led some to incorporate technologies and automation to reduce labor needs.

Although Tom Alger, one of the owners of A-Tex Dairy in Friona, Texas, says his dairy has fared well with labor. He says their challenge with labor has been the overall costs it takes to pay for workers.

“That’s inflation, though,” he says.

Originally from Chino, Calif., Alger and his family moved to Friona in 2007. The family decided to move east after the southern California dairy they rented was sold. Alger and his brother Ray went into partnership together and built a 3,200-cow dairy in the Texas Panhandle to provide an opportunity for the future generation to dairy.

“We have a larger dairy than I ever dreamed of,” Alger says, adding that the operation is in the process of slowly purchasing his brother out.

With God’s blessing, he says dairying has been mostly successful for them. They now milk 5,300 cows and continue to look at how to improve efficiencies to sustain the family dairy operation.

“We’ve gotten a little bigger in terms of cows and land, and we will see where the next generation goes,” Alger says, adding that they currently farm with his son Derek and his nephew Jeff.

Water Scarcity Presents a Hurdle

While Texas has more than doubled its cow numbers in two decades, the biggest challenge to push the needle and continue the steady growth curve is water scarcity. Piñeiro says this is the largest hurdle facing producers in the state.

“The Panhandle is a semi-desert, with roughly 12" to 18" of precipitation a year,” he says. “Improving water efficiency with the use of new irrigation technologies, drought-tolerant crops, hydroponic systems and management practices considering soil health, among other strategies, will be key in the future.”

Water was an issue when Alger moved to Friona in 2007, but now he says it’s a major challenge.

“The wells’ average flow rate is 400 gal. per minute, and today they might get 150 to 200 per minute,” he explains. “I’ve got some wells holding, while others are dropping quickly.”

They have plenty of water for the cows, but when it comes to the feed side of the equation, Alger says that is another story.

“It’s obviously a concern every year,” he says. “We look at what water we have available before we make the decision what crop go into the ground.”

Combating water issues, A-Tex Dairy grows fewer acres of corn and more drought-resistant crops, such as sorghum or wheat.

“Double cropping is not an option anymore,” he notes.

They own 3,500 acres and rotate crops to help feed their cattle. He says they’ll likely allocate 900 acres for corn silage this year.

Factor in limited rainfall, especially if you look at the past two summers in the High Plains area, and it is no surprise water is a main concern for its producers. A-Tex Dairy works with neighboring farms to purchase additional feed, and Alger believes they are well positioned for their 2025 feed supply. In addition, the dairy feeds a lot of gluten and distiller grain, along with some cottonseed.

Beef-on-Dairy is a Blessing

One area that has been a blessing for A-Tex Dairy is beef-on-dairy calves. The family started dabbling in this alternative profit source seven years ago, and for the past four years, the majority of their cows have been bred to sexed semen or Angus.

“We have very few Holstein bull calves,” Alger says.

They retain the beef-on-dairy calves at different weights.

“We sell some at 450 lb., some at 750 lb., and we retain ownership on some all the way down to the kill floor,” he adds.

Strong beef-on-dairy prices have helped keep the dairy in the black for the past couple of years.

“Milk certainly hasn’t done that,” Alger notes. “Right now, beef-on-dairy has been by far the most profitable for our operation.”

Looking to the future, Alger says they plan to start hedging prices for their beef-on-dairy calves.

“We need some protection because they are worth too much right now not to protect the high prices,” he says.

Another profit opportunity A-Tex is looking into is carbon. Alger admits they have had a couple of offers, but being a drylot facility, the offers aren’t as enticing as some of the modern dairy facilities.

“We are still exploring our options,” he notes. “I know there are opportunities out there. We are generally not the first to jump on something but typically not last either.”

This holds true with investing in technology, as Alger says they, of course, expect a return on investment when incorporating any technology into their dairy.

“Our focus is improving efficiencies,” Derek Alger explains. “We utilize EID tags and FeedWatch and are looking to incorporating a monitoring system.”

Producers have taken a hard hit with falling milk prices in 2023. Spencer says the uniform milk price fell from $23.68 per cwt in 2022 to $18.98 per cwt in 2023. The price of cheese averaged about $2 per cwt below both of those.

At the end of the day, Alger thinks dairy is still a good industry to be part of and says he believes, at this point, 2024 will be a decent year, especially considering feed prices are significantly lower than last year.

While there are several dairies in Texas that are positioned to grow in terms of cow numbers, Alger isn’t planning to grow his herd. For now, they will continue doing what they do best, which is striving to produce the most efficient milk possible to help set the farm up for the next generation of dairy farmers.

South Dakota Dairy Expected to Supply 1.66 Million Gallons of RNG with New Production Facility

Mon, 22 Jan 2024 17:35:28 GMT

With the dairy industry working towards the common goal of becoming carbon neutral by 2050, more and more producers are looking for ways to increase the sustainability efforts on their farms. One method some operations are capitalizing on is the ability to produce renewable natural gas (RNG) by the means of a methane digester.

