Dairy farming is a way of life, and for some of us, a childhood spent on the family farm fuels the passion to pursue dairy farming as a career. For others without direct ties to dairying, that desire is sparked by other life experiences, jobs and role models. With no family farm to buy into, the prospect of starting a dairy may seem almost impossible, but these four first-generation producers found four unique ways to enter into the business.
Double B Dairy, Jeremy Beebe, Whittemore, Mich.
Jeremy Beebe wanted to be a dairy farmer for as long as he can remember. He loved spending time on his Great Uncle Roy's farm in Wisconsin as a child, and later he milked cows for his neighbors during the summer months. His dream became a reality when he started milking 17 fresh heifers in 2001.
Over the years, Jeremy has built up both his milking herd and custom heifer raising operation. Today, his 117 milking Holstein cows have a rolling herd average of 20,174 pounds of milk, with 4.0 percent fat, 3.0 percent protein and a 74,000 somatic cell count average.
Milking cows, dry cows and heifers are housed in sand-bedded freestall barns. Cows are milked twice per day in a homemade double-5 herringbone. He also owns 160 acres and rents another 440.
The dairy farm and heifer operation are owned solely by Jeremy, but he has developed a partnership with his father and brother to share equipment. His daughter and two sons are also involved with the farm. His future plans include steady growth of the herd and a new parlor. Jeremy is pictured here with his children, his fiancee, Deanna Booth, and her three daughters.
Double B Dairy: I am from the small town of Hale, Mich., about 2-1/2 hours north of Detroit. I grew up on my parents' farm, which started as a 140-acre hobby. I completed Michigan State University's Ag Tech Dairy Management Program in 1997 and started working full time on my family's farm. During and after high school, my dad was growing his hobby farm into a full-time business, so I was a big part of that until I started my dairy.
Green Acres Dairy, Matt and Tabitha Hartwig, Athens, Wis.
Matt Hartwig grew up wanting to be a veterinarian, but working on a neighbor's dairy during high school and college spurred his interest in farm ownership. Matt got his chance while working for a grazing dairy, forming a share milk agreement with the farm owners.
In 2008, Matt and his wife, Tabitha, purchased their current farm, and today they are milking between 140 and 180 cows. Cows are bred to calve seasonally, so a majority of the herd freshens between March and June.
The farm consists of 220 owned acres and another 300 rented. The herd of Holsteins and some crossbreds make 23,500 pounds of milk, with 3.82 percent fat, 3.09 percent protein and a 130,000 somatic cell count average. Cows are milked 2x in a double-12 parallel parlor built into the old tie stall barn. During the grazing season, cows and young stock are rotationally grazed. TMR is fed to cows prior to milking.
The farm is owned by Matt and Tabitha, pictured here with their children. They would like to start another farm someday and help a new farmer, possibly one of their children, begin farming through a milk share agreement.
Green Acres Dairy: Both my parents grew up on dairy farms, and I have uncles who own those farms now. As for me, I grew up on a hobby farm near Little Falls, Minn., where my brother and I raised pigs as a 4-H project. My dad worked at a bank, and my mom ran a day care.
I went to the University of Wisconsin-River Falls for my dairy science degree and had plans to attend vet school. I worked for a neighbor, Greg Blaine, on his 60-cow farm in Minnesota during high school and college. I also spent some time in construction framing houses. My last job was for Robert Eder in Weyauwega, Wis. When he moved to Australia, I bought his cows and started farming.
My wife, Tabitha, grew up in Fremont, Wis., with little ag background. She was a school counselor before we got married, and then she started feeding calves and doing bookwork for the farm.
JoyRide Farm, Robert and Ashley Abbott, Fort Edward, N.Y.
Robert Abbott began working on a neighbor's dairy farm when he was about 10 years old, and from there he developed the desire to operate his own dairy. His wife's family sold their farm when she was young, but Ashley knew that someday she wanted to farm again.
The young couple, pictured here, have been able to pursue their dairy farming dream utilizing rented facilities and equipment. Cows are milked twice daily in a tie stall barn. Calves are raised in hutches, while heifers and dry cows are housed in a hoop barn during the winter and on 70 acres of rented pastureland in the summer. The farm is a sole proprietorship owned by Robert. Ashley helps on the farm when she is not working as a herdsman for a nearby operation. The Abbotts hope to purchase the farm someday.
The herd consists of 65 milking Holsteins and Brown Swiss. Their rolling herd average is 18,000 pounds of milk, with 3.9 percent fat, 3.5 percent protein and 150,000 somatic cell count.
JoyRide Farm: Robert grew up in a rural area but not on a farm. He began working on a neighbor's farm when he was about 10 years old and developed a love for registered Holsteins. Ashley grew up on a dairy farm, but her family sold their herd when she was in junior high.
We both attended SUNY-Cobleskill for two years, Robert majoring in dairy production and Ashley in ag business. Ashley then transferred to Cornell, earning her bachelor's degree in animal science. Before we began farming on our own, we both held positions on a couple of different farms to gain experience.
