Forward-thinking council works to revive Missouri’s dairy industry.

Dave Drennan dredges up an old saying about dairy farmers: “They’re married to those cows 365 days a year.” He wishes that in Missouri, they were married to a few more of them.

Drennan, executive director of the Missouri Dairy Association, hopes that efforts by the Missouri Dairy Growth Council lead to producers adding cows to their herds. Just as important, he and other council members want to boost the amount of milk that each cow produces.

“We’re 1.4 billion pounds short of milk in this state—that’s how much we import each year,” Drennan explained. “If you placed that milk in tanker trucks back to back, they would reach from St. Louis to Kansas City and beyond.”

According to Drennan, the number of dairy cows in Missouri dropped by more than a third, from 223,000 in 1990 to 129,000 in 2003.

“Producers continue to exit the business,” Drennan said, adding that his association’s membership reflects the trend, declining from 1,200 in 1995 to 650 members today. As producers’ average age continues to rise, “It’s too much work and not enough profit. Plus, a lot of dairymen work off the farm. As soon as their kids grow out of 4-H and Future Farmers of America, they’re done.”

In addition, farmers find it difficult to find or afford laborers willing to milk two to three times a day and feed around the clock.

Missouri isn’t alone. Aging and labor issues challenge dairies across the nation. In general, fewer cows are producing more milk. Yet Missouri ag leaders raised an alarm recently when the state dropped from 20th to 21st place in terms of milk production. Missouri houses a lot of small producers, tying for third place among those with herds of 30 or fewer cows. The state ranks among the bottom 10 in milk per cow.

Behind the statistics lies some good news—there’s room for improvement. Dr. Archie Devore, dairy specialist for MFA, Incorporated looks forward to the council helping farmers bump up herd numbers and productivity.

“We have seen new producers come to Missouri to start dairying because they see opportunities here they did not see elsewhere,” Devore said. “Land prices are lower and our climate is less severe in winter than in most other areas of the country. An improved dinner table with ample forages and grains would allow existing dairy herds to produce to their genetic potential.”

Growing dairy business would punch up state’s economy
Peter Hofherr, Missouri’s state director of agriculture, illustrates how dairy improvements could impact the state’s economy. “If we increased production to meet consumer demand in this state, we’d add an additional $240 million to our economy and as many as 2,720 new jobs,” he said.

A brochure produced by the Missouri Dairy Growth Council asserts that dairy contributes more than $261 million of gross farm income directly to the state’s economy, and generates an additional $203 million indirectly.

Interest in the council, created in January 2003, reflects growing concern. Members include dairy producers, farm organizations, state government entities, universities and related industry groups.

One of the related groups, MFA, sells feed, supplements, animal health products and other supplies to the industry, from rubber boots to fencing. “On a tonnage basis, 25 percent of MFA’s feed business comes from dairy,” said Dr. Alan Wessler, vice president of MFA’s feed division, and chairman of the growth council. A dairy cow, Wessler added, eats much more than other types of livestock—4 tons of feed a year, or about 3 to 4 percent of its body weight while being milked.

If dairy numbers decline further, council members worry that infrastructure supporting the industry may disappear, from feed suppliers to truckers. As Drennan said, “People wonder why places go out of business around the town square. As you lose dairymen, you lose your hometown vet, refrigeration repairman, feed dealer and farm supplier.”

Another council member, Kelly Smith, marketing and commodities director for Missouri Farm Bureau, especially wants to retain processing plants. “It takes a critical mass of milk to keep that structure in place,” said Smith, noting that the state has lost 13 plants since 1988. “We don’t need to lose any more,” he said.

Wessler reinforces a sense of urgency. “If the council’s going to work, it’s got to work now,” he said. “Once we lose our infrastructure, it’s gone, and it won’t be there to serve the next generation of dairy producers.”

Education could reap benefits
MFA’s ties to the dairy industry go deep. It provides free nutritional advice to producers who buy feed from the cooperative. “First we need to make sure we’re getting all the production we can out of the cows we have,” Wessler said. “Our staff formulates rations that target higher production. We also help with herd management, including cow comfort, along with reproduction and raising calves.”

