Should you get bigger? Should you get out? Or should you stay and milk it? The dairy industry is changing. And producers find their stage in life affects how they handle that change. The results will shape the future of Midwest dairying.

There are widely held misconceptions about dairying, even among dairy producers. For one, dairy is not a shrinking industry. In 2000, U.S. cows produced about 164 billion pounds of milk. That's a 35 percent increase over the past 30 years.

"And contrary to what some people believe, dairy is a profitable industry," said Dr. Archie Devore, MFA dairy specialist. "Any time a pound of milk buys 1.5 pounds or more of feed, profits are possible. With current milk prices and feed costing 7.5 to 8 cents per pound, this is a profitable business."

However, milking cows is more profitable for some dairy producers than others. For the past several years, mid-continent milk producers have been faced with stiff competition from western states, and it has taken a toll in terms of both cows and producers. Those still in the business are looking for ways to thrive, not merely survive.

"There is no cookie-cutter method to dairying," said Dr. Normand St. Pierre, Ohio State University dairy scientist. "Milk production has changed dramatically."

Speaking at last year's MFA Dairy Innovators seminar, St. Pierre outlined several strategies for coping with those changes:

1. Call it quits. For any of several reasons, dairy producers may decide to sell out.
2. Stay and milk it out. The operator may not be ready to retire, but his hairline is not where it used to be. He has a good equity and positive cash flow, but may not want to expand.
3. Expand. While bigger is not necessarily better, economies of scale apply to dairying. Expansion can improve both efficiency and profitability.
4. Specialize. This strategy means you stop operating a dairy in the traditional way: produce the feed, raise replacements and milk cows. You divide the operation into its basic enterprises and "farm out" those that are least profitable.

"I had milked since 1960," said Paul, who farms near the community of Tin Town, in Polk County, Mo. "After milking cows for that long, it was hard to sell them. It was an adjustment. I was lost for several days after we sold the cows.

"But it was a good time to sell out," he added. "Our cows averaged a little over $1,200; top cows brought $1,400 or more. We had grade Holsteins but we had used registered sires for years; we had a good herd."

The Skidmores used part of the dairy cow income to buy 62 crossbred beef stock cows. They had several motives for their transition out of dairying.

The couple has three grown children--a son and two daughters--but none of them was interested in taking over the operation. Also, in recent years, time and hard work had begun to take a toll on Paul's health. Two knee surgeries did not completely correct his joint troubles.

"And we were at the place where we'd need to get bigger if we stayed in dairying," he said. "If we expanded much beyond the 60 cows we were milking, we would have had to hire some outside help."

The couple made plans against the day they would sell their milk cows. A dozen years ago, Paul bought a school-bus route in the Pleasant Hope school district. The Skidmores invested in rental property. And, perhaps more importantly, they went out of dairying free of debt and with late-model haying equipment.

"Dairy cows were good to us," said Paul. "Some years were better than others, of course, but they provided us with a living and paid for the farm. Cows also helped us get the bus route and rental properties.

"We're still trying to get used to the change," he added. "Beef cows are a different proposition from milk cows. Our income is not as regular now, and managing a beef herd has new challenges. But we can make it work out all right."

A bonus of being free of the 24-7 schedule of milking cows is more time spent with their grandchildren, said the Skidmores. And Paul now has more time to devote to sideline pursuits, like restoring a vintage IH Model 340 tractor.

Stay and milk it
Jack and Wilma Lewis have milked cows since 1957 on their farm near Long Lane, in Dallas County, Mo.

"Like a lot of people our age, we started with very little," said Jack, who now is 67 years old. "We had to work for what we've got, but dairying has been good to us. In nearly 45 years, I've never seen a time when our cows didn't make money."

The Lewis' 70-cow, part-registered Holstein herd is still making money. But Jack and Wilma are ready to stop milking cows and take a "soft landing."

"Our timing was influenced by our son Mike's decision to pick up things here," Lewis added. "This is a good time for dairymen. Milk prices are relatively good. Feed prices are lower than they have been. And cow prices are good--it would be a good time to sell out, if that's what we wanted to do. We're on our way out, but Mike plans to take over the milking herd and young stock in a year or two."

The Lewises have cut back from the 90 cows in their milking string. They own good cows that put an average 68 pounds of milk in the tank each day.

"We don't burn cows out; we take care of them," said Lewis. "We have a 12-year-old cow in the herd that is still producing 19,000 pounds.

"This is not a 9-to-5 business," he added. "I've gotten up at 4 a.m. for so long that I no longer need an alarm clock. You've got to want to do this to make it work. To stay afloat in dairying, you have to take good care of your cows--and pay your feed bill first. But I wouldn't change a thing in these past 45 years."

Expand
Two years ago, Larry and Diana Ramaeker made the decision to expand from the 90-cow herd they were milking.

"Our old milk barn was shot; we had to build a new milking parlor," said Larry. "But to pay for a new barn, we had to milk more cows--and we had to get them out of the mud."

So the Ramaekers planned a major overhaul of their facilities at their farm in Texas County, Mo., just east of Mountain Grove. A new milk barn and free-stall parlor came off the drawing board, along with new feed storage and manure handling systems.

"Actually, the manure lagoon was a central feature; we built it first," said Ramaeker. "At that time, we drafted a nutrient management plan and applied for a DNR [Missouri Department of Natural Resources] operating permit.

"As part of the plan, we set up a double-crop corn and wheat silage program," he added. "We monitor the nutrient levels in the soil--especially phosphorus."

With the physical plant rebuilt, the Ramaekers began expanding the herd, primarily by buying heifers.

"It was slow going, because we insisted on heifers that were bred to Holstein sires; that limited the pool we chose from," said Larry. "We breed our adult cows AI and keep the heifers in the herd."

At the same time, the Ramaekers contracted to have their heifers custom-raised.

"That freed up some forage resources and eliminated the need for another full-time employee," said Larry. "Hiring someone else to grow our heifers allows us to concentrate on the milking cows and forage production."

The Ramaeker milking herd now is just over 150 cows, and 75 percent of them are first- or second-calf heifers.

The Ramaekers also began making provisions to take some time off the job. "Milking cows is a 7-day-a-week job," said Larry. "You can enjoy it, but you still need a break now and then, if only for a few hours. We are doing that now. Even short timeouts let you come back refreshed. I never understood before how some off-time allows me to clear my mind."

Larry Ramaeker was 38 years old when he began the expansion. The system he and Diana have built should last for at least another 20 years.

"By that time, the milk barn will probably be pretty well worn out," said Larry. "I'll be 60 years old and ready to retire."