White Rock Farms, Roddy Purser, Marshville, N.C.
Roddy Purser graduated with a degree in economics but shortly after college decided he wanted to farm instead. His agricultural enterprise started out with hog production, and later he added beef cattle and poultry. Looking to find a complement to the enterprises he had already built, Roddy did a lot of research before deciding to add a dairy farm in 2012. The dairy is an LLC partnership between Roddy, his father, Rodney, and brother Joshua.
Today, he is milking 300 Jerseys and a few crossbreds, averaging 55 pounds of milk on 2x milking. They are holding at 5 percent fat, 3.7 percent protein and maintaining a 180,000 somatic cell count.
The farm began as a grazing operation but is transitioning into a more conventional style dairy. The 330-cow feed barn is currently being converted into a 600-cow freestall barn.
The herd is milked in a 24-stall rotary parlor.
Key members of the dairy's team include (pictured L to R) Roddy, Dakota Sparks, heifer manager; and Drew Gibson, dairy manager.
White Rock Farms: I grew up outside of Charlotte, N.C., on a 25-head beef cow farm that my father had as a hobby. In 1996, I graduated from the University of North Carolina-Charlotte with a degree in economics. I worked for a few months after graduation selling farm equipment and then decided I wanted to farm.
I started with a 2,200-sow farrow to weaning operation with Cargill Pork. Eventually I acquired two other existing 2,200-sow farrow to weaning farms in the area and added beef cattle and a poultry breeder farm for Tyson. All the sow farms are now on contract with Murphy-Brown LLC. The beef herd was sold when we started the dairy.
Double B Dairy: I had been thinking about how to start a dairy ever since I was a little boy. As you grow up you learn that, while debt is necessary, having a strong equity position is crucial. I started my milking string with heifers that I had purchased as calves, debt-free. I started milking in the fall of 2001, calving in 17 of these heifers. For the first couple years, our homemade double-5 herringbone parlor was just a single-5, to reduce the overhead start-up cost. We got up to 30 cows in the first year.
In the fall of 2004, I dispersed my herd to expand the custom heifer raising business. This turned out to be the worst move of my dairy career. In March of 2006, I decided to restart the dairy because I missed the cows and the steadier cash flow. I purchased 12 cows and freshened in eight heifers from my original herd. Since then, I have gotten to my current size through internal growth and by purchasing calves and raising them, debt-free.
Green Acres Dairy: I always dreamed of ways to start farming, but none of those ideas would have been as good as share milking was for me. I bought Eders' whole herd in 2005 - 140 cows, 40 springing heifers and 45 yearlings.
JoyRide Farm: We began looking for opportunities to start farming shortly after college. We started actual detailed planning in the fall of 2010 after we found a farm to rent. We bought our herd and began farming in June 2011. We first invested in 45 milking cows and five dry cows and also brought along our own cows and a few cows owned by Ashley's sisters. We rented a 55-acre farm with a 50-cow tie stall barn, along with a basic line of equipment that we needed.
White Rock Farms: After much study, true planning began in the spring of 2012. The beef herd was sold in May, and the Jersey heifers arrived in June. We started with 280 open heifers and bred them in groups. The first one calved on April 25, 2013, then many more followed, and we began shipping milk in May 2013.
We purchased additional springers and cows in milk over the months to follow. We are currently in construction mode adding freestalls and additional facilities. They will be complete in late spring to early summer of 2015, and we will be milking 500-plus cows by then.
Double B Dairy: Phil Durst, my MSU extension dairy educator, has been a terrific resource and friend since he came to Michigan many years ago. Really, he and the other members of the extension team have been a tremendous, unbiased resource for me.
Phil, myself and a few other young dairy farmers started an under-35 years old peer group in 2007 called YSD (Young, Savvy and into Dairy). Our group, which meets monthly, has been a great forum for sharing ideas and solving problems, as well as making new friends. My veterinarians have also been great to work with.
Green Acres Dairy: I started in a 50/50 share milking agreement with Robert and Barb Eder when they bought a farm and moved to Australia. I had worked for them in an informal apprenticeship for a year, so I already knew the farm and cows.
Setting this partnership up took a lot of time. Share milking was popular in New Zealand, and we had manuals and publications from there, but dairying is very different in Wisconsin than New Zealand. We hired Jack Ourada as an impartial independent consultant and had our own attorneys look at our written agreement. The Eders were very open about their past performance numbers, and that was invaluable in generating cash flow predictions.
We split milk profit 50/50 because our fixed asset expenses were split about 50/50. "Dirti" costs (depreciation, interest, repairs, taxes and insurance) were shared 50/50 as well. They supplied the house, parlor, farm buildings and land. I supplied the cows, movable equipment and my labor. Since I owned the cows, all animal sales income was mine, but so were the vet, breeding, DHIA and milk house chemical expenses to keep things equitable for each of us.
