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August 9, 2007: For two years, I operated
a year-round, outside-housed, grazing-based, bulk-shipped,
organic cow dairy. Due to many avoidable mistakes on my part,
I liquidated the farm business at significant monetary loss
in June. If experience is the best teacher, this is especially
true if it is the hard experience of someone else! I hope
being honest about my story can help other beginning dairy
producers make better choices.
When I opted to start dairying in 2005, I chose my farm location
in northeastern Pennsylvania based on its proximity to a major
Russian Orthodox religious institution (including a monastery,
seminary, retreat center and cemetery). This choice of location
to continue association with a spiritual community was the
first of many things I did with noble intentions that undermined
my dairy’s profitability.
I bought the farm thinking of a part-time business grazing
steers and raising poultry to sell locally at retail. I only
considered dairy out of desperation once I was laid off from
my sales job in a merger. I figured it was the best way to
optimize my effort: I could focus on production and let a
milk company (Organic Valley in this case) handle the other
three aspects of my farm business, those being processing,
distribution and marketing/sales. I thought I could gradually
take back those value- and profit-adding parts of the business
as things progressed.
As it turned out, managing the production of 30 to 50 cows
plus calves is more than a full-time business for one inexperienced
person to handle—but I’m getting ahead of myself.
To streamline this story, I’ll basically list the major
issues that combined to doom my dairying endeavor.
Problem #1:
Lack of supportive local natural conditions and farming infrastructure,
particularly organic farming support.
The climate, soils and topography of Wayne County, Pennsylvania,
do not favor commodity agriculture of any kind. There are
many opportunities for niche agriculture as more people build
vacation and retirement homes, but full-bore commodity ag
is not practical.
Your
first goal in business had better be to make a profit
and later work toward your idealistic goals, or you will
soon be out of business and never get to the idealistic
goals. I am an example of this.
This has a number of consequences for a start-up agricultural
enterprise. There was little choice among veterinarians, none
of whom had much knowledge of alternative cow-health therapies,
and little choice in equipment dealers, none of whom think
production ag is their future (rather, they think of lawn
tractors and contractors’ tools). Bedding materials
for the cows and custom harvesting are essentially unavailable.
I neglected to consider the cost of trucking in my initial
business plan. All organic grain was trucked in at up to $100/ton
from mills at least 150 miles away. Moral of the story: Match
your location to your business model, or match your business
model to where you are, or do something else.
Problem #2:
Mismatched personality and business type.
You probably ought to pick your business model to match your
temperament, as well. I am a communicator and storyteller;
a big-ideas person, not a details guy. I get a lot of energy
out of stories, both mine and other people’s. I find
it very easy to stay up half the night reading, writing and
talking. Cows reward consistency in milking time, feeding
time, and probably want to have everything the same every
day. That didn’t come easily for me.
I need time to recharge the people part of my personality.
You don’t get much of that from the cows, and not at
all from driving tractors in circles.
I don’t miss
all my cows, but some were hard to let go of.
Problem #3:
Overly optimistic
plans for milk income and building progress.
If you are planning on new construction to get into business
as I did with my milking parlor, beware of estimates for the
time and money it will take to get the work done. I was counting
on getting paid for some milk while there was grass to graze
the first summer/fall we started. Reality was that we didn't
start putting milk into the tank to sell until nearly the
next spring. Those six-plus, income-free months of bank payments,
feed bills, vet bills and utility bills—along with massive
cost overruns due to a parlor pit that wanted to be a groundwater-filled
swimming pool—were, in retrospect, the beginning of
the end.
Problem #4:
Troubles with
organic idealism.
Many people drawn to organic farming are idealists, and
that can get you into a lot of trouble, or at least trouble
your soul. First off, let’s dispense with the notion
that the regulated organic dairy industry under the USDA National
Organic Program (NOP) is about idealism. It is not. It is
about protecting a marketing position for a narrowly prescribed
way of farming. There are sections of the rules and their
interpretations and (non)enforcement that make some idealists
run away screaming. “'Nuff said.” I’m just
warning you to go into organics with your eyes open.
Second, people will try to infect you with their particular
idealism, which can severely impact your profitability. Your
first goal in business has to be to make a profit so you can
later work toward your idealistic goals, or you will soon
be out of business—and never get to the idealistic goals.
I am an example of this.
The idealisms thrust upon me included:
Breed of cattle: There’s a lot of
man-years of experience that have served to make the major
dairy breeds major (Holstein and Jersey and their first-generation
crosses) as well as the minor breeds minor, and for good
reasons. Have the humility to abide by that collective wisdom.
Experiment with other breeds and complex crosses cautiously,
but don’t make them 25 percent of your herd at the
get-go. You can’t afford it.
Going seasonal. I tried to go spring seasonal.
It was a major contributing factor in my going out of business.
