The Wisconsin School for Beginning Dairy Farmers Program - the First Ten Years: A Graduate Follow-up Survey and Beginning Dairy Farmer Case Studies

That 88% of the graduates of the WSBDF program who responded to our survey are involved in dairy and livestock farming, over a third of whom own their own farms, has tremendous meaning and significance to the state of Wisconsin, and the future of agriculture, the environment and rural life. Milk, cattle and calves are the top commodities in Wisconsin (Wisconsin Agricultural Statistics Service, 2003) and agriculture in the state accounts for $16.8 billion in income and $1.76 billion in local and state taxes that keep rural communities strong (UW-Extension, 2004).

While we cannot put a reliable number on the combined economic impact of the many different farming activities of our graduates, we know that by their direct production of milk, meat, fiber and crops, as well as their stewardship of the land and contribution to their communities through leadership, civic activity, family, schools and spending, they are making vital contributions. In addition, many of our graduates choose to share their experiences with others through area farming networks, by speaking to WSBDF classes and at other schools and conferences, and by participating in studies such as this one. We believe that as farm numbers continue to decline and food affordability, quality and access issues remain strong, the mission of the WSBDF to help and support beginning farmers is a key to the future well-being of all our citizens.

By the indicators discussed in the Results sections and the testimonials of our graduates in the farmer Interviews and class Presentations, the WSBDF has been successful assisting many beginning farmers to get started. In addition, we have generated interest around Wisconsin and in other states, for similar programming. Through distance education --webcast and conference call technology-- the WSBDF seminar has grown to be offered at first two, then four and in 2008-09 at seven additional facilitated sites across Wisconsin. Educators in Iowa, Missouri, Minnesota, Vermont and elsewhere are also interested in duplicating or becoming involved with the WSBDF or creating a similar beginning livestock farmer training program. Sharing what we do and how it has worked to other groups with similar constituents (prospective and beginning dairy and livestock farmers) is one of our objectives that we nurture and promote by presentations, internet communication, conferences, press releases and public relations events.

We have also partnered with other state agencies and organizations to raise the level of awareness about pasture-based farm management, beginning and transitioning farmer issues and the need for continued research and funding of farmer training, support and production programs. Working with the Wisconsin Department of Agriculture, the NRCS and state grazing specialists, the UW-Extension, the WI Grazing Lands Conservation Initiative, the statewide GrassWorks organization of grazing farmers, the WI Department of Natural Resources, the Professional Dairy Producers of Wisconsin, the WI Cattlemen’s Association, Organic Valley Family of Farms and many other dedicated groups and individuals we have helped to increase the amount of private, state and university funding and support that is directed toward pasture-based and beginning farming in Wisconsin. The WSBDF Endowment fund has grown by over $100,000 during the past three years, the Wisconsin legislature contributed $400,000 to grazing research and education each year for the past two years, and the UW-Madison College of Agriculture and Life Sciences made the WSBDF Directorship a permanent funded position in 2008.

There are many challenges continuing to face Wisconsin farmers and those across the NCR as we continue through the next decades (see also Areas Needing Additional Study and Appendix 4. WSBDF Graduate Interviews & Seminar Presentations). From the high cost of energy and land to the pressures of development and feeding the non-farming urban and rural public, agriculture will keep changing. As awareness grows among our citizens that healthy food choices are inextricably linked to healthy, environmentally sound and sustainable farming practices, the information, training and support that the WSBDF and similar programs as they develop provides are critical pieces of our future and of the prosperity of future generations.

Economic Analysis

Economic and Farm Business Start-up Analysis

There is opportunity in animal agriculture for young people who want to farm, and who are willing to do the things required for getting started and staying in business. As director of the WSBDF, I have been able to follow the progress of many of our graduates, and sometimes offer a few cents of advice and counsel. In addition, my observations and experience have been recently informed by the completed SARE grant project’s survey and case study results.

Who succeeds both financially and in creating a life for both themselves and their family?

As with any business, starting in farming requires time and sometimes living without, and today’s American culture doesn’t emphasize such patience. Those who succeed are passionate about the journey as well as the imagined end point. They are entrepreneurs. They value community, build trust in their relationships, and integrity in their word. I’ve learned from these people that communication and business planning skills are paramount for success as a farmer today.

I’ve also learned that everyone doesn’t have to have “all” of the required skills — at least as long as they have the humility to recognize their shortcomings, and the wherewithal and good fortune to reach out and build strong partnerships with those possessing the needed skills.