The share milking was a great way for me to start because both the Eders and myself cared about making the farm more profitable. We could spend money on lanes, repairs, concrete and so forth, and in the end it helped both of us, unlike a typical rental arrangement.
JoyRide Farm: When we first started farming, the advice of our local cooperative extension agent and our FSA loan officer was invaluable. Now we really look to other farmers for information and advice.
White Rock Farms: Jim Howie, who is with Maryland and Virginia Cooperative, was instrumental in the process. He helped me find the answers to questions through a network of people that included many dairy farmers who were very willing to spend time with me and answer questions.
Jim still helps me today, but I am also very fortunate to have a team of people who manage our dairy that include Drew Gibson (dairy manager), Dakota Sparks (heifer manager) and Logan Mcateer (row crops manager). We attend trade shows and research projects together to educate ourselves and make the best decisions we can with multiple perspectives.
Double B Dairy: Initially, I bought only heifers, starting with a dozen 10 month olds. I didn't own any land and rented barn space from my dad. After six months or so, I bought a used TMR mixer. I saved all the money I could and reinvested in more heifers. This plan went on for about three years and was very successful; however, keep in mind that I was raising the heifers as a small side project while working for my dad, and I didn't have a family to support yet.
After three years, the operation needed more heifer facilities. A large well-known ag lender, as well as the Farm Service Agency (FSA), wouldn't loan me money because they said I didn't have enough experience. So, I went to my local bank with a business plan in hand and secured my first loan. That bank still has most of my business. Today, all of my income is from my dairy and custom heifer raising business.
Green Acres Dairy: The main thing here is that Eders already ran a profitable dairy. I used their banker (Greenstone Farm Credit), so the lender was familiar with the farm's performance. I had already saved up a nest egg before deciding to buy the cows since I had been saving my whole life for vet school. The banker was impressed when we did my first balance sheet that I drove a $1,000 car and had no debt. I had saved cash in the bank instead of buying a new truck.
Originally, I purchased about $500,000 worth of cows and equipment. The first year the Eders financed the cows to avoid tax issues. The second year I paid them off with FSA beginning farmer loans. All my early equity came from cows. We went from milking 140 to 190 in two years.
In 2008, we bought our current farm, downsizing cow numbers for down payment cash. As of yet, we have never really had trouble securing loans because we've been patient and ready to buy before we did. All our income is from the cows.
Green Acres Dairy: We secured financing through FSA. We already owned some cattle that we had invested in over the previous few years, and we focused on purchasing more cows first. The biggest challenge in securing loans was the fact that we had very little equity, and start-up dairies are difficult to get funding for.
Our income is not solely derived from the farm. We depend on Ashley's full-time job as a herdsperson at Welcome Stock Farm to cover our family living expenses.
White Rock Farms: We were able to borrow against the equity in our existing farming operation to build our dairy. We exchanged our beef herd for Jersey heifers, bred them at our farm and then began building the dairy facilities. We had an existing relationship with Carolina Farm Credit and were able to continue to work with them for financing. Having the rest of our farming operations producing income and the dairy not standing alone helped in that process.
Double B Dairy: Originally, I purchased my forage and grain from my dad. I did not own any land, only cows. As my herd grew and finances allowed, I rented land to grow corn silage. I traded labor to my dad in exchange for the use of his equipment. We have followed this same basic arrangement to this day, which now also includes my brother and his land and machinery.
As my financial situation improved and forage equipment needed to be replaced, I purchased the new equipment. Also, I have purchased land when the opportunity was right. I now raise all my wet forages and about half of my grain on 160 acres owned and 440 rented.
Green Acres Dairy: We try to grow all of our own forage. I have purchased hay and silage from neighbors but prefer growing our own. About two-thirds of our grain corn needs can be homegrown provided we don't have terrible wet springs like 2013 and 2014.
I like growing our own feed because I really enjoy trying to improve the soil naturally with cover crops, crop rotation and manure all while striving to improve yield and feed quality. As a grazier, over one-half of the summer feed comes from pasture.
JoyRide Farm: We purchase all of our feed. We buy corn silage that is delivered every other day to the farm. We also buy baleage and dry hay from our landlord, some of which is put up right on the farm, while the rest is delivered. We purchase custom cow and calf grains and a dry cow mineral mix. Additionally, we graze about 60 to 70 acres of pasture in spring, summer and fall.
We always knew that we wanted to purchase feed because neither of us have interest or experience in putting up crops, and we want to have high-quality forages for our cows. We also wanted to avoid the expense of field equipment and hired labor.
White Rock Farms: We began with all baleage mixed with a complete feed that was purchased. In just a short time, we realized that transitioning to corn silage was going to be a must for us. Over the winter of 2013 and 2014, we traded equipment and built trench silos to harvest our first silage crop in the summer of 2014. We have also taken advantage of the commodity shed we built, mixing commodities with our corn silage to feed TMR to cows as well as older heifers.