Drumgoon Dairy, a 6,500-cow operation in Lake Norden, S.D., has done just that after recently completing a new RNG production facility in partnership with Clean Energy Fuels Corp. Finishing the project in December of last year, the facility has since begun injecting ultra-low carbon RNG into the interstate natural gas pipeline system. According to a company press release, Drumgoon Dairy is expected to supply 1.66 million gallons of negative carbon-intensity RNG annually to the transportation market when at full capacity.

“Completion of the RNG project at Drumgoon Dairy, along with several others that are right behind it, is already making a contribution to controlling harmful greenhouse gas emissions,” says Clay Corbus, senior vice president of renewables at Clean Energy. “Being a multi-generational operation, Drumgoon’s owners are always thinking about the future, whether it’s bringing in the latest technology to better track and monitor their cows or transforming their herd to antibiotic-free. Adding a RNG digester that captures the methane produced by Drumgoon’s cows and turning it into a clean fuel is the ultimate recycling project.”

How It’s Made

While dairy cows are known for their ability to make milk, they’re also scrutinized for their ability to produce methane, a potent greenhouse gas (GHG) emission. According to the Environmental Protection Agency, agriculture accounts for nearly 10% of U.S. GHG emissions. However, the dairy industry plays a big role in being part of a global climate solution.

“Renewable natural gas is chemically the same as the natural gas you might get in your stove, but what makes it renewable is that it is sourced from landfills or dairy farms ,” says Will Flanagan, vice president of strategic development at Clean Energy. “What we’re doing is gathering manure and putting it in a digester, which captures the raw methane, or biogas, that would otherwise be going into the atmosphere. Then we pipe that raw biogas to an on-site gas processing plant where we clean it up by taking out the unwanted constituents.”

Once the methane has been converted into RNG, it is injected into a local natural gas pipeline and distributed to one of Clean Energy’s 540 fueling stations.

A Dynamic Partnership

The Drumgoon Dairy $38 million RNG digester project was financed through Clean Energy’s joint venture with bp, developed with Dynamic Renewables, and is one of several RNG projects the three companies have partnered to build at dairies throughout the Midwest. Clean Energy is purchasing RNG from approximately 100 dairies across the U.S. and all the RNG produced at Drumgoon will be available at Clean Energy’s fueling infrastructure.

Clean Energy’s sales of RNG into the transportation market for the first nine months of 2023 grew 17% over the same period of 2022, and with customers such as UPS, Republic Services, LA Metro, Knight Swift, Amazon and others, the demand of the ultra-clean fuel is expected to expand.

For more on sustainability, read:

The Reason Behind John Deere and DeLaval’s Sustainable Partnership

Mon, 20 Nov 2023 20:46:35 GMT

Earlier this fall, two well-known companies, John Deere and DeLaval, joined forces and formed a strategic partnership to create the Milk Sustainability Center (MSC). This cloud-based ecosystem will be open for partners to join to provide dairy producers with the data they need for a holistic view of their operation.

MSC is designed to monitor nutrient-use efficiency (NUE) for nitrogen, phosphorus, potassium and carbon dioxide equivalent (CO2e) across the producer’s entire farm, specific fields or within just their herd. The MSC will allow farms to benchmark their performance to other dairy operations and identify areas for improvement.

Industry Benchmarks

James Petersen, dairy and livestock technology integration manager with John Deere, shares some people think sustainability isn’t profitable, but he begs to differ.

“There is plenty of data out there to suggest differently,” he says, sharing how strict European regulations could eventually come across the pond to the U.S. “There could be requests from the government, so if you don’t get on board with this today, you are likely to be out of business tomorrow.”

Data from John Deere Operations Center and DeLaval can be automatically pulled into the MSC to reduce manual input and ensure high data quality. Dairy farmers, consultants, dealers, and other partners can also be invited to view data in MSC.

Petersen says a big part of the sustainability center is the benchmarking feature that producers really want to know more about.

“Essentially, you can get benchmarking data from operations of your scale and size to understand here’s where I’m at, but am I good enough and where do I currently stand,” he says. “Being able to benchmark yourself gives you goals to shoot for at the end of the day.”

Darius Lane, public relations manager at John Deere, shares both John Deere operators and DeLaval have been collecting data on how farms run economically—from inputs, fuel, fertilizers and chemicals—everything that goes into the land, as well as the cows.

“In order to tell that overall profitability and sustainability story, we need to merge those two data sets to draw even more insights about how the farming operation is performing and how you producers can achieve and set some of those goals they want,” he says.

Mutual Values

Lane says it all started with a conversation with the two companies that have very similar goals in mind.

“When we started talking it all just made sense,” he says. “DeLaval was looking for that holistic picture as well. We didn’t know anything about the animals, and they didn’t know anything about the agronomics, and it was a perfect marriage that’s come together with a long-standing partnership here.”

Lars Bergmann, executive vice president of digital services at DeLaval, calls the partnership a match made in Heaven.