Both Devore and Wessler would like to see the council educate producers further. “Increasing per-cow milk production would be the quickest way to stem the tide of vanishing milk supplies,” Devore said. “If existing cows produced an average of 10 pounds more milk per day, that would amount to nearly a half-billion pounds of milk, and we still wouldn’t be producing at the national average.”

Farm Bureau’s Smith added that farmers must learn about business opportunities. Understandably, aging farmers seem reluctant to invest in new equipment needed to increase production—especially if the next generation of family members shows no interest in the operation. “They don’t know if they want to get that big.” Smith said.

Devore suggested the council educate producers on how increasing herd size can prop up profitability. “Profit per cow can be generated independent of herd size,” he said. “But it requires a certain volume to generate the dollars needed to make a family living, pay debt and grow your business.”

The cornerstone of the council’s plan to educate and encourage producers remains under development. The group wants to raise funds for grant programs directed at expanding dairy efficiency and herds (see sidebar). In addition, it hopes to institute an educational Web site, and to train dairy employees in how to gain additional operational efficiencies. The council counts on the University of Missouri and other industry players to continue their educational efforts as well.

Lenders targeted for training
In addition to educating producers, the council updates lenders on the industry. In June, the council sponsored a summit of 36 ag lenders and other interested parties with the goal of expanding dairy’s access to capital. “We want to raise the level of knowledge about our industry,” Drennan said, including the fact that dairy prices hit a high mark recently. USDA estimates that producers earn about 28 cents of each retail milk dollar, improving improving cash flow.

Farm Bureau’s Smith weighed in on the importance of keeping lenders informed. “A producer might go into a bank and say, ‘I need fans and a misting system to keep my cows cool in the summer,’” he explained. “An educated lender knows that comfortable cows increase milk production, which should increase revenue.”

Tom Coats of Cabool State Bank knows the industry well, but his dairy customers dropped by half during his 15 years at the small, independent bank. He attended the summit to learn how to help customers meet future challenges. “The last two years have been rough, but the people with good attention to details and animal husbandry skills have an edge,” he said.

Even with financing in place, growing and new dairies may need to seek environmental permits. One of the first steps the council took toward creating a more favorable climate for dairy came in the regulatory arena. As Drennan said, “States around us promote the perception that they’re more friendly to dairy from a regulatory point of view.”

To address the perception, the council asked the state Department of Natural Resources (DNR) to name one person to specialize in the industry’s needs. Jerry Foster, environmental specialist for the department, now devotes his time to helping livestock producers meet regulatory requirements.

“Our regulations are not more stringent than other states,” said Foster. “They’re just different.” Primarily, he says, farmers must prevent run-off from leaving their property, and operations with more than about 600 dairy animals must acquire a permit.

The state Department of Agriculture recently commissioned a study, conducted by the University of Missouri Commercial Agriculture Team, to evaluate the state’s regulatory environment. “If we find that Missouri measures up unfavorably with other states, we will work with the DNR to alleviate these problems,” assured director Hofherr.

Larger herds attract producers
Beyond enhancing the business environment, Wessler would like to attract young producers to the industry. “Young people who were raised on the farm today want all the comforts of their city cousins, but are less likely to desire that around-the-clock commitment of their parents,” he said. “Some people manage their operation as a business and still enjoy the way of life. But first you need to gain economies of scale so you can afford to hire someone to help out.”

Like Missouri, Wisconsin saw a drop in its position as a dairy-producing state, from No. 1 to No. 2, losing out to California. Tim Griswold heads up a Wisconsin program designed to resurrect the industry. He agrees that operations must grow in size before meaningful industry growth as a whole can take place. A recent survey reveals that Wisconsin producers concur—bigger is better.

Missouri council members would like to follow in Wisconsin’s footsteps in arresting dairy declines. But to increase production to the point where Missouri can meet all of its own demand for milk, Drennan estimated it might take an additional 60,000 to 75,000 cows, depending on their output. But he, Chairman Wessler and other council members remain positive.

“We’ll just keep plugging away at ways to help people get started or expand,” Wessler said. “When producers get excited about what they’re doing, their operations grow.”

To learn more about the Missouri council, contact Gene Wiseman at the Missouri Department of Agriculture toll-free at (866) 466-8283, or e-mail gene.wiseman@mda.mo.gov.