Our goal over time is to grow as much of our feed as possible to control input costs. We currently harvest our own silage with our own equipment. We also harvest purchased standing crops from neighbors. Having our own equipment allows us to be more flexible in harvesting and capturing our forages at the right time.
Double B Dairy: It's not likely that you can run a successful operation without help, and I have lots of it. My dad feeds calves morning and night as well as anything else I ask him to do. My mom also plays a huge role as my day-to-day bookkeeper and helping keep an eye on my three kids. As mentioned before, my dad, brother and myself all share labor and equipment to get the fieldwork done. We didn't figure this arrangement out overnight; it has evolved and works quite well.
I have a combination of seven full- and part-time employees on the dairy and heifer crew. Their talents and skills vary widely and complement each other well. I cannot stress enough how valuable it is to have great people, and I consider myself very fortunate to have my crew.
Green Acres Dairy: My parents are retired and feed our calves seasonally. My dad also helps with tractor work. We have one great full-time employee, and he's actually more like 1-1/2 people. Another part-time employee helps with milking between hours at his full-time job. Tabitha does most office-type work for the farm, and other neighbors also have been happy to help with tractor driving.
JoyRide Farm: We have no employees. Robert does the daily tasks on his own, and Ashley assists with milking and calf chores in the evenings and on her weekends off.
White Rock Farms: The people mentioned earlier are key to dairy operations. My father is a passive owner in the LLC, and my brother Josh oversees nutrient management for all the animal operations. There are five additional full-time employees and one part-time employee who help with the dairy and the replacement heifers. Roger and Charlene Bailey (my in-laws) are responsible for logistics and office management for the entire farm, including the dairy.
Double B Dairy: Besides financial, there is no question that one of the biggest hurdles is finding the balance between work and family, especially when you're a small operation with few or no employees. This has gotten easier as the herd has grown and I've brought on more employees.
No doubt the rewards of being a dairy producer are great and on a daily basis from watching a heifer calf be born to seeing her in the milking string two years later. It is also great seeing my kids and employees succeed and excel. The greatest reward is having a family to share it all with me. Remember, it's about quality time spent with your family. Make the most of it.
What is particularly rewarding is the level of milk quality we achieved over several years. Since 2008, we have won two Gold and one Silver National Dairy Quality Awards. This year, we have finally achieved the Platinum award, and I am extremely proud of that.
Green Acres Dairy: Like any farm, weather can be frustrating, especially with all our animals outside. But we'll keep working through it until we can afford to change our housing. The shear cost of everything is a hurdle. Equipment values and land especially make starting with a scale of operation big enough to support a family difficult without prior family backing.
Not having a family farm to go back to in college was frustrating and could have been discouraging, especially when most people believe that starting a dairy farm is impossible. But, that has also been the most rewarding part to me. Knowing that we've had help, but the bulk of where we are today came from our own hard work and desire. I love it when I meet someone new and get to tell them, "I'm a dairy farmer."
JoyRide Farm: There have been many hurdles! Being a start-up with high debt, we have to make decisions very cautiously. We cannot afford mistakes. It has also been an emotional and physical challenge working every day.
We have had some great rewards as well. We have calved in some great heifers from our own breeding, which is highly rewarding for us. We have also brought our BAA (measure of confirmation for Holsteins) from 101.1 to 108.5 in less than four years.
White Rock Farms: As expected, cash flow on a start-up dairy is challenging. Establishment of routines and educating employees with no dairy experience, including myself, was also a challenge.
It has been most rewarding to see the progress. I think the whole team can see that we have made many changes and significant progress since Day 1. Most of all, we enjoy what we do here, and it's rewarding to have employment that is enjoyable.
Double B Dairy: The first advice I would give is to start out with a good accounting system right from Day 1. If you wait, it will be more difficult to get on the right track and cost you a lot more money. It costs you in areas other than bookkeeping setup fees. Unfortunately, I'm speaking from experience.
The other advice is to keep learning. Attend meetings, tour farms, talk with your friends and neighbors. It doesn't have to be earthshaking and, in reality, it won't always be. Try to pick out something small that you didn't know. It sounds cliche, but try to learn something new every day.
Green Acres Dairy: I would encourage more people to consider share milking. You should also invest in cows, not young stock. Cows begin earning a return the day you bring them home and produce profit; heifers just eat it.
JoyRide Farm: We would recommend for young people with interest in dairying to work on a few different operations to gain experience and ideas. We also believe that buying into a partnership or partnering with a farmer close to retirement would be easier ways into dairy farming.
White Rock Farms: Make the best plan you can. Also, budget plenty of money for initial feed costs because you have no income from milk to pay bills until the milk checks start coming. Based on my experience, I would not start out again with all heifers. Some heifers and some cows in milk would have been better. Be prepared to invest in your replacement heifers for almost two years before they ever start to pay anything at all back. They are your future, so you don't want to cut corners, but growing heifers absorbs a lot of dollars before they ever come back to contribute to cash flow of the operation.
