Developing Pasture-based Dairy Systems for Family Farms

Project Overview

LNC00-173
Project Type: Research and Education
Funds awarded in 2000: $81,463.00
Projected End Date: 12/31/2002
Region: North Central
State: Missouri
Project Coordinator:
Robert Kallenbach
University of Missouri-Columbia

Annual Reports

Commodities

  • Agronomic: corn, grass (misc. perennial), hay
  • Animal Products: dairy

Practices

  • Animal Production: feed/forage, manure management, grazing - multispecies, pasture fertility, pasture renovation, grazing - rotational
  • Education and Training: decision support system, extension, farmer to farmer, focus group, networking, study circle, technical assistance
  • Farm Business Management: whole farm planning, new enterprise development, budgets/cost and returns, marketing management, agricultural finance, risk management
  • Production Systems: agroecosystems, holistic management
  • Sustainable Communities: infrastructure analysis, partnerships, analysis of personal/family life

    Abstract:

    Our pasture-based dairy education and outreach program addresses the problems facing Missouri’s small family-operated dairies. Family dairies have been declining because of inadequate financial management, high input costs per unit of product sold and increasing environmental regulations. This project confronts these problems by forming local grazing groups of ten to 20 dairy producers. Groups learn improved financial practices and how to use management-intensive grazing to lower input costs and meet environmental regulations. The result has been stronger family-operated dairies that are financially stable and expanding.

    Introduction:

    Background of the problem

    One-third of Missouri's family dairy producers have left the dairy industry over the last eight years. Although competition from large confinement dairies is a factor, there are three main reasons that small family dairy operations fail: 1) lack of financial management; 2) high input costs per unit of milk sold; and 3) the cost of complying with environmental regulations. To stay in business, producers need to improve their financial management and production skills. Producers who learn these techniques can increase profit per cow by $279 per year; for a typical 83-cow dairy, this represents a $23,157 increase in net income. In addition, the dairy farms are more environmentally friendly.

    The rapid disappearance of dairy farms erodes both state and local economies. Missouri dairy farms contribute $400 million/year in milk and meat sales to the state's economy. Using standard economic multipliers, this expands to $1 billion/year in total statewide economic activity.

    Literature Review

    Pasture-based Dairy Production:

    Several research projects (including several SARE projects) show that management-intensive grazing (MiG) can be a viable alternative to confinement feeding for dairy farms. Numerous studies show that management-intensive grazing can be used to provide inexpensive but high-quality dairy feed (Petzen, 1988; Murphy, 1988, Holden et al., 1994; Rotz et al., 1999; Wagner, 1999). A study of Pennsylvania and New York dairy farms found that a moderate intensive grazing system could provide dairy-quality feed at less cost than hay or corn silage (Hanson et al., 1998a). In addition, they found that pasture-based dairies were more likely to be environmentally sustainable because they used much less commercial fertilizer and pesticides.

    Milk production for cows in a pasture-based system is commonly perceived to be extraordinarily low. A review of the literature shows that this is not necessarily true. Hanson et al. (1998a) found that milk production per cow was nearly equal from grazing and conventional dairy farms in Pennsylvania. Posner et al., (1998) reported a rolling herd average of more than 17,000 lb for a well-managed grass-based dairy in Wisconsin. On the other hand, Kolver and Muller (1999) found that average milk production for pasture-based dairies was about 30 percent lower than for confinement dairies. In most instances where pasture-based dairies produce substantially less milk than conventional dairies, it is because the farm managers do a poor job of managing pastures (Murphy, 1990; Zartman, 1994; Fales et al., 1995; Rust et al., 1995). The key to success seems to be education; specifically, once dairy farmers learn management-intensive grazing skills, milk production usually follows.

    Although milk production is often equal or lower for pasture-based than for confinement operations, profit margins are usually higher for pasture-based dairies. Research from Vermont, Michigan, Ohio, Pennsylvania, Minnesota, Wisconsin and New York shows that adopting pasture-based dairying can substantially reduce input costs (Ford, 1996; Hedges, 1997; Hanson et al., 1998b; Dartt et al., 1999; Rotz et al, 1999). In a SARE-sponsored project, Murphy (1988) found that the net return to labor, management and interest was six times higher ($47,628) from a pasture-based dairy herd than for a similar sized herd in a year-round confinement feeding system ($7,729). In Wisconsin, Posner et al. (1998) found that net farm income rose from $21,500 to $54,000 when a dairy farm switched from confinement feeding to a pasture-based system. In addition, they found that the daily labor input in the winter was reduced from 12 hours to 3.5 hours per day for a grazing vs. a conventional dairy farm. This work suggests that pasture-based dairying is not only profitable but also gives producers more time with their families.

    An additional benefit to grass-based dairying is that it is more environmentally friendly. Rotz et al., (1999) estimated that grass-based dairy farms would store and handle 85 percent less manure, making them much less likely to contribute to pollution of streams and groundwater supplies than were confinement dairy farms. Pasture-based dairying forces cows to distribute manure in pastures across the farm, reducing the need for large lagoons and their associated construction costs (Rotz et al., 1999). In addition, pasture-based dairies spend less on odor containment, fly control and manure-handling equipment (Dartt et al., 1999). This literature suggests that dairy farmers and regulatory agencies alike find that letting nature take care of manure is the cheapest and best way to manage the problem.

    Farmer-to-Farmer Education:

    Many researchers have found that farmer-to-farmer networks and mentorship were an effective method to deliver information to producers (Schroeder,1994; Bilek, 1996). Lass (1995) found that farmer organizations that were organized into “core groups” were more likely to be economically viable than groups without this type of organization. In addition, Lass’s research suggested that developing networks or core groups of producers can increase satisfaction with farming and help rural communities develop a sense of belonging. All of these studies show the importance of developing lines of communication between farmers, researchers, extension educators and agency personnel.

    Project objectives:

    1. Train a core group of 65 family dairy farmers to practice sound business principles, focusing on profitability. The performance targets are for all participating producers to develop and use a written business plan and for 85 percent of the producers to increase their net income by 10 percent.

      Reduce feed costs by 30 percent by showing participants how to use management-intensive grazing to avoid much of the high cost of confinement feeding and making and storing hay, haylage and/or silage. The performance target is for 85 percent of participating producers to produce milk for less than $12.50/cwt.

      Improve the aesthetic and environmental condition of family dairy farms by utilizing pasture-based management techniques to spread manure in pastures rather than building expensive lagoons. The performance target is to achieve 100 percent compliance with environmental regulations as enforced by the Missouri Department of Natural Resources.

      Increase the social interaction and sharing of ideas between dairy farmers by facilitating the formation of local “grazing groups,” producer-organized forums that stimulate the sharing of expertise and goal setting. The performance target is to form regional grazing groups of 10 to 20 members who meet regularly. Sixty-five percent of the participants in these groups will become expert producers.

      Improve the quality of life for dairy families and their local communities. The performance target is to increase quality of life as reported by participants.

    Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.