I’ve also seen problems develop. For instance, many times young and not-so-young folks are hampered by a parent who isn’t willing to hand over the reins. Or by their own uncertainty about leaving the neighborhood to see the world. But there’s an old bit of cowboy wisdom that goes, “Good judgment comes from experience, and a lotta that comes from bad judgment.” I always tell people to go forth and learn. Get exposure to the many different ways of solving the same problem. Make lots of mistakes before you spend your own money.

Aside from those broad concepts, what do you need to be successful in starting and maintaining a farming business? A number of specific recommendations to beginning (and other) farmers are included in the Farmer Adoption section. Those regarding the financial and business planning component of starting and maintaining a successful farm operation include:

Develop a business plan, and write it down. The old adage is true: most businesses don’t plan to fail, they fail to plan. You must avoid the common (and unsuccessful) American business plan: “I have to have it all, and have it all now.” Rather, put left foot in front of right, and walk in a direction that sets you up for success, one step and one financial commitment at a time.

Spend the first year(s) putting together a sound group of livestock. Work for equity in cattle as a part of your paycheck. Put together a herd that you know well, is healthy, and is bred and raised in the manner that you want to farm.

Apply your (perhaps limited) financial resources to purchase “income-producing assets.” Read: livestock. Do not over invest in assets that rust, rot, and depreciate. Read: machinery and buildings. If you spend your money wisely at first, you’ll be able to afford the comforts that you’ll need more when you are older!

You don’t need to own land to build a farm business, but you have to control land. Purchasing land first is not likely to be the soundest option. Rather, set your business up so that you can control the land you farm, preferably with a longer-term lease, maybe a lease with an option to purchase at an agreed-upon price range. Develop a good relationship with your landlord and spend as much time developing this relationship as you do on any other farming business activity before you sign the lease. Since making mortgage payments on land can make a new business very difficult — often impossible — to cash flow, approach purchasing a farm only after you have a solid financial base.

Go on your own only when you are both mentally and financially able. Only in rare circumstances can a person start out in farming today by making a mortgage payment on purchased land, cropping/raising all of their own feed, managing and/or milking a herd, and shipping a commodity-priced product. For both dairy and non-dairy livestock, it is usually best to own the herd, lease land (minimum of three years) for managed grazing, lease a milking facility (for dairy), purchase feed, discover your best market, and keep a mentor close.

Economic policy and educational efforts
It is also important to realize that broader social and economic factors affect the success of beginning farmers, in addition to their individual efforts. As a society, what do we need to do to help more farmers get started successfully? The most common answer is better access to inexpensive capital, including loans at low interest rates with low equity requirements.

But, at least in agriculture, reasonable levels of capital for beginning farmers are often available through the USDA Farm Service Agency, a state housing/economic development agency, the Farm Credit Service system, and some private lending institutions. Indeed, too often in farming the more capital one has access to, the more capital gets spent, often unwisely. This is not how we want to help our beginning farmers. The greater need is for adapting some of the current entrepreneurial aid efforts to farm business start-ups, perhaps in combination with some new assistance efforts that don’t necessarily provide low-interest loan money.

For example, SCORE (Service Corps of Retired Executives), developed by the U.S. Small Business Administration, offers the services of teams of mentors that can provide their experience to assist a new business start-up. Many states offer assistance programs. Such models hold much promise in serving the needs of beginning farm entrepreneurs, a service that historically was provided by the extended farm families and rural neighborhoods when so many more of our citizens were actively farming. (These traditional services are still being offered within many Amish communities.)

We also need improved options and opportunities for retiring farmers to assist new farmers without giving up their lifetime investments. These include tools such as tax incentives to lease the farm to a beginning farmer, capital gains exemptions when selling to a beginning farmer, and land contract payment guarantees (now a pilot program by USDA-FSA).

Attachments:
Two WSBDF graduate’s actual start-up dairy budgets
Table 1. Start-up dairy with 50-cow ownership in rented barn with purchased feed
Table 2. Start-up dairy with 38-cow ownership on 120-acre rented farm with managed grazing

Farmer Adoption

We are submitting interview and presentation transcripts from the graduates whose stories and farms were the subject of our in-depth look at the dairy and livestock farm start-up process (see Appendix 4. WSBDF Graduate Interviews & Seminar Presentations). Seven students were interviewed in person and eight graduates gave presentations in our 2007-08 seminar class. The names of the interviewees have been changed and locations generalized to maintain confidentiality. Since the class presentations were recorded public events, these names have been retained. Excerpts from some of these fifteen graduates’ stories are included in this section and in Areas Needing Additional Study.