This article appears on page 122 of the February 25, 2015 issue of Hoard's Dairyman.
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Please describe your background.
Jeremy Beebe wanted to be a dairy farmer for as long as he can remember. He loved spending time on his Great Uncle Roy's farm in Wisconsin as a child, and later he milked cows for his neighbors during the summer months. His dream became a reality when he started milking 17 fresh heifers in 2001.
Over the years, Jeremy has built up both his milking herd and custom heifer raising operation. Today, his 117 milking Holstein cows have a rolling herd average of 20,174 pounds of milk, with 4.0 percent fat, 3.0 percent protein and a 74,000 somatic cell count average.
Milking cows, dry cows and heifers are housed in sand-bedded freestall barns. Cows are milked twice per day in a homemade double-5 herringbone. He also owns 160 acres and rents another 440.
The dairy farm and heifer operation are owned solely by Jeremy, but he has developed a partnership with his father and brother to share equipment. His daughter and two sons are also involved with the farm. His future plans include steady growth of the herd and a new parlor. Jeremy is pictured here with his children, his fiancee, Deanna Booth, and her three daughters.
Double B Dairy: I am from the small town of Hale, Mich., about 2-1/2 hours north of Detroit. I grew up on my parents' farm, which started as a 140-acre hobby. I completed Michigan State University's Ag Tech Dairy Management Program in 1997 and started working full time on my family's farm. During and after high school, my dad was growing his hobby farm into a full-time business, so I was a big part of that until I started my dairy.
Matt Hartwig grew up wanting to be a veterinarian, but working on a neighbor's dairy during high school and college spurred his interest in farm ownership. Matt got his chance while working for a grazing dairy, forming a share milk agreement with the farm owners.
In 2008, Matt and his wife, Tabitha, purchased their current farm, and today they are milking between 140 and 180 cows. Cows are bred to calve seasonally, so a majority of the herd freshens between March and June.
The farm consists of 220 owned acres and another 300 rented. The herd of Holsteins and some crossbreds make 23,500 pounds of milk, with 3.82 percent fat, 3.09 percent protein and a 130,000 somatic cell count average. Cows are milked 2x in a double-12 parallel parlor built into the old tie stall barn. During the grazing season, cows and young stock are rotationally grazed. TMR is fed to cows prior to milking.
The farm is owned by Matt and Tabitha, pictured here with their children. They would like to start another farm someday and help a new farmer, possibly one of their children, begin farming through a milk share agreement.
Green Acres Dairy: Both my parents grew up on dairy farms, and I have uncles who own those farms now. As for me, I grew up on a hobby farm near Little Falls, Minn., where my brother and I raised pigs as a 4-H project. My dad worked at a bank, and my mom ran a day care.
I went to the University of Wisconsin-River Falls for my dairy science degree and had plans to attend vet school. I worked for a neighbor, Greg Blaine, on his 60-cow farm in Minnesota during high school and college. I also spent some time in construction framing houses. My last job was for Robert Eder in Weyauwega, Wis. When he moved to Australia, I bought his cows and started farming.
My wife, Tabitha, grew up in Fremont, Wis., with little ag background. She was a school counselor before we got married, and then she started feeding calves and doing bookwork for the farm.
Robert Abbott began working on a neighbor's dairy farm when he was about 10 years old, and from there he developed the desire to operate his own dairy. His wife's family sold their farm when she was young, but Ashley knew that someday she wanted to farm again.
The young couple, pictured here, have been able to pursue their dairy farming dream utilizing rented facilities and equipment. Cows are milked twice daily in a tie stall barn. Calves are raised in hutches, while heifers and dry cows are housed in a hoop barn during the winter and on 70 acres of rented pastureland in the summer. The farm is a sole proprietorship owned by Robert. Ashley helps on the farm when she is not working as a herdsman for a nearby operation. The Abbotts hope to purchase the farm someday.
The herd consists of 65 milking Holsteins and Brown Swiss. Their rolling herd average is 18,000 pounds of milk, with 3.9 percent fat, 3.5 percent protein and 150,000 somatic cell count.
JoyRide Farm: Robert grew up in a rural area but not on a farm. He began working on a neighbor's farm when he was about 10 years old and developed a love for registered Holsteins. Ashley grew up on a dairy farm, but her family sold their herd when she was in junior high.
We both attended SUNY-Cobleskill for two years, Robert majoring in dairy production and Ashley in ag business. Ashley then transferred to Cornell, earning her bachelor's degree in animal science. Before we began farming on our own, we both held positions on a couple of different farms to gain experience.
Roddy Purser graduated with a degree in economics but shortly after college decided he wanted to farm instead. His agricultural enterprise started out with hog production, and later he added beef cattle and poultry. Looking to find a complement to the enterprises he had already built, Roddy did a lot of research before deciding to add a dairy farm in 2012. The dairy is an LLC partnership between Roddy, his father, Rodney, and brother Joshua.