“We are quite honored to be working with John Deere,” he says, adding that they welcome other industry companies and organizations to join the MSC.

“We want to make this inclusive,” he says.

Bergmann says dairy farmers are seeking ways to decrease their environmental footprint and improve sustainability.

“The Milk Sustainability Center will help dairy farmers achieve their goals and address growing needs of dairy processors, retailers, government, and ultimately, consumers,” he says.

The initial version of MSC will be released in summer 2024 and will be free of charge. The companies said a more advanced, premium version with extended capabilities will be released at a later date.

Virginia Family Ice Cream Business Gives People a Reason to Stop

Wed, 31 May 2023 15:09:12 GMT

The Fields of Dreams slogan, ‘Build it and they will come,’ rings true for Virginia dairy farmer Ken Smith. But he would also add, ‘Give them a reason to stop by.’ The fourth-generation dairy farmer was referring to his quickly growing ice cream business that he and his wife, Pam, and their daughter, Amy, built in 2010 at a one-stoplight location off Route 29 that is near their family dairy. A true family affair, their daughter, Taylor, makes all of Moo Thru’s ice cream.

In 2006, the family purchased an old truck stop property nearby the family dairy farm and began building their ice cream business, Moo Thru. Ken shares that the opening week, they ran out of ice cream.

“We sold 15,000 cones in the first three weeks,” he says. “People asked if we’d franchise this, and we’d only been open 60 days.”

The Smiths sold the family dairy, Cool Lawn Holsteins, a 1,000-cow dairy with a 30,000-lbs. plus herd average to their son, Ben, so their attention could go towards their ice cream endeavor.

A Little Vision

Moo Thru started as an antique building that was modified to resemble a barn. Ken shares that the idea for this all began on a hot Saturday afternoon when he was sitting at an intersection with a load of haylage.

“I was miserable,” he recalls, sharing that others driving by were smiling and seemed happy.

“They have weekends to spend money,” he says, and his ah-ha moment went off.

The idea was born to start construction on Moo Thru, although Ken says neighbors thought he was crazy to tackle this new adventure.

“Everyone thought I was nuts and that no one was going to come to this. That there are no other stores and no other conveniences nearby,” he says. “Nothing is out here. Why would they stop?”

It’s a good thing that Ken possessed a bubbly personality and the ability to think differently than most. He says if you give people a reason to stop, they’ll stop.

“They’ve got money in their pockets. They’re going somewhere to spend that money,” he says.

Fast forward to today and Moo Thru has been recognized as the best ice cream place in Virginia, an accolade that the Smith family is proud of.

Continued Success

“We do the promotion, and we eat ice cream and we have tested our product against everyone else,” Ken shares. “The only way I can keep selling my product is knowing how I compare to the rest.”

Today, Moo Thru has a drive-through, which Ken says grew their business, especially during Covid.

“Nobody could go anywhere, but they could go through a drive-thru and people would sit and wait for ice cream,” he shares. “There would be 50 to 60 cars deep and people would wait in line for over an hour.”

This caused a backup that blocked the intersection which eventually led to the Smith family hiring local deputies to help control traffic.

While Route 29 still only has one stoplight today, those traveling 60 mph on the two-lane road can see the hopping attraction that causes many to make the turn and stop in and enjoy what the Smith family has built.

“They don’t have to wait for the light to turn red to notice,” Ken notes. “They make the turn.”

Moo Thru now has a food truck that can be utilized at events, as well as four additional Virginia locations in Charlottesville, Hillsboro, Winchester and Warrenton. All locations serve ice cream made from the family herd at Cool Lawn Farm.

The Power of Pulling Together

Wed, 31 May 2023 13:30:00 GMT

The success of dairying is often a reflection of hard work, mutual respect and everyone pulling together for a common vision. Tucked in the rolling hills of a quaint New England town, Fairholm Farm in Woodstock, Ct., a century-old farm’s recipe for success also includes technology and securing additional profit sources.

Future Plans

When Erica Morin-Hermonot traded the Northeast for the Upper Midwest to attend college at the University of Wisconsin—River Falls, she was unsure of her future path, thinking no way it would be in the dairy industry. Although, spending time with fellow classmates with similar roots made her think differently and led to conversations about having her come back to the family farm, which she did, as the farm’s herdsman in 2007.

“We weren’t sure how the farm was going to go,” Erica says, sharing that her farm’s facilities were dated. “We had another business running at that time and we weren’t sure if we were going to downsize or keep going with the dairy. Then, I decided to come back home.”

The family’s facility was originally set up for 200 cows, milking in a double-six, but in 2015 their neighbor sold out and their cows became available. The family decided to purchase those cows and milking occupied nearly 17 hours of their day.

“We actually had parlor plans drawn up,” Erica explains, but labor market challenges made the family reconsider.

We liked the consistency that robots provided, along with the information. However, with no previous automation on the farm, the family knew this transformation would be a learning curve.

Erica says the family jumped headfirst into automation and invested heavily in technology with cow activity collars, four DeLaval robots, a feed pusher and alley scrapers.