Open cows cost too much to feed to carry them until they
are bred to fit your seasonal niche. If you must go seasonal,
get that out-of-sync cow bred somehow, sell her, and buy
a cow in your seasonal window. Master the basics first,
then go seasonal if you still want it. A moderate position
is spring and fall calving. This works well for herds kept
outside
Artificial insemination (AI). Don’t
let all the hype about the superior quality of artificial
insemination genetics get in the way of just getting your
cows bred. Some cows are hard to catch in heat, but you
still have to get them bred. Bulls are very good at catching
cows in heat—probably a million times better than
you are—just be careful with them. It isn’t
widely talked about but humans “in heat”—including
girls you might think are too young—can cause aggressive
behavior in bulls. I’ve seen this happen on my farm
in this short period. If in doubt, plan the funeral for
the bull, and not your wife, your children or yourself.
Silage. Some people are quite certain
that silage is no good in any form, but these individuals
don’t pay your feed bills—your cows do. In much
of the Northeast, the only way you are going to harvest
high-quality, high-energy, high-protein forages is to take
the first cutting in the middle of May. In my area at that
time, the ground is too wet and the weather too rainy to
reliably put up dry hay of dairy quality.
By the time we get a reliable weather window—about
July—the forage crops are too mature and not worth
the fuel to harvest. Even harvesting two weeks late will
drop the protein content from 18 percent (at the prime date)
down to 9 percent. Making up that difference with imported
feed is cost prohibitive whether it is roasted soy or fancy
western alfalfa.
Soy. I believe the Weston A. Price Foundation,
of which I’m a member, makes valid claims about the
problems of soy in human nutrition. However, the cow’s
digestive system is quite different from a human’s,
and my cows did very well on roasted soy. When all factors,
including trucking costs, are factored in, there is seldom
a good substitute for roasted soy in the organic world.
Grain. Other people (see www.eatwild.com)
are concerned about any grain feeding to cattle. I agree
that it is relatively easy to make outstanding beef without
grain, because I’ve done it. The nutritional needs
of a modern lactating pregnant dairy cow at peak production,
however, are extremely hard to meet without some concentrated,
energy-dense feed such as corn and roasted soy. A no-grain
dairy herd can work for experienced graziers with a set
of well-honed conditions and situations, but it is not for
beginners with a mortgage to pay.
Excellent feed, lots of it
Is any of this “natural” or the way it happens
in the wild? No, but modern dairy cattle don’t exist
in the wild. Cows can survive on very little, but they are
only profitable on optimal feed and timely breeding, which
go together. As one wise farmer told me, “The cow’s
goal is to survive to tomorrow.” If this means turning
off the milk to preserve reproduction, they will do it. If
this means shutting down reproduction—including aborting
calves—they will do it.
Do not skimp in the area of feeding cows. Get a good nutritionist
and do whatever it takes to feed the cows right—or quit.
Get a good set of soil tests and fix what is wrong before
you think you can afford it. Do whatever it takes to store
up top-quality forages, including going without sleep, food,
a new truck or whatever.
A start-up dairy won’t work unless you can feed the
cowies ‘til they are well and truly stuffed full of
good food. Don’t count on custom operators or interstate
shipments. You must be able to bring in 80 to 100 percent
of your cows’ intake of top-quality feed from very near
your farm or organic dairying won’t work.
If you must be an idealist about all this, start with a family
cow or two. Sell the milk at full retail or take some value-added
steps. Allow your off-farm job—and/or your processing/retail
profits—to cover the hard learnings from your incidents
of misplaced idealism on the production side. We will probably
meet at a “micro-dairy” conference some day, as
I think that’s where I’m heading with my undiminished
addiction to cows.
Doubts about debt
I doubt that modern economics, especially debt financing,
is compatible with Christianity as I know it. Even mainstream
economic advisors point out that debt is very dangerous unless
you are the one collecting the interest. Banks have very little
flexibility under the law to help you out if you have a bad
year or a rough start-up. Borrowing more money after a rough
start-up, as I did, usually compounds the problem. The payments
start immediately but some mistakes, such as underfeeding
cows, take years to correct, if you ever do.
My bankers were impressed with my initial business plan to
enter the growing organic market with a stable pay price thanks
to a milk contract. Even so, I had to put in all my life-insurance
equity, all my home equity and all my retirement money. My
parents kicked in a good chunk, too. In the end, however,
the sale of my land and farm assets brought in just enough
to cover the commercial debt. My parents and I lost all the
money we invested, but I’ve not had to declare bankruptcy.
And I’ve emerged with rich experiences
Cattle are a blessing
I want to end this on a positive note. I believe that cattle
are a great blessing to man from God. They can take land we
can’t use for row crops or garden crops and make highly
nutritious food from it. Cattle can also provide companionship,
motive power, clothing, tools and then more cattle to feed
and clothe others.
There was debt and regret, sure, but there were rich moments,
as well. It’s hard to explain the joy of watching cows
graze on lush pasture…or the thrill of finding a healthy
newborn calf up and nursing when you go to round up the cows…or
the great taste of fresh milk.
I don’t miss all my cows, but some were hard to let
go of. For now, I need to focus my life on people and the
ministry, but I hope, somehow, someday, to have a few cows
as pets and experimental animals. There are lots of ideas
I want to try, such as grazing corn, or putting up an oats/peas/barley
mix for silage.
Let’s see, I only need 5 to 12 brood cows to have statistically
valid data… 
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