Today, he is milking 300 Jerseys and a few crossbreds, averaging 55 pounds of milk on 2x milking. They are holding at 5 percent fat, 3.7 percent protein and maintaining a 180,000 somatic cell count.
The farm began as a grazing operation but is transitioning into a more conventional style dairy. The 330-cow feed barn is currently being converted into a 600-cow freestall barn.
The herd is milked in a 24-stall rotary parlor.
Key members of the dairy's team include (pictured L to R) Roddy, Dakota Sparks, heifer manager; and Drew Gibson, dairy manager.
White Rock Farms: I grew up outside of Charlotte, N.C., on a 25-head beef cow farm that my father had as a hobby. In 1996, I graduated from the University of North Carolina-Charlotte with a degree in economics. I worked for a few months after graduation selling farm equipment and then decided I wanted to farm.
I started with a 2,200-sow farrow to weaning operation with Cargill Pork. Eventually I acquired two other existing 2,200-sow farrow to weaning farms in the area and added beef cattle and a poultry breeder farm for Tyson. All the sow farms are now on contract with Murphy-Brown LLC. The beef herd was sold when we started the dairy.
When did you start planning for your dairy operation?
Double B Dairy: I had been thinking about how to start a dairy ever since I was a little boy. As you grow up you learn that, while debt is necessary, having a strong equity position is crucial. I started my milking string with heifers that I had purchased as calves, debt-free. I started milking in the fall of 2001, calving in 17 of these heifers. For the first couple years, our homemade double-5 herringbone parlor was just a single-5, to reduce the overhead start-up cost. We got up to 30 cows in the first year.
In the fall of 2004, I dispersed my herd to expand the custom heifer raising business. This turned out to be the worst move of my dairy career. In March of 2006, I decided to restart the dairy because I missed the cows and the steadier cash flow. I purchased 12 cows and freshened in eight heifers from my original herd. Since then, I have gotten to my current size through internal growth and by purchasing calves and raising them, debt-free.
Green Acres Dairy: I always dreamed of ways to start farming, but none of those ideas would have been as good as share milking was for me. I bought Eders' whole herd in 2005 - 140 cows, 40 springing heifers and 45 yearlings.
JoyRide Farm: We began looking for opportunities to start farming shortly after college. We started actual detailed planning in the fall of 2010 after we found a farm to rent. We bought our herd and began farming in June 2011. We first invested in 45 milking cows and five dry cows and also brought along our own cows and a few cows owned by Ashley's sisters. We rented a 55-acre farm with a 50-cow tie stall barn, along with a basic line of equipment that we needed.
White Rock Farms: After much study, true planning began in the spring of 2012. The beef herd was sold in May, and the Jersey heifers arrived in June. We started with 280 open heifers and bred them in groups. The first one calved on April 25, 2013, then many more followed, and we began shipping milk in May 2013.
We purchased additional springers and cows in milk over the months to follow. We are currently in construction mode adding freestalls and additional facilities. They will be complete in late spring to early summer of 2015, and we will be milking 500-plus cows by then.
What people were most helpful when you were getting your start?
Double B Dairy: Phil Durst, my MSU extension dairy educator, has been a terrific resource and friend since he came to Michigan many years ago. Really, he and the other members of the extension team have been a tremendous, unbiased resource for me.
Phil, myself and a few other young dairy farmers started an under-35 years old peer group in 2007 called YSD (Young, Savvy and into Dairy). Our group, which meets monthly, has been a great forum for sharing ideas and solving problems, as well as making new friends. My veterinarians have also been great to work with.
Green Acres Dairy: I started in a 50/50 share milking agreement with Robert and Barb Eder when they bought a farm and moved to Australia. I had worked for them in an informal apprenticeship for a year, so I already knew the farm and cows.
Setting this partnership up took a lot of time. Share milking was popular in New Zealand, and we had manuals and publications from there, but dairying is very different in Wisconsin than New Zealand. We hired Jack Ourada as an impartial independent consultant and had our own attorneys look at our written agreement. The Eders were very open about their past performance numbers, and that was invaluable in generating cash flow predictions.
We split milk profit 50/50 because our fixed asset expenses were split about 50/50. "Dirti" costs (depreciation, interest, repairs, taxes and insurance) were shared 50/50 as well. They supplied the house, parlor, farm buildings and land. I supplied the cows, movable equipment and my labor. Since I owned the cows, all animal sales income was mine, but so were the vet, breeding, DHIA and milk house chemical expenses to keep things equitable for each of us.
The share milking was a great way for me to start because both the Eders and myself cared about making the farm more profitable. We could spend money on lanes, repairs, concrete and so forth, and in the end it helped both of us, unlike a typical rental arrangement.
JoyRide Farm: When we first started farming, the advice of our local cooperative extension agent and our FSA loan officer was invaluable. Now we really look to other farmers for information and advice.