Today, Erica, her husband, Jon, and her parents, Todd and Diane Morin, are all managing partners in the dairy. In addition, the farm employs four full-time and two part-time workers. Fairholm is also in partnership with close relatives who also have a family dairy farm and they share ownership of farming equipment and work together with the cropping operation. They also grow about 800 acres of corn silage and haylage, and have made improvements to help hone in on efficiency over the last decade, including a new close-up barn, shop, and manure storage.

Challenges Ahead

Nearly 30 days after COVID hit, like many in the Northeast, Fairholm Farm was hit with a quota, and responded by selling 40 cows and looked at alternative revenue sources. This meant purchasing 20 pigs, which they would raise on milk and sell locally.

After a string of challenging years, in 2021 Erica started a farm camp for kids, a long- time dream of hers.

Now in its third year, Farm Camp provides a landscape that allows children to explore and connect with agriculture.

“Children learn all about the animals, land and teamwork it takes to care for a modern-day farm,” Erica shares.

Woman Power

In 1920, Diane’s grandparents Ethal and Estella Barrett purchased the farm after he got out of World War 1 and after she graduated from Wellesley College.

“This was unheard of for women back in those days,” Diane remarks, sharing that her grandfather passed away at a young age.

“Grandma just kind of took over,” Diane shares, explaining that her father George and his two sisters helped out, too. “My father finished high school and didn’t have to go into WW2 because of the farm, and his sisters took jobs off the farm, but always helped when they could.”

In 1958, George and Celia married, and the newlyweds began to build up the family dairy farm. Diane and her siblings grew up and also worked on the farm. After battling an illness, George passed away at the age of 64 and Diane felt compelled to continue.

“With Celia not knowing much about dairy, we stuck together to help out,” Diane shares. “Mom took on a new role and did jobs she never thought she could.”

While lending an extra hand is what farm families often do, Erica says her three children are now at the age where they can do more and help feed calves.

“Should they choose this lifestyle, I think it’s awesome to think that they could be the fifth generation,” she shares. “The best we can do is make sure it is a good business.”

The family shares that while the industry has certainly changed over the last 100 years, they never want the decision not to farm to be forced upon them.

“It is something that we came to terms with when we decided to reinvest in the farm,” Erica says. “We’ve tried to be very strategic about every decision we’ve made - whether it be robots, buying the neighbor farm or starting a new part of our business.”

Helping Hands

Despite working long days, the family also has been very involved in their local community.

“My mother was a 4-H leader for nearly 20 years, along with being active in church and a director for our local fair,” Erica, who serves as her local fair’s Birthing Center superintendent, says.

The mother-daughter duo explains that having a solid structure around them and support from their spouses has allowed them to take leading roles on and off their family dairy.

“We are reminded that even on the hardest days, we get to do this and there are some people who can’t anymore,” Erica says. “We’re very blessed that we have this opportunity.”

Working hand in hand, the Fairholm Farm family knows that their main key to success is pulling together as a family unit. They hope this will help them sustain their farm to its next mile marker.

Dairies Are Asking This Question: To Build or Not to Build

Tue, 30 May 2023 13:09:00 GMT

A few dairies have pushed pause on building projects due to interest rates and market uncertainties. Others are stuck in limbo not knowing whether to move forward or wait it out.

According to Don Mayer, district manager for the upper Midwest with DeLaval, the slowdown of some building projects is largely due to high-interest rates and building costs. He adds, “While interest rates are higher than they were over the last couple of years they are not terrible.”

Curtis Gerrits, a senior dairy leading specialist with Compeer Financial says that dairies who have had the plans in place to do improvements—whether that is to expand or enter construction—are moving forward for the most part.

“The main focus has not necessarily been on interest costs but rather what the return on their investment would be,” Gerrits notes. “These dairies typically have planned capital investment projects 1-3 years out and have built a business model to sustain these projects even if/when interest rates and material pricing are inflated compared to historical averages.”

Chad Huyser, president of Lely North America concurs with Gerrits, stating that while current economic factors have impacted them so far in 2023, they are working with dairies who have decided to push forward.

“Many dairies are moving forward with their plans,” he shares. “Whether rising interest rates or volatile inflation metrics, dairies and their lenders are being very practical when it comes to the investment strategy on these long-term CAPEX type investments. That said, investments in facilities and technology can bring about efficiencies, improved cow comfort/health and more enhanced data to help make better decisions related to the cost drivers of producing milk and supportive of cash flow.”

Huyser adds that 2023 continues to look to be a positive year overall for Lely.

“We do see some headwinds developing in the short term (i.e., interest rates, inflation, etc.) but overall, we continue to be very optimistic about the future adoption of technology and dairy automation solutions,” he states.

A producer recently told Mayer that the first three loans he received for farming hovered around 10% interest.

“He told me that if rates go down in the next 12 to 24 months he will refinance,” he shares. “In my opinion, there is a shortage of skilled builders for dairies, many contractors are booked 12 and 18 months out.”

