Millionaire Model Dairy Farms - Getting Started in Dairying

Larry Tranel, Dairy Field Specialist, Northeast Area
Problem Statement

The dairy producers of the 4-State dairy Extension region lack sufficient information on good model farms for aspiring dairy producers to emulate. Producers looking to follow a low-cost model consisting of labor efficient facilities, low-cost milking parlors, rotational grazing, and cross bred dairy cows face a hurdle with allied dairy industry personnel who consider it an unprofitable and inferior way to milk cows.  Yet, data shows these are some of our most profitable dairy operations.  This information needs to get out to help grow our dairy industry due to the immense profit potential for producers individually, but also for our industry as a whole.
Programmatic Response

This field specialist teamed with 5 dairy producers in Wisconsin and Iowa to do an annual financial analysis of their farms.  These farms were chosen due to their financial astuteness, quality of life and use of common practices developed into a dairy system by this field specialist over the past 16 years.  In addition, a financial pathway system was developed along with a model dairy budget of 80 cows on 80 acres with a rent-buy feed agreement for the operation run by one full time equivalent of labor.  Then, this field specialist began marketing the information by getting on various programs and working with media outlets.

The Millionaire Model Farm proceedings has been published in the 4-State Dairy Management Seminar and it was presented there as well.  In addition, it has been presented at the NE Iowa Dairy Foundations School for New and Transitioning Dairy Producers; the Upper Midwest Grazing Conference, the National Agricultural University in Nicaragua, and the Tri-State Agricultural Lenders Seminar for a total proceedings/presentation exposure to 875 people since January, 2005. 
In addition, media outlets such as Ag Radio, Agri-News, Country Today, Graze Magazine and the Dubuque Telegraph Herald have carried headline news articles on the concept.
Participants have reported this dairy system to have practical applications for capitalizing operations and this system is very opportunistic to the future growth of the dairy industry in the Upper Midwest."
Other states have requested information regarding this dairy system, especially in regards to the base model using rent/buy feed agreements.  Just in the past weeks, this field specialist received calls or information requests from Iowa, Minnesota, Illinois, New York, Kansas, Pennsylvania, Ohio, Wisconsin, Virginia, Missouri and Connecticut.
How Have Clients Used This Information?
To date, clients have used this information primarily by reassessing their own operation.  Phone conversations with those requesting the business plan model have an estimated 90% success rate in getting producers to compare these model numbers with my numbers so:
1) Producers are given the aspiration to calculate their own numbers given the format and profits;
2) Producers are comparing their numbers to the model, wondering first and foremost why there is such a big discrepancy in the net returns; 
3) Aspiring producers are given confidence that yes these levels of net profits are possible with dairying.  One used car salesman was wondering if he was in the wrong business and reported that the model gave him aspiration to consider developing his non-dairy farm into dairy;
4) Two beginning producers who have been dairying for over two years and experiencing the serious cash flow issues that tend to happen in years two and three have reported having the confidence to make it over the hump knowing their model predecessors experienced the same thing.
5) Three ag lenders asked for more information on these model farms with encouragement to keep providing meat and potatoes analysis for them to use with clients.
6) Several organic producers mentioned they were amazed at the numbers and that they needed to compare their system to the model as well.
7) Four state grazing groups (WI, MN, PA, VA) have asked this field specialist to analyze their numbers and speak to them about their results compared to the model farms.
8) Fifteen high school ag teachers reported a very high level of interest in this program at a Keystone AEA professional development for them.  All responded to a very high need to get the high school ag students to hear this presentation.  One high school ag teacher followed up immediately and asked to have me speak to six of his high school ag classes totaling 90 students.  The results of these presentations are as follows:

                48 yes out of 90 total students, 53%
                44 yes out of 90, 49%
                54 yes out of 90, 60%
Granted, this was not a scientific study, but the results are obvious.  This presentation was a huge success!  My goals for the day were this:  Students will open their eyes on a new way of producing milk that is outside of the box.  Students will leave the presentation with a positive attitude concerning earning a living in the dairy industry.  The results to these questions were 90/90!! or 100%.  "Thanks again for visiting with us and thanks for all your effort in improving the dairy industry!"  Nate Gebel, Agriculture Instructor, Waukon Senior High.
Thus, though difficult to quantify exactly, the Millionaire Model Farm project is very successfully making millionaire dairy producers and inspiring both New and Transitioning producers to possibly do the same.
December 5, 2005
109 -- Dairy

Page last updated: July 9, 2006
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