Economic Impact without Creating White Elephants

Dale Thoreson, dairy, dairy/beef and forage field specialist

Situation
Agriculture is still a major player in the economic picture of northeast Iowa. There is controversy over how this impact is maintained and expanded. Much time, legislation, and dollars have been spent on attracting and encouraging very large agricultural entities to expand or locate in this state. With these entities have come environmental concerns, community impact concerns and a major concern over how agriculture will be structured and who will be the decision-makers of the future. The dairy industry has been subjected to these efforts.

Response
It is not known what first brought three different sects of Mennonite families to Northeast Iowa from at least five states. The initial five to ten families had some dairy experience. But there were master plumbers and catfish farmers among these. They established single-family dairies of 40 to 65 cows. Extension played a major role in helping them get established. We initiated the Livestock Producers Assistance Program with Mike Gerdts as technician. Mike had several Mennonite families involved in the three-year program. We have located one of the eight annual Northeast Iowa Dairy Days at Elma. This was done to be close to the sect that does not use rubber tired powered vehicles. We have established a Mennonite Advisory committee consisting of one farm couple from each of the Mennonite religious sects. We have established more specific learning opportunities in soils, farm economics and corn silage production. Each of our county extension education directors, Mary Schradt-Prouty, Brenda Schmidt (plus her predecessors Jim Wenzel and Jerry Philips), Don Arendt and Neil Wubben plus the six agricultural field specialist serving the four counties where the Mennonite families have settled have been active in doing individual farm calls and office consultations to assist families in the difficult process of moving their families and their farms from one part of the country to another.

This, like many major economic efforts, has involved many people within and outside of extension. Several communities and agri-businesses have also been instrumental in making northeast Iowa a place to relocate to and become part of the community. These include former Foremost Farms field man Rob Hahn and current field man Mike O'Brien; Mel Brown Sr. from North Iowa Dairy; Leo Mietner, a local dairy equipment dealer and a former dairy farmer; and Bob Foss, a banker. The Charles City community has built a horse stable for families from the Wenger Mennonite sect to tie their horses while shopping in the downtown area.

Impact
To date, the Mennonite farm families have established approximately 75 dairy farms. Most of these farms had no prior dairy facilities on them. Each of these dairies is in the range of 40 to 75 cows. Most are using DHIA, artificial insemination, rBST, Total Mixed Rations, forage kernel processors, professional dairy nutrition services, professional hoof trimming services, local veterinarians, local builders to construct their livestock housing, local banking services, plus other types of technology to optimize their herds ability to produce milk. Because they are broad users of technology, they sell more milk per cow than the average Iowa dairy farmer does.

There are at least 75 Mennonite dairy farm families in these four counties. About five more have moved to Northeast Iowa each of the last four years. Their economic impact is impressive. By using the 75 herds times 50 cows times 20,000 pounds milk sold per cow times the 1999 average Iowa milk price of $13.66 gives a gross milk income of $10,245,000. Add to this the value of cull cows ($7800 per herd) $585,000 plus the value of bull calves sold ($1425 per herd) $106,875 and the value of cull heifers ($1500 per herd) $112,500 equals $11,049,375. Most economic studies will credit dairy farms with a 2.5 times turnover of the gross farm value on the economy of the community. This translates into a $27.6 million dollar industry for these four counties.

And how do 75 farm families create more economic activity than a single 3,750-cow dairy? The families can create more economic activity because they are spread over a 4 county area. Do they create as much environmental concern as does a single large dairy? Are these size of dairies economically sustainable? These plus other questions will need additional extension attention in the future.

Page last updated: July 9, 2006
Page maintained by Linda Schultz, lschultz@iastate.edu