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Many in dairy industry say big, small farms can coexist

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Big Dairy on the Prairie

Nebraska dairy farmer Todd Tuls plans to break ground in March for what will be the biggest dairy operation in Rock and Walworth counties.

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Bob Cropp

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Tom McClellan

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Randy Thompson

BRADFORD TOWNSHIP — Plenty of barns stand along Highway 14 east of Janesville.

Red ones, white ones. Barns faded to gray. Take your pick.

What you won't see along the highway are very many cows.

Rock County's agricultural base is strong, but it leans heavily toward cash crops, said Casey Langan with the Wisconsin Farm Bureau Federation.

Today, 12,500 milking cows live on 123 farms in Rock County, UW Extension Dairy and Livestock Agent Randy Thompson said. That's half the number of cows milked in the county in 1970, Thompson said.

A handful of the county's biggest operators own half the cows in the county, Thompson said.

Rock County isn't alone.

Wisconsin's milk production peaked in 1988 at 25 billion pounds. By 2004, the number had dropped to 22 billion pounds, said dairy economist Bob Cropp with UW-Madison.

With tax credits and infrastructure investments starting in 2005, the Dairy State has turned a corner and in 2009 broke its own record by producing 25.3 billion pounds of milk. That's 3.1 billion gallons.

Again, Rock County could be joining the new trend.

The owner of Nebraska's biggest dairy herd, Todd Tuls, wants to build a 5,200-cow dairy farm on Highway 14 east of Janesville in Bradford Township.

Tuls has applied for the necessary permits from the town, the Wisconsin Department of Natural Resources and Rock County.

If all goes as planned, Tuls will break ground in March on the 160-acre site at Highway 14 and Scharine Road. The new business would bring the total number of cows in the county to 17,700.

Rock County hasn't had that many cows since the early 1990s, according to UW Extension data.

Many dairy industry experts agreed that Tuls' plan is good news for the cash croppers and dairy farmers already producing in Rock County.

Rock County's fertile soils are so conducive to crop production that the county has become a little "like Illinois and Iowa," Langan said.

"But it is definitely part of the state that can support more livestock," he said. "It's really a logical fit."

Locally produced grain can be fed to local cattle, and locally produced manure can be "fed" to local crops, Langan said.

Adding 5,200 cows would add diversity to the local agriculture market and could diversify the crop rotation in Bradford Township, Langan said.

"This is simple economic development," Langan said. "A dairy in such a crop-intensive part of the state is really the sort of value-added business structure that lots of people say they want."

Cropp said such diversity will be the key to continued success.

"You're going to see the strength of Wisconsin's dairy industry is its diversity," Cropp said. "The trend is not going to be all 4,000-cow operations. There are opportunities to survive no matter what your size."

Some readers asked if the increased demand that Tuls would put on the local grain market would drive prices too high for local operators.

Cropp said it's not likely. Small farms are more likely to grow their own feed and won't be affected by $5-a-bushel corn, Cropp said. Some could have excess feed to sell to Tuls, he said.

Small farms out of necessity have found ways to succeed in Wisconsin, Cropp said.

The average herd size in Wisconsin is 98, and the largest herd in the state includes 8,000 milking cows, he said.

Many producers have found success by producing value-added milk from 40 cows, Cropp said. Some produce organic milk or graze their herds rather than feed them grain in lots. Others have connected with certain cheese factories to take advantage of premium prices, he said.

"If you're small and producing milk at the regular old price, it's going to be pretty tough," Cropp said.

Tom McClellan is one of those "medium-sized" producers who milks 520 cows on Highway 11 west of Delavan and is an enthusiastic supporter of Tuls' proposal.

However, he knows such large farms often are unpopular with the general public.

"Like it or not, nobody's building 50-cow stanchion barns anymore," McClellan said. "Is it agriculture, what Todd's building? Definitely. Is it a larger scale than what people are accustomed to? Definitely."

People who don't work on farms tend to wax nostalgic about 30-cow dairy operations, McClellan said.

"The people that have the fond memories weren't doing it day in and day out," McClellan said. "They got sick of it and left the farm."

McClellan thinks small producers can operate alongside big ones.

"The milk price is pretty far removed from a 5,000-cow or a 500-cow dairy. A dairy my size has opportunity for contracting on the Chicago Mercantile Exchange. He's 10 times my size. I don't see any problem that way, personally."

Thompson said it's not likely the flood of milk produced by Tuls' cows would cause Wisconsin processing plants to cut contracts with local farmers.

"If you're a smaller producer and producing a quality product with low somatic cell count, those processors are available, and they're going to want your milk," Thompson said.

Wisconsin has more processing capacity than milk production and imports 15 percent of its milk.

"Why not grow it, produce it locally and process it here?" Thompson said.

Langan acknowledged that people have reasons for not liking commercial dairy farms, but concerns about the economic viability of small farms should not be one of them, he said.

"Farmers get out of dairying for all kinds of reasons," Langan said. "Every dairy farm has a different story in this state. They get out of the business for lots of different reasons. Creation of a few big ones really is never the reason."

Farms of all sizes benefit when cows are added to the system, Thompson said.

"We have a strong infrastructure compared to most other states," Thompson said. "Having a concentration of cows on operations—big, medium and small—allows us to maintain that infrastructure of dairy processing facilities, feed dealers and equipment dealers."

Large farms benefit from economies of scale, but small farms on good financial footing can compete, Thompson said.

Cropp expects Wisconsin's dairy industry to continue to diversify.

"I don't think we'll look like California or Idaho anytime in the near future."

LARGEST DAIRIES

Rock Prairie Dairy proposed for eastern Rock County would be home to 7,280 animal units (one cow is 1.4 animal units), which would make it Wisconsin's fourth-largest dairy.

Here are Wisconsin's largest dairy herds by animal unit.

1. Rosendale Dairy, Fond du Lac County—11,500

2. Pagels Ponderosa Dairy, Kewaunee County—8,080

3. Van Der Geest Dairy Cattle, Marathon County—7,340

4. Dairyland Farms, Brown County—6,925

5. B & D Dairy, Marinette County—6,424

6. Kenn Buelow, Calumet County—5,748

7. Green Valley Dairy, Shawano County—5,650

8. Larson Acres, Rock County—5,580

9. S & S Ag Enterprises, Door County—5,520

10. Holsum Dairy, Calumet County—5,267

Source: Wisconsin Department of Natural Resources

COW NUMBERS

Rock County's dairy cow population has been declining since at least 1975:

1975 27,800

1980 27,500

1985 25,300

1990 23,100

1995 16,500

2000 14,000

2005 12,500

2010 12,400

Source: UW Extension Rock County