Gerrits says dairies are continuing to talk with their builders on projects for the second half of 2023 and into 2024.

“Most reasonings on delaying projects are surrounding contractor scheduling availability, interest costs from a cash flow perspective, processing capacity (for milk cow housing), and the current dip in overall milk price,” he says.

Gerrits shares that he is mostly seeing building projects that include:

Added on-farm heifer housing.
Improvements to existing facilities such as ventilation, steelwork (headlocks and freestalls), and automation (herd health automation).
Dry cow housing upgrades and additions.
Some milk cow housing (this has been limited primarily due to milk processing capacity)

Mayer adds that one major challenge producers are struggling with is finding a milk market.

“I have a customer who would like to go from 500 to 1,000 cows however their coop will not take the additional milk,” he says.

Want to Grow Your Farm? Ask These 10 Questions First

Wed, 17 May 2023 19:57:51 GMT

More than 50% of farmers intend to grow their operation, based on responses in Purdue’s February 2023 Ag Economy Barometer.

(Farm Journal)

If you’re thinking about scaling your farm, Michael Langemeier, Purdue ag economist, says it’s important to first ask these questions.

1. Why should I grow my operation?

Before an operation expands, consider the vision and direction you want your farm to take.

“Are you interested in a commodity-based approach or a differentiated product strategy? Commodities will focus on cost control while products will be centered around value-added production and above-average prices for your crops,” Langemeiers says. “Start here and consider how growth impacts your direction.”

Once an approach is chosen, it’s time to decide which dominoes you want to play in the expansion game.

2. What ways I can grow my farm?

There are many ways to expand an operation: acquire land, new equipment and technology, upgrade facilities, etc. However, Langemeier says some producers need to think outside the box.

“Don’t just think about what you currently do or have always done. This step is a good time to do some soul searching to consider where you want to be in five to 10 years. Do you want to be the same enterprise, or do you want to make changes?”

Langemeier says this soul-searching step is especially important when someone is coming back to the farm.

“We’re seeing that a lot of students who come from farms want to go back, and we have to look into whether there are opportunities there or not,” Langemeier says. “There’s always new interest and ideas that come with the transition back to the farm.”

After establishing how you want to grow, consider your growth approach.

3. What should my growth approach look like?

A strengths, weaknesses, opportunities and threats (SWOT) analysis is a common growth approach in business. Langemeier says another way to think about SWOT is in terms of internal and external analysis.

“Internal analysis means looking at key resources and capabilities of a team or operation,” Langemeier says. “Does someone possess a unique skill you can maximize? Take advantage of those unique skillsets.”

Internal analysis mainly centers around strengths, but weaknesses play a role here, too. Are there areas in your operation that need professional development? Langemeier says this is the time to work on both.

External analysis, on the other hand, examines economic and market trends.

“The easiest example is in livestock; raising pasture pork, poultry or beef, or offering direct meat from a producer rather than a grocery store, are all growing trends,” Langemeier says. “If you have those opportunities, think about how they might fit into your operation.”

While there’s more risk in external factors, Langemeier says “the risk can be worth the reward” for producers who understand what trends they can support.

4. How do I evaluate my farm’s growth ventures?

Now that the growth options are laid out, how does a producer choose which option to pursue?
These eight criteria can help:
• Strategic fit
• Expected returns
• Risk
• Capital required
• Cost and ease of entry and exit
• Value creation
• Managerial requirements
• Portfolio fit

Strategic fit is one of the biggest points to consider, according to Langemeier.

“A few years ago, many growers were interested in hemp production. I would ask them if hemp would require new machinery and if they were used to dealing with contracts,” he says. “If the answer was yes and no, then it probably wasn’t going to be a good fit.”

He says ease of entry and exit is the second criteria he points farmers to.

“If your farm were to pursue a new venture and it fails, would it mean you could lose the whole farm? Because there will be things that fail,” Langemeier says.

If a specific venture requires a lot of capital, he says it is pivotal to explore how the investment could affect balance sheets in the long run.

5. What skills are needed to grow, especially in people returning to the farm?

Taking stock of employees’ skillsets, this is the part where growers consider the strengths and weaknesses of human capital currently on the farm and those soon returning to it.

“When someone’s thinking about coming back to the farm, that’s the time to assess the skills that are currently needed, and then try to encourage the younger person to garner some of those skills,” Langemeier says. “We might have the skills to expand our operation, but do we have the skills to start a new venture in a different enterprise? Think about it from all angles.”

6. How do I finance?

Are you willing to take on debt to expand? If so, how much debt are you willing to take on? Langemeier suggests looking at debt as enabling you to take advantage of an opportunity, not as a negative.

“If you have 2,000 acres and are thinking about adding 1,000 acres, even if that’s leased ground, you’re still going to need more machinery and people. You probably don’t have that retained earnings, so you’re going to take on debt,” he says. “As long as you’re making a profit on those additional acres, and you can make the debt payment, it’s not a problem.”