White Rock Farms: Jim Howie, who is with Maryland and Virginia Cooperative, was instrumental in the process. He helped me find the answers to questions through a network of people that included many dairy farmers who were very willing to spend time with me and answer questions.
Jim still helps me today, but I am also very fortunate to have a team of people who manage our dairy that include Drew Gibson (dairy manager), Dakota Sparks (heifer manager) and Logan Mcateer (row crops manager). We attend trade shows and research projects together to educate ourselves and make the best decisions we can with multiple perspectives.
How did you secure financial support and build equity?
Double B Dairy: Initially, I bought only heifers, starting with a dozen 10 month olds. I didn't own any land and rented barn space from my dad. After six months or so, I bought a used TMR mixer. I saved all the money I could and reinvested in more heifers. This plan went on for about three years and was very successful; however, keep in mind that I was raising the heifers as a small side project while working for my dad, and I didn't have a family to support yet.
After three years, the operation needed more heifer facilities. A large well-known ag lender, as well as the Farm Service Agency (FSA), wouldn't loan me money because they said I didn't have enough experience. So, I went to my local bank with a business plan in hand and secured my first loan. That bank still has most of my business. Today, all of my income is from my dairy and custom heifer raising business.
Green Acres Dairy: The main thing here is that Eders already ran a profitable dairy. I used their banker (Greenstone Farm Credit), so the lender was familiar with the farm's performance. I had already saved up a nest egg before deciding to buy the cows since I had been saving my whole life for vet school. The banker was impressed when we did my first balance sheet that I drove a $1,000 car and had no debt. I had saved cash in the bank instead of buying a new truck.
Originally, I purchased about $500,000 worth of cows and equipment. The first year the Eders financed the cows to avoid tax issues. The second year I paid them off with FSA beginning farmer loans. All my early equity came from cows. We went from milking 140 to 190 in two years.
In 2008, we bought our current farm, downsizing cow numbers for down payment cash. As of yet, we have never really had trouble securing loans because we've been patient and ready to buy before we did. All our income is from the cows.
Green Acres Dairy: We secured financing through FSA. We already owned some cattle that we had invested in over the previous few years, and we focused on purchasing more cows first. The biggest challenge in securing loans was the fact that we had very little equity, and start-up dairies are difficult to get funding for.
Our income is not solely derived from the farm. We depend on Ashley's full-time job as a herdsperson at Welcome Stock Farm to cover our family living expenses.
White Rock Farms: We were able to borrow against the equity in our existing farming operation to build our dairy. We exchanged our beef herd for Jersey heifers, bred them at our farm and then began building the dairy facilities. We had an existing relationship with Carolina Farm Credit and were able to continue to work with them for financing. Having the rest of our farming operations producing income and the dairy not standing alone helped in that process.
Feed is a large expense. Are your feeds homegrown or purchased?
Double B Dairy: Originally, I purchased my forage and grain from my dad. I did not own any land, only cows. As my herd grew and finances allowed, I rented land to grow corn silage. I traded labor to my dad in exchange for the use of his equipment. We have followed this same basic arrangement to this day, which now also includes my brother and his land and machinery.
As my financial situation improved and forage equipment needed to be replaced, I purchased the new equipment. Also, I have purchased land when the opportunity was right. I now raise all my wet forages and about half of my grain on 160 acres owned and 440 rented.
Green Acres Dairy: We try to grow all of our own forage. I have purchased hay and silage from neighbors but prefer growing our own. About two-thirds of our grain corn needs can be homegrown provided we don't have terrible wet springs like 2013 and 2014.
I like growing our own feed because I really enjoy trying to improve the soil naturally with cover crops, crop rotation and manure all while striving to improve yield and feed quality. As a grazier, over one-half of the summer feed comes from pasture.
JoyRide Farm: We purchase all of our feed. We buy corn silage that is delivered every other day to the farm. We also buy baleage and dry hay from our landlord, some of which is put up right on the farm, while the rest is delivered. We purchase custom cow and calf grains and a dry cow mineral mix. Additionally, we graze about 60 to 70 acres of pasture in spring, summer and fall.
We always knew that we wanted to purchase feed because neither of us have interest or experience in putting up crops, and we want to have high-quality forages for our cows. We also wanted to avoid the expense of field equipment and hired labor.
White Rock Farms: We began with all baleage mixed with a complete feed that was purchased. In just a short time, we realized that transitioning to corn silage was going to be a must for us. Over the winter of 2013 and 2014, we traded equipment and built trench silos to harvest our first silage crop in the summer of 2014. We have also taken advantage of the commodity shed we built, mixing commodities with our corn silage to feed TMR to cows as well as older heifers.
Our goal over time is to grow as much of our feed as possible to control input costs. We currently harvest our own silage with our own equipment. We also harvest purchased standing crops from neighbors. Having our own equipment allows us to be more flexible in harvesting and capturing our forages at the right time.
