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Dairy farms of all sizes in the money
6:33 PM 5/22/04
Jason Stein Wisconsin State Journal

Wisconsin dairy farms are growing in size, and with April the highest paying month ever for milk, the trend toward expansion isn't likely to slow down. <

The biggest farms are delivering some of the most rapid growth. State figures show a sharp rise in the number of farms licensed to have more than 700 cows - 109 in April, up from a mere eight in 1995. <

In April, the average state dairy farm had roughly 79 cows, up from 75 cows a year ago and 52 cows a decade ago, according to figures from the Wisconsin Agricultural Statistics Service. <

Milk prices are at record levels - not a bad present for June dairy month, the time for the state's annual breakfasts on the farm. But Ed Jesse, a dairy economist with UW-Madison, said farmers are still using expansions to build a better life in a market where such high prices are the exception. <

"Wisconsin dairy farmers are taking a lot of different actions to deal with what they see as lower prices .

  • .
  • . most of which include an increase in size." <

    But that doesn't mean the small family farm is going the way of the milk can. Studies show Wisconsin farmers also are making their modest farms more profitable, either grazing their cattle on low-cost pasture or boosting the value of their milk by going organic. <

    Right now, profit isn't so hard to come by on a dairy farm. <

    The state agricultural statistics service expects the gross all-milk price in April to be $20.40 per 11.6 gallons for Wisconsin farmers, almost double the price a year ago. That's the highest price in the country and a new state record, not accounting for inflation. <

    In early 2003, the base price for milk dropped below $10 per 11.6 gallons - some of the lowest levels in 25 years - leaving many farmers deeper in debt and wary of low prices in the future. <

    "They're catching up from two to two and a half years of bad prices," said Shelly Mayer, executive director of the Professional Dairy Producers of Wisconsin. <

    Not Bill and Roz Gausman of the town of Dunn. Even when milk prices were at their worst last year, the Gausmans were still making a small profit. <

    "We're pretty well worry free," Bill Gausman said. "I bought a new tractor on $10 milk." <

    Around the Gausmans stretches the reason - some of the 100 acres of tall green grass and clover that the couple largely use to feed their 85 cows. In 1988, the couple decided to switch from keeping their cattle confined in a barn, where they ate grain, to a grazing system. <

    Even in the early 1990s, very few Wisconsin dairy farmers were practicing modern grazing, said Tom Kriegl, a financial analyst at UW-Madison's Center for Dairy Profitability. Today Kriegl figures 20 to 25 percent of Wisconsin farmers practice the technique. <

    Gausman said the reason is simple - grazing can cut costs and workload dramatically. Since their cattle spend most of the year on pasture instead of in a barn, Gausman, 56, and his wife, Roz, 54, could double their herd size and still have less manure to haul and fewer feed crops to raise. <

    "We're striving to be the laziest farmers in Dane County," Gausman joked. <

    Grazing has changed greatly from the days when Gausman's father would simply put the family herd out to pasture. Using moveable electric fencing, the Gausmans now move their herd twice a day to keep the cows eating and the grass healthy and lush. They supplement the cows' diet with grain, also raised on their farm. <

    "Isn't this great stuff?" Gausman asked his wife, pointing to a thick clump of clover. <

    After nearly a decade studying the Gausmans' farm and dozens of others in Wisconsin and nearby states, Kriegl has found that farmers who graze can produce milk for about $1 to $2 less per 11.6 gallons than conventional farmers. That's a huge difference, considering farmers last year received $12.90 on average for that amount of milk. <

    Even so, grazing isn't for everyone. Farming with two brothers and three nephews as partners and his parents as investors, dairyman Walter Meinholz said the only way the family's dairy farms could provide for all of them was to feed large herds in barns. <

    With longstanding operations in Middleton and DeForest, Blue Star Dairy Farms opened its third site in Arlington last year, bringing the total number of cows it milks to 2,100. The Blue Star farms don't necessarily make more money per cow than a modest farm with a much smaller investment, but they do multiply their small profit margin by a much greater number. <

    "We can get a standard of living similar to (those) in town if we operate at the size we're at," said Meinholz, who thinks higher milk prices may help Blue Star build a heifer barn. <

    With six working partners and some 30 employees, "everybody gets at least a day off a week," Meinholz said. "That's a big advantage of a large farm." <

    Farmers who can't or won't make such a huge investment in their operation have another option - make organic milk. <

    The U.S. Department of Agriculture found in 2001 that Wisconsin led the country in the number of organic milking cows, with 10,800. Three years later, Kriegl estimates that number has almost doubled. <

    "Certainly they've experienced impressive growth," said Kriegl, who noted that organic producers benefit from more stable prices. <

    But for farmers who want to change from a traditional small operation, grazing still may be the best option, Kriegl said, because it can take three to five years to become certified as an organic farm. <

    For the Gausmans, it's a matter of choosing the life they want - one of slow-paced days on a modest but profitable farm. <

    "If I'm not mistaken, we only to get to do this once, right?" Gausman asked. <

  • Copyright © 2003 Wisconsin State Journal


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