Langemeier warns that a small profit margin can quickly turn into an issue when a venture flops. He advises producers keep a somewhat equal balance of debt and projected venture profits.

7. What business models do I use to grow?

Expanding internal growth with retained earnings and debt is a typical business model for most operations, according to Langemeier. He says there’s a new trend in this arena.

“I’ve seen a lot of production ag cases recently where a farm acquires assets from a retiring farm,” he says. “Not only do they farm the land, but they also buy the machinery, the bins and the whole farm. This really works for some operations.”

Another model that’s becoming somewhat common is a joint venture. Agribusinesses use this model frequently, but Langemeier says more mid-sized operations are leaning toward this option.

“One of the advantages of joint-venture contract turkey, laying or finishing operations, especially in the Corn Belt, is that there’s a partner with you,” Langemeier says. “It allows us to grow effectively.”

Finding a partner to go-in on the venture isn’t always easy. However, Langemeier says producers often look in the wrong places.

“Some farmers say they don’t have any outside investors, so I tell them to think about family or non-farm heirs. Pitch it as a way of investing in your business so that you don’t have to make them partners or an operating entity,” he says. “Land, for instance, could be an outstanding source of outside equity with non-farm heirs.”

8. How would an expansion impact my current operation?

When considering growth options, it’s vital to your growth success to consider how each option will impact the farm’s balance sheet and income statement. Langemeier suggests running three projected scenarios — worst, most likely and best case — through a spreadsheet or a software, like the University of Minnesota’s FINPACK system .

If you choose to run the projections by hand, this is the process Langemeier suggests:

a. Impacts on cash flow and balance sheet

“A growth change will impact both — don’t just look at cash flow,” he says.

b. Debt versus equity

“Maybe the change will reduce your liquidity and increase your solvency too much,” he says. “If that’s the case, you can’t pursue that particular venture.”

c. Time management

“There are only so many hours in the day, and some of us sometimes work too much,” Langemeier says. “Say you’re going from conventional to organic, it’s going to be management intensive. Be realistic about what you and your team can handle.”

9. What challenges would an expansion create?

Construction delays, cash flow shortages, depleted working capital, short-term inefficiencies and management bottlenecks are often at play when starting a new venture, according to Langemeier. He advises producers to be proactive.

“If a venture creates massive cash flow shortages and eats into your working capital, you need to have a plan to deal with those issues. If you don’t, it will lead you into other challenges, like inefficiencies, and you’ll end up with a failed venture,” he says. “Make sure you have a contingency plan.”

10. What is my sustainable growth rate?

Calculating a sustainable growth rate means saying what a growth rate would be if retained earnings is the only money used, and then compare that to what a growth rate would be if only debt was used. Langemeier says this equation has other variables that often go unchecked.

In the debt scenario, he says you have to think about the downside of debt — the chance of going bankrupt and variability.

“Even if your operating cash flow is low, the lender still wants his payments,” Langmeier says. “You have to think about the coping strategies to make those debt payments even when corn is at $5, compared to $6.50. Make sure you run all the numbers imaginable.”

The Main First Step When Considering Expansion

With all 10 points in mind, Langemeier says the first stage of growth shouldn’t include producers running to formulate a 50-page business plan. He says step one starts with a conversation.

“You should be having regular farm and family meetings, at least once a year, to brainstorm with your employees and family members about the things you could do differently on-farm, and allot time to consider continued improvement, opportunities and threats,” he says.

According to Langemeier, these meetings will offer more than exploring growth; they will ensure farm, family and employee survival.

How Can I Make Money with Beef-on-Dairy?

Wed, 29 Mar 2023 20:17:16 GMT

With drought and production costs pushing the native beef population to a record low, beef-on-dairy has a huge opportunity to keep the feedlots and processors at full capacity. This also means the demand – and prices – for beef calves are at a high. Lauren Kimble, manager of ProfitSOURCE and LCT Supply Chains with Select Sires, offers five tips on how producers can capitalize on these prices.

Know Your Buyer

Building a relationship with your calf buyer is a great way to gain visibility and make some noise for your high-quality beef-on-dairy calves. Get to know them – where are these calves headed? What does that system want? Use beef genetics that not only allow for easy calving, but also address the specific beef supply chain needs.

Calf Care

One of the perks of beef-on-dairy is that the calves are born in controlled environments – and we know that dairy producers are experts at rearing newborns. Colostrum management at birth is vital as these calves, unlike native beef calves, undergo serious change within the first few weeks of life, adjusting to the stresses of transport and new home(s).

Trace It

Offering some level of traceability demonstrates the added value of both your genetics and calf care by making it possible to validate lifetime performance. While calf prices are high at the moment, the beef-on-dairy market is rapidly evolving – and many buyers feel that a high quality, traceable ‘program’-type calf will become the norm, with everything else being discounted.

Advanced Repro Technologies

Got repro success? Using sexed male semen or even transferring full beef embryos into your lower genetic merit females are both opportunities to capture value – especially if your market is discounting heifer calves, or your Jersey crossbreds are not worth as much as they once were.

