The last few years have been tough particularly for young people who are farming. For that reason, we asked the four participants in the December 2018 Round Table “These young farmers came back to the dairy” where they thought the dairy industry was headed.

“With all of the consolidation going on I wish I had a crystal ball,” said Kansas dairyman Justin Ohlde. “People want to know more about where their food comes from, and if we are catering to the U.S. consumer, they want an experience while eating. We will have to do what they want while still being cheap because that is what U.S. buyers are accustomed to.”

Ohlde believes the future will be in efficiencies and automation. “Robotics and block-chain technologies, which incorporate centralized data reporting and storage, will be a part of that,” he shared. “We will work on being more efficient and transparent.”

Here’s how the other three participants in the Round Table answered the question, “Where is the dairy industry headed?”

Glen Meadows Farm (Clark Egelston), Fultonville, N.Y.: I see my farm and the dairy industry becoming consolidated and more efficient. Unfortunately, I expect to see a lot more businesses sell out in the coming years, and the ones that don’t are going to become very lean and efficient at what they do. The farms that are left will have top quality product, which will be more appealing to consumers and give co-ops better marketability that will help the industry go back in the right direction.

I don’t think we will ever see the highs in the market or these extreme lows in the market that we have been experiencing again. I think once the market finally does make its correction, it will be more consistent and stable in the future. The downside is I think the new normal will only be slightly higher than where we see prices today — enough to make a living and be profitable only for those that are very good at what they do.

I think economy of scale is going to play a huge role in the coming years. It’s going to be a struggle to get my own farm to a sustainable level of cows that allows for efficient specialized labor in all the major areas. I once thought the ticket for our farm was 300 cows, now I think I’ve got a long way to go.

I think the swings of pay price in the past have allowed farms to get away with less than responsible business decisions as long as there were enough reserves to get them through the lows. Farms are going to have to have well-thought-out business plans, tight budgets, and only the best of the best in both cow and business management will survive.

Schulze Dairy (Chris Schulze), Holland, Minn.: I don’t know where the industry will be in 10 years, but I think that there will always be a place and need for dairy products and people to make them. Eventually, the markets have to turn around. The question will be, “Who’s going to supply the dairy that is needed?”

I believe there will always be space in dairy for family farms, but they have to figure out how to be just as efficient as other farms of all sizes. In five to 10 years, there will be changes, but hopefully for the better.

We hope to expand in the next 10 years to 1,000 to 1,200 cows. We have the land base to accommodate the additional cows and blueprints drawn up for growth. It’s something that’s on the horizon for the future as we think a little larger will be better for us.

Slaymaker Farm (Jessica and Dan Slaymaker), Mansfield, Pa.: Some people see the dairy climate getting better. We don’t necessarily see it that way. We think this will be the new normal. We are focused on dropping our cost of production so that we can cash flow. On the farm specifically, we hope to really improve our heifer growing situation so we can continue to improve the milking herd with each generation. We also have our eyes on automated milking. That would be a bigger goal for the future, but we built our current facility to move that direction if we eventually want to.

Read more on these young farmers in the December 2018 issue of Hoard’s Dairyman on pages 714 to 716.

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(c) Hoard's Dairyman Intel 2019
January 7, 2019
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