Developing Pasture-based Dairy Systems for Family Farms

Developing Pasture-based Dairy Systems for Family Farms

Summary

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 10-20 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.

Objectives/Performance Targets

1. Train a core group of 65 family dairy farmers how 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% of the producers to increase their net income by 10%.

   Reduce feed costs by 30% 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% 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% 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 of dairy families and their local communities. The performance target is to increase quality of life as reported by participants.

Accomplishments/Milestones

Forming Grazing Groups
To date, seventy-six participants have formed four grazing groups in Southwest, South Central, and Central Missouri. We call these grazing groups “core groups”.

Core Groups A and B formed just prior to receiving SARE funding. These two groups are located in Southwest Missouri and meet regularly. In September 2001, they organized as an affiliate of the Missouri Forage and Grassland Council to take advantage of the purchasing power of a group and to have a voice in forage related issues. These groups have also discussed the possibility of marketing their milk together as a “natural” or “organic” product. Members from these two groups often attend other core group meetings and showcase their farms on pasture-walks.

Core Group C formed in July 2000. The group meets monthly and has a base of 20 producers. There is a mix of producers who have been operating pasture-based dairies for some time and those who are new to pasture-based dairying concepts. The established graziers bring experience to the group while the new graziers are willing to try new things. Both are benefiting from the support and training the project provides. In addition to monthly pasture-walks, this year we hosted two workshops for the group. The first was a financial management workshop in which we covered how to use Quicken to keep records. The second was a forage management workshop that focused on pasture development and winter-feeding systems for pasture-based dairies.

Core Group D had an introductory meeting in 2001. Twenty-two producers signed up. This group is unique in that it is comprised almost entirely of Mennonite dairy farmers. To date the group has held four pasture walks, attended a forage management workshop at the Southwest Center in Mt. Vernon and held their own pasture-based dairying workshop in Versailles, Missouri. Monthly meetings and the workshop series in goal setting, financial management and management-intensive grazing begin next spring.

Fostering Expert Graziers
After the first year in the program, we have revised our goal to have 65% of the producers become expert producers. We still encourage farmer-to-farmer information exchange, but have refined our definition of an “expert producer.” Our new goal is to recognize and foster the professional development of three expert producers in each core group. An expert producer is a farmer in the program who has exhibited expertise by 1) being asked to speak at a dairy or grazing conference 2) taking the initiative to develop on-farm research in MiG, 3) has been interviewed by a regional or national publication on their dairy operation 4) at group meetings, is the person that other members regularly seek out for advice or is the one that outsiders must convince before the group as a whole will take action. Over the last year we have identified and worked with 10 expert producers: There are 3 producers each in groups A and B and 2 producers each in groups C and D. Some highlights are:
· A producer from Washburn, Missouri participated on a producer panel at the annual Missouri Forage and Grassland Council conference. He is also a recipient of a 2001 SARE grant for his project “Heat Stress Management Utilizing Portable Shades on MiG Dairies”.
· A husband and wife team from Lockwood, Missouri was also awarded a SARE grant for their project “Small Scale Irrigation to Enhance the Profitability of MiG Dairies”. They also serve on a committee to explore the production and niche marketing of organic or “naturally” produced milk.
· A producer from Reeds, Missouri was invited to give a presentation on
”Managing an Expanding Grass-based Dairy” at the Great Lakes International Grazing Conference in Shepshewana, Indiana.
· Five members from Core Groups A and B were invited to meet with FAPRI (Food and Agricultural Policy Research Institute) in August for their input on the design of an economic model for dairy grazing operations. The model will be used to analyze economic and production data from grazing dairies in Missouri and the United States.

Impacts and Contributions/Outcomes

The monthly production and annual economic data we have collected from these producers suggests that pasture-based dairying works. Pasture-based dairy production provides producers with a low-cost source of feed for their herds; it requires a lower capital investment for farm equipment; and it reduces the costs of environmental regulations that pertain to waste disposal.

In 2001, we conducted a survey of those participating in core groups A, B, and C. Below is a summary of their responses. Percentages in parentheses indicate a response of “agree” or “strongly agree”.

Core Group Survey Results

Economic data from Missouri pasture-based dairies:
· Improved working with lenders (46%)
· Improved business decisions (91%)
· Helped identify strengths/weaknesses in their dairy operations (96%)
· Increased profit margin/cow ($379)

Financial Management:
· Have a written business plan (27%)
· Have split personal finances from dairy (64%)

Herd Management
· Have implemented a biosecurity plan (45%)
· Have renovated or built new dairy facilities (40%)

Pasture management
· Make better use of grazing practices (96%)
· Have planted 3+ improved varieties (55%)

Environmental
· Operation is more environmentally friendly (77%)

Social
· More leisure time and a better quality of life (50%)

Project Impact

Listed below are some of the important impacts of this project.

Pasture-based dairies produce milk for less. The production benchmark for this project is for 85% of our graziers to be able to produce milk for less than $12.50/cwt, the average for confinement dairies. They have surpassed that goal for the second year by producing milk for $8.96/cwt. in 1999. This is 15% less than confinement dairies overall. Lower production costs allow small family dairies to compete with larger dairies.

Producers are managing finances better. After participating in financial management workshops, 64% of producers in 2001 report they have split their personal finances from their dairy’s finances. By keeping separate financial records, they have better information from which to make sound business decisions. We are encouraged that nearly all producers polled find the economic data we have collected from them has helped them make better business decisions and identify their strengths and weaknesses. The next step will be to encourage them to use this information to set business goals.

Pasture-based dairies are expanding. This year six producers from core groups A and B are considering expanding their operations by increasing herd size. This will collectively bring an estimated $4,062,300 into their communities. Lenders are particularly interested in helping graziers because of the economic opportunity that pasture-based dairying affords. Forty-percent of our producers in core groups A, B and C report that they have plans to renovate or build new dairy facilities.

Producers are implementing MiG. Producers in the project are continuing to improve their management-intensive grazing systems. Nearly all report that after attending the forage workshop and regular grazing group meetings that they make better use of grazing practices. Over half of them have met the project goal of planting three or more improved varieties.

Environmental violations are minimized. This year only one producer out of a total of 76 had an enforced environmental violation by DNR. Over two-thirds of producers report that their operations are more environmentally friendly.

Our producers are happier. Perhaps the most encouraging impact this program has had is that 50% of producers participating in this program report that they have more leisure time and a better quality of life.