Tom (2000-01): “Going to that high school was a big decision for me and a very beneficial choice for me long term, I met a lot of good people and was able to realize that agriculture is a valid career choice; unlike it was looked at the big city school as kind of a joke. Nobody thought anybody really became farmers anymore.

I’d probably have to say the most beneficial thing by far was the experience of [my WSBDF internship in] New Zealand and everything that went with that. There’s been a lot of things I’ve learned there that I have used, and a lot of things I learned there that I surely would not want to use. There probably is not a day that goes by that I don’t think or reference something to New Zealand and those 2 months that I spent there.

Close behind the New Zealand experience was the network and the people I met [at WSBDF] and the contacts I still have today that are farming or actively farming. There are some people in that class that I talk to once a week; for sure a couple times a year.”

Kathy (2003-04): “I actually signed up for the School for Beginning Dairy Farmers class on a whim. I really knew that I wasn’t ready to start farming on my own, so at the time I was like, ‘Well, this will fill my credits.’ I really am glad that I did it because I went into it thinking ‘You know, this is not what I am ready for,’ and ‘this is too early,’ and ‘this class won’t apply to me,’ but life came at me a lot faster than I expected and it helped me out in so many ways.

I remember when I went to get my loan, looking up my paperwork from that class. I know my loan officer was impressed with me when I went in because he thought it was good. With the business plan, I will let you know that it helped a lot in the beginning; and I try and stay as close as I can to the numbers but sometimes it just doesn’t always work that way. But it is very good to sit down once a year and get it all done on paper and look at it all.

My advice to the students of the Wisconsin School for Beginning Dairy Farmers is to be a sponge and absorb as much as you can before you start because there are so many ways to farm. I try and keep current by going to all conferences that I think are necessary or workshops and meetings. I’m keeping current because like I said there are so many ways to do farming nowadays, ideas and networking with other people just goes a long way to keep you on top of the game around here.”

Fred (2000-01): “I’ve always said it to a lot of people that the lifelong friends you make; you have so many people there that all have the same interests and the same drive. I guess what I’d like to say is the people I thought were my best friends in high school; once I graduated I have[n’t] talked to very few of them since. And once I went to Short Course, many of them have become my lifelong friends. There are many of them that I still talk to even on a monthly basis. That there in itself is priceless I guess you could say.

As far as satisfaction of what we are doing as far as family and farm life, like I said earlier … as far as the passion for it; that’s the satisfaction of itself for me. …words just can’t describe it for me. As far as family, with my one son here; as much as I can see it in him already just his passion for it, the way he runs around….he’s right on my footsteps all the time trying to do the things that I just did. It’s just awesome.”

George (2002-03): “At one point I think during one month of the summer I had 3 days off all that month because I had been relief milking for other farmers that much. That was a really good experience for me because I got to see a lot of different farms and how their operations worked. So that was an opportunity I would say that helped me make a decision on whether I wanted to go farming.

I quit my job and told them I was going to start milking cows and I tell you what I had a lot of people sit there and say, ‘You’re crazy, you’re never going to make it. You don’t have anyone to help you’ or ‘There is nobody there to help back you up,’ or ‘You have no equity.’ So those were definitely some obstacles that I faced.

I took my business plan from the WSBDF class and I took it to the FSA too. It was the exact copy and …I didn’t know that but that’s exactly what I did too.

I guess what I’d like to see retained is the grass-based part of it. I knew very little about it when I got there, and now after I’ve done it on my operation for going on three and a half years now, I wouldn’t do it any other way. I firmly believe that grass-based is a very competitive way to compete in the dairy industry and it should be considered very thoroughly before disregarding it as a niche market kind of operation; I mean it’s very competitive in any kind of dairying, I believe.”

Dan (1997-98): And in all honesty I was nervous going into an internship and not knowing these people and spending two months with them. And now, looking back, I wish I could have spent six months with them; it made me feel like ‘doggone it, it’s a real pain in the butt; I gotta spend these months with these people.’ But I learned so much …

Ten years later from when I left the class, I’m finally getting started. It could have happened sooner but I wasn’t willing to stick my neck out there. I was a little bit naive; wet between the ears. So I guess what I’m saying is, be willing to stick your neck out there and take a chance.

