Hard Times, Easy Choices

During economic hard times many farmers are forced to change, only to find success in those changes

Vaughn Sherman of Jerry Dell Farm in Dryden, NY thought he had arrived at success with his dairy business in 1995. His BST treated herd of 300 milkers had the highest average production level in Cortland County, and his Harveststore silos were full of alfalfa and high-moisture corn. But by the spring of 1997, the creditors were calling, his cash flow failed to meet his cost of production, and he was ready to talk to an auctioneer. A grazing advocate for the county stopped to talk to him about grazing. The hard times made the choice fairly easy: either give up the business and the cows he loved, or take a chance on putting the cows out to graze.

Today Jerry Dell is a successful dairy, with three grazing herds of 300 milkers each. They have brought four family members back into the business, and the future looks bright. This transformation isn’t guaranteed by the transition to grazing, but the key to success seems to be not what works on most farms but rather what works for the individual farmer.

Vaughn says that he was managing his farm to maximize production, a way that works for many operators. The problem was that it didn’t work for him. Managing a grazing operation seems to fit his abilities better than the production style that he was operating in 1995.

During this period of low milk prices most farms are experiencing hard times. Hard times can be a good time to evaluate your business and decide whether changes are necessary. Grazing is a proven way to produce milk in New York. Generally, there is less capitol required per cow, production may be lower but the cost of production will also be lower. It isn’t for every farmer, but it is a viable alternative if it suits your management style.

A key piece of advice if you are considering making any type of changes to your operation you need to have good records to guide you. Financial records allow you to monitor how the change is affecting your farm, before you have gone too far down the  road.

You Can’t Manage What you don’t Measure

Since 1996, The Department of Applied Economics and Management at the Cornell University College of Agriculture and Life Sciences has collected and published business summaries for 30-50 NY dairy farmers that make use of Intensive Grazing on their farms. The following are some of the excerpts from the Grazing Dairy Farm Business Summaries (DFBS). The Grazing DFBS is no longer published since many of the farmers have transitioned to organic production.

One of the biggest challenges confinement dairies face when they begin the transition to a pasture based dairy is the probable drop in milk production. For years there has been an unstated link between milk production and profitability. Many dairies will give up on the transition when the level of milk in the bulk tank starts to drop. For those that complete the transition and who have kept good records, they find that there is usually an economic return from pasture (as indicated by the table, below).

Profits are not the only benefit that NY dairy farmers have discovered by converting to a pasture based system. The Grazing-DFBS asks each year, “Has the adoption of grazing impacted your families’ quality of life?” The respondents have answered positively 80% of the time. Some of the other comments are:

• Environmentally friendly
• Reduced chore time
• Healthier cows
• More opportunity to involve the children
• Positive comments from neighbors and tourists

Intensive Grazing vs. Confinement Farms:  Average 1996-2006*

*This data was compiled from annual averages reported in the year-appropriate DFBS.  The data set for each year may include different farms, as the farmers who return surveys vary.