Different Marketing Streams

If you’re able to retain and raise your calves to a higher weight, marketing direct-to-feedlot can maximize on all the above tips.

Advice from a Calf Ranch

Amanda Arata, general manager with Kansas Dairy Development (KDD) in southwest Kan., oversees more than 65,000 heifers in a custom facility. She says the following is vital for the calf—whether it is a dairy or beef cross to make a good start before it is transported to the calf ranch.

The calf is born in a clean calving area.
The calf receives high-quality colostrum.
A solid vaccination program was used on the dam.
Ensure the calf is warm and dry.
Make sure it has had several feedings in it before being transported.

With beef calf prices hot, it’s time to not only capitalize on them now, but set yourself up for success in the future.

From Farm to Fuel: Dairy's Role in Supplying Renewable Natural Gas

Tue, 07 Mar 2023 17:27:40 GMT

What goes in, must come out. That’s the saying every dairy farmer knows all too well as they deal with manure on a daily basis. While this byproduct of making milk has commonly been seen as a nuisance, some dairy farmers are using it as a tool to generate additional income for their farms, and the results make sustainable sense both on a financial and environmental front.

Nestled between Amarillo, Texas and Clovis, N.M., you’ll find Del Rio Dairy, an 8,100-cow operation outside Friona, Texas. While the town might be small, the dairy set big goals in 2021 to convert their manure into renewable natural gas (RNG). Those goals are just about to become a reality.

“February 14 is the first day we’re actually going to be putting gas in the line,” says Rocky Gingg, who farms alongside his wife, Liz, his daughter and son-in-law, Crystal and Nathan Moroney. “It’s exciting to see this all come to life.”

Just two years prior, Gingg was approached by Peter Drasher, a developer for Black Bear Environmental Assets who was familiar with working on methane digester projects. Drasher had just installed a digester for friends of the Ginggs, the VanHofwegens, on an Arizona dairy, and they suggested he reach out to Del Rio Dairy as the next potential candidate.

Gingg was intrigued by the opportunity and agreed to give the project a shot.

“Peter introduced us to all of this,” Gingg says. “He knew we were the right size and in the right location. He’s the one who helped us partner with Clean Energy.”

Clean Energy Fuels, a natural gas distribution company in Newport Beach, Calif., is no stranger to working with dairies. The company specializes in transforming manure methane emissions into RNG and is the largest provider of RNG to the transportation industry.

“We have fueling stations in 40 different states, and we’re buying gas from just about every major dairy region in the country,” says Clay Corbus, senior vice president of strategic development at Clean Energy. “We’re forging partnerships with dairies because we believe RNG is a sustainable solution for the transportation industry, and who’s more sustainable or better to work with than dairy farmers?”

How It’s Made

While dairy cows are known for their ability to make milk, they’re also scrutinized for their ability to produce methane, a potent greenhouse gas (GHG) emission. According to EPA, agriculture accounts for nearly 10% of U.S. GHG emissions. However, the dairy industry plays a big role in being part of a global climate solution.

“Renewable natural gas is chemically the same as the natural gas you might get in your stove, but what makes it renewable is that it is sourced from landfills or dairy farms,” says Will Flanagan, vice president of strategic development at Clean Energy. “What we’re doing is gathering manure and putting it in a digester, which captures the raw methane, or biogas, that would otherwise be going into the atmosphere. Then we pipe that raw biogas to an on-site gas processing plant where we clean it up by taking out the unwanted constituents.”

Once the methane has been converted into RNG, it is injected into a local natural gas pipeline and distributed to one of Clean Energy’s 540 fueling stations.

A Nationwide Project

Clean Energy is purchasing RNG from approximately 100 dairies across the U.S. and is actively building digesters at seven dairies this year. One of those is South Fork Dairy, owned by Evan Barton in Newark, Ohio.

“We’re set to break ground on the project this spring,” Barton says. “If everything goes right, it should take six months to a year to build.”

Barton, who milks 2,500 cows just 40 miles east of Columbus, began conversations with Clean Energy in 2021.

“When we first started talking, the biggest hurdle was making the digester profitable while still being able to bed with sand,” Barton says. “Digesters are more profitable if you bed the cows with manure solids, but I didn’t want the profit of the digester to be offset by a loss in health and performance of the cows. In the end, we found a way to keep the cows on sand bedding and still have a viable digester project.”

Finding an engineer and determining costs was another big step in the process. Fortunately, grants were available to help bring down the cost to build the digester.

“Nothing happens overnight,” Barton adds. “I will be a partner in the project, so there are a tremendous amount of contracts along with partnerships and operating agreements. All of those things take time, but in the end, it should all be worth it.”

The Benefits

In today’s world, companies and consumers are hyperfocused on sustainability. However, dairy farmers have been focused on sustainable practices since the beginning. Now, as the need to become more sustainable grows, farmers can capitalize on their efforts.