I thought about it in class, kinda went home and thought about it, and kinda forgot about it. And then as time goes on and you are doing it on your own, you go, ‘doggone it. Hey do you remember that in Dick Cates’ class when we talked to that extension agent?” And then, “what the heck- we got ten minutes, let’s run down and talk to the extension agent down here… and if I could go back and do it all over I would have done a four-year degree in managed grazing through the Wisconsin School for Beginning Dairy Farmers. Not only for the coursework, learning grasses and learning about cow management, but for the association with successful people. I feel that I learned a lot from the School, and I am very thankful for it.”

-----------------------------------------

Who succeeds both financially and in creating a life for themselves and their family? From thirteen years of experience and observation of the students and graduate farmers of the WSBDF, and the collective farming wisdom of decades of mentor farmers and farmer speakers in the class, we make the following specific recommendations to beginning (and other) farmers:

1. Set goals. Figure out what you really want to accomplish in life, and how your farm business can help get you there. Then write your goals down, review them and maybe change them, and write them down again.

2. Identify your strengths and weaknesses. What parts of farming do you like and don’t like? Be honest with yourself. To cover what you don’t like to do or aren’t particularly good at, develop partnerships with others who have those skills. Identify your competitive or “unfair” advantage(s). These may be your particular talents, farm location, or market opportunities, and capitalize on these strengths.

3. Develop a business plan, and write it down. The old adage is true: most businesses don’t plan to fail, they fail to plan. You must avoid the common (and unsuccessful) American business plan: “I have to have it all, and have it all now.” Rather, put left foot in front of right, and walk in a direction that sets you up for success, one step and one financial commitment at a time.

4. Surround yourself with a community of mentors and those who care about your survival and success. Treat this community of wonderful people as a precious resource, and vow that you will give back in the future to those who follow you.

5. Work to develop honest and fair relationships and partnerships for both business and family with those who have a similar set of goals, but bring different and complementary sets of skills. In any partnership arrangement, make sure all partners are headed in the same direction, and communicate, communicate, communicate. Always be gentle with the feelings and opinions of your loved ones. Without them by your side, little else matters.

6. Spend the first year(s) putting together a sound group of livestock. Work for equity in cattle as a part of your paycheck. Put together a herd that you know well, is healthy, and is bred and raised in the manner that you want to farm.

7. Apply your (perhaps limited) financial resources to purchase “income-producing assets.” Read: livestock. Do not over invest in assets that rust, rot, and depreciate. Read: machinery and buildings. If you spend your money wisely at first, you’ll be able to afford the comforts that you’ll need more when you are older!

8. You don’t need to own land to build a farm business, but you have to control land. Purchasing land first is not likely to be the soundest option. Rather, set your business up so that you can control the land you farm, preferably with a longer-term lease, maybe a lease with an option to purchase at an agreed-upon price range. Develop a good relationship with your landlord, be it a family member, neighbor or person new to your acquaintance. Spend as much time developing this relationship as you do on any other farming business activity before you sign the lease. We all want to own a piece of the planet, our own home and, as farmers, land. But being in the real estate business — making mortgage payments on land — is a very different business than producing income from livestock. A large mortgage can make a new business very difficult — often impossible — to cash flow.

9. Do on-farm internships under the guidance of experienced mentors, on several farms, for a few months each. Be willing to leave your neighborhood! Internships are the single most beneficial activity an aspiring farmer can engage in. If you’re from a farm, you’ll gain valuable insight about different ways to solve a familiar set of problems. If you’re not from a farm, you’ll come to understand the stamina, routine, and problem-solving ability required to farm, and you’ll have the opportunity to ask questions and learn all aspects of the business.

10. Work for other farmers. Learn what you like and what you don’t like, what you’re good at and what you’re not. When you know the kind of farm and farmer you want to associate with, consider an apprenticeship working for a longer time period and with greater responsibilities. If you can, earn a portion of your pay in young stock, and raise these animals on or near the farm where you are working. In this manner you’ll earn equity as the livestock mature and grow in value, and you’ll have healthy animals whose temperament you know well.

11. Go on your own only when you are both mentally and financially able. Only in rare circumstances can a person start out in farming today by making a mortgage payment on purchased land, cropping/raising all of their own feed, managing and/or milking a herd, and shipping a commodity-priced product. For both dairy and non-dairy livestock, it is usually best to own the herd (raised or purchased), lease land (minimum of three years) for managed grazing, lease a milking facility (for dairy), purchase feed, discover your best market, and keep a mentor close. Partner with an established/retiring farmer (family or non-family). The established farmer often provides infrastructure, experience, and/or field work to raise feed, while the start-up farmer offers passion and labor in exchange for pay and an increasing equity share.