Who else is key to the daily operation of the farm?
Double B Dairy: It's not likely that you can run a successful operation without help, and I have lots of it. My dad feeds calves morning and night as well as anything else I ask him to do. My mom also plays a huge role as my day-to-day bookkeeper and helping keep an eye on my three kids. As mentioned before, my dad, brother and myself all share labor and equipment to get the fieldwork done. We didn't figure this arrangement out overnight; it has evolved and works quite well.
I have a combination of seven full- and part-time employees on the dairy and heifer crew. Their talents and skills vary widely and complement each other well. I cannot stress enough how valuable it is to have great people, and I consider myself very fortunate to have my crew.
Green Acres Dairy: My parents are retired and feed our calves seasonally. My dad also helps with tractor work. We have one great full-time employee, and he's actually more like 1-1/2 people. Another part-time employee helps with milking between hours at his full-time job. Tabitha does most office-type work for the farm, and other neighbors also have been happy to help with tractor driving.
JoyRide Farm: We have no employees. Robert does the daily tasks on his own, and Ashley assists with milking and calf chores in the evenings and on her weekends off.
White Rock Farms: The people mentioned earlier are key to dairy operations. My father is a passive owner in the LLC, and my brother Josh oversees nutrient management for all the animal operations. There are five additional full-time employees and one part-time employee who help with the dairy and the replacement heifers. Roger and Charlene Bailey (my in-laws) are responsible for logistics and office management for the entire farm, including the dairy.
What have been your biggest hurdles and greatest rewards?
Double B Dairy: Besides financial, there is no question that one of the biggest hurdles is finding the balance between work and family, especially when you're a small operation with few or no employees. This has gotten easier as the herd has grown and I've brought on more employees.
No doubt the rewards of being a dairy producer are great and on a daily basis from watching a heifer calf be born to seeing her in the milking string two years later. It is also great seeing my kids and employees succeed and excel. The greatest reward is having a family to share it all with me. Remember, it's about quality time spent with your family. Make the most of it.
What is particularly rewarding is the level of milk quality we achieved over several years. Since 2008, we have won two Gold and one Silver National Dairy Quality Awards. This year, we have finally achieved the Platinum award, and I am extremely proud of that.
Green Acres Dairy: Like any farm, weather can be frustrating, especially with all our animals outside. But we'll keep working through it until we can afford to change our housing. The shear cost of everything is a hurdle. Equipment values and land especially make starting with a scale of operation big enough to support a family difficult without prior family backing.
Not having a family farm to go back to in college was frustrating and could have been discouraging, especially when most people believe that starting a dairy farm is impossible. But, that has also been the most rewarding part to me. Knowing that we've had help, but the bulk of where we are today came from our own hard work and desire. I love it when I meet someone new and get to tell them, "I'm a dairy farmer."
JoyRide Farm: There have been many hurdles! Being a start-up with high debt, we have to make decisions very cautiously. We cannot afford mistakes. It has also been an emotional and physical challenge working every day.
We have had some great rewards as well. We have calved in some great heifers from our own breeding, which is highly rewarding for us. We have also brought our BAA (measure of confirmation for Holsteins) from 101.1 to 108.5 in less than four years.
White Rock Farms: As expected, cash flow on a start-up dairy is challenging. Establishment of routines and educating employees with no dairy experience, including myself, was also a challenge.
It has been most rewarding to see the progress. I think the whole team can see that we have made many changes and significant progress since Day 1. Most of all, we enjoy what we do here, and it's rewarding to have employment that is enjoyable.
What advice would you give young people considering a start in dairying?
Double B Dairy: The first advice I would give is to start out with a good accounting system right from Day 1. If you wait, it will be more difficult to get on the right track and cost you a lot more money. It costs you in areas other than bookkeeping setup fees. Unfortunately, I'm speaking from experience.
The other advice is to keep learning. Attend meetings, tour farms, talk with your friends and neighbors. It doesn't have to be earthshaking and, in reality, it won't always be. Try to pick out something small that you didn't know. It sounds cliche, but try to learn something new every day.
Green Acres Dairy: I would encourage more people to consider share milking. You should also invest in cows, not young stock. Cows begin earning a return the day you bring them home and produce profit; heifers just eat it.
JoyRide Farm: We would recommend for young people with interest in dairying to work on a few different operations to gain experience and ideas. We also believe that buying into a partnership or partnering with a farmer close to retirement would be easier ways into dairy farming.
White Rock Farms: Make the best plan you can. Also, budget plenty of money for initial feed costs because you have no income from milk to pay bills until the milk checks start coming. Based on my experience, I would not start out again with all heifers. Some heifers and some cows in milk would have been better. Be prepared to invest in your replacement heifers for almost two years before they ever start to pay anything at all back. They are your future, so you don't want to cut corners, but growing heifers absorbs a lot of dollars before they ever come back to contribute to cash flow of the operation.