“We take great pride in the sustainable way in which we operate,” Gingg says. “By adding a RNG digester to our operation, we will be able to say to future generations that we are helping to address serious climate issues that impact the world they live in.”

Helping to power the transportation industry by using the methane captured from farms not only helps a farm improve its sustainability efforts, but also has the ability to generate additional income.

“Once the finances start coming in, and as it gets harder and harder to be profitable in the dairy industry, we could make more money selling gas than we make selling milk,” Barton says. “There’s going to be a return on investment for us, plus we’re going to be more sustainable because of it.”

Flanagan notes there are environmental benefits that also stem from producing RNG. These include:

Reduced runoff
Less odor
Fewer GHG emissions

Besides the environmental benefits, Barton is excited to see how this sustainable journey helps propel his farm forward, especially in the eyes of the consumer.

“We have a lot of neighbors; I believe the digester project and processing of the manure will reduce the odor of the effluent that gets spread on the field,” he says.

Barton believes this project will also help him with public relations.

“I don’t want my cows to be demonized in the media and political arenas for the methane they produce,” he adds. “I think this
project helps eliminate that concern and makes us part of the environmental solution, rather than part of the problem.”

A Promising Future

Grit, determination and an open mind are required to be successful and persevere in the dairy industry. Both Del Rio Dairy and South Fork Dairy are prime examples of operations that are making investments today for a better tomorrow.

“A big part of why we’re doing this is because it provides another stream of revenue to help us be more profitable and sustainable from a business standpoint, especially as margins continue to thin,” Barton says. “If we can’t be profitable, then we can’t farm. And we want to be able to keep doing this for years to come.”

Gingg agrees, adding the benefits, in his eyes, go beyond working toward a better environment and a better bottom line.

“It helps solidify the opportunity for the next generation to be able to come back to the farm,” Gingg says. “This is something my daughter and son-in-law want to be a part of, and this project gives us the ability to do what we love for generations to come.”

Clean Energy Statistics

Like the dairy industry, Clean Energy is dedicated to being a part of the global climate solution. That’s why it’s committing to becoming a zero-carbon company by 2025. So far, its sustainable statistics include:

25,000 vehicles are fueled by Clean Energy daily with renewable natural gas, across all transportation sectors from heavy-duty fleets, to refuse trucks, to transit buses.
70% of GHG emissions are reduced with RNG when compared to diesel.
90% of tailpipe emissions are reduced with RNG versus diesel.
Major fleet partners include UPS, Republic Waste Management and Amazon.

For more on sustainability, read:

Beef-on-Dairy Continues to See Major Growth

Fri, 20 Jan 2023 16:02:11 GMT

With the demand for beef up, more dairy producers are crossbreeding poor genetic or less productive cows with beef semen. This isn’t something new, as producers have increased beef genetics usage for various reasons. But over the past few years, dairy semen sales have idled while domestic beef sales have exploded.

According to Larry Corah, professor emeritus with Kansas State University, dramatic change has unfolded on the beef-on-dairy world in the last five years. From 2017-2022, the beef-on-dairy cross calves have replaced 70% of the Holstein steers in the fed cattle harvest mix.

“The main reason given is the dramatic increase in use of sexed semen by dairy producers,” he says.

Corah says another big reason was due to three of the four major packers quit harvesting Holstein steers, devaluing the Holstein steer market value.

Holstein bull calves sell for little compared to beef-on-dairy cross calves selling for four to six times more, up to $250, making this a new profit center for many dairies.

“At feeder weight of about 500 to 600 lbs., the beef-on-dairy cross calf is about $12-15/cwt below a beef calf of the same weight, but the Holstein steer is $40/cwt below, according to data from Superior Livestock and Kansas State,” Corah says. “Economics drive change and it is easy to see why the use of beef genetics has been adopted so widely and rapidly by dairy operations.”

A Packer Perspective

Kim Herinckx is the vice president of food safety and quality for One World Beef, the largest scale slaughter processing facility in southern California. They prominently handle dairy or dairy influenced cattle and specialize in grain-fed Holsteins, Wagyu and beef-on-dairy dairy cross cattle. They are the second-largest exporter to Japan, Chile and China.

Many feedlots that funnel into One World Beef are located within 80 miles, although some cattle come from Colorado, Kansas and Texas. Regardless of where the cattle originate, Herinckx says the communication between the packer and feedlot is constant, with daily communication and frequent site visits to ensure quality and data points.

“The problem we’re running into is that some traditional feedlots get black cross animals in, and they are feeding them like a traditional black animal, and it simply doesn’t work,” she says.

During meetings with the rendering division, Herinckx says one comment that has stuck with her, and she believes is a takeaway for every producer to remember is, “If you want value out of your byproducts, you have to stop treating them like a byproduct.”

Creating a syncretistic relationship with the dairy producer can help develop a brand program, Herinckx notes, and helps it go from a byproduct to a go-to product. She says this is a fundamental shift and that dairy has always been the winner when it comes to addressing consumers’ demands.