Name and Position/Title:
Larry Tranel, Extension Dairy Field Specialist
Fiscal Year Submitted:
ISU Dairy Specialist Creates Millionaire Model Dairy Farms
Dairy profitability, labor efficiency and environmental sustainability are difficult goals to achieve for beginning and transitioning dairy producers due to the high capital input and high labor intensity of conventional forms of dairy farming. Though a more sustainable, profitable and lower cost model was envisioned by many, conventional dairy farming wisdom and most research gave little credence to potential profitability of dairy grazing systems, low cost parlors, low cost facilities and crossbred dairy cows.
This dairy field specialist created a model dairy farm in the early 1990’s and has continued to fine tune it in 2010. In 2007, a grant from the Leopold Center of Sustainable Agriculture at ISU provided funds to publish demonstration farm data based on the model. Five dairy farms were worked with and given “Millionaire Model Farm Status” due to the relative production practices. These farms were analyzed financially in 2000, 2004, 2007 and 2009, the last year of the grant. The results, the model plan and the production details were then published in a three-part series titled, Making Millionaire Model Dairy Producers I, II and III.
Five model dairy farms were created, some as early as 1992 and one as late as 2002. A graph depicting the financial progress over 25 years was used to assist other producers using the model to check their progress. For example, after seeing the graph in Agri-News, one producer commented how he was in year 8 of other dairy producers following the model but financially was already in year 13.
Of the five model farms, four achieved millionaire status by year 18. The beginning model farm that was started in 2002 had achieved a net worth of $300,000 in seven years, well on their way to achieving the goal early on as well.
The publications and the published financial data have been presented to over 1,000 dairy producers and consultants in the past three years. Personal interview surveys show that 100% of those interviewed found the financial data very useful for comparing their farm to the model and inspired them to become more like the model farms.
August 8, 2010
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