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Dairies, and their problems, come in all shapes and sizes

March 31, 2019 GMT

WABASHA COUNTY — “Forty-nine of those are mine.”

Dairy farming is in Staci Sexton’s DNA.

Sexton is the owner of Schoene Kuh, a dairy near Millville in Wabasha County. In fact, her dairy is more like a dairy within a dairy.

Sexton, who is in her early 30s, runs her dairy within the dairy where she grew up/ Irish Ridge Dairy is owned by her parents. After growing up at Irish Ridge, she went away to college. After studying engineering for a few years — “I did a few internships, but I didn’t care to sit behind a desk” — she changed her major to animal science with a focus in dairy production.

She’s not the only one. Her youngest brother, Lance, has joined her as an employee on the dairy. Her oldest sister and her husband own a dairy, and that sister is the regional milk inspector. Her other sister works as a field representative for Land O’ Lakes. That sister’s husband works for Midwest Livestock Systems. Her other brother works for Compeer Financial.

The combined dairies— her business and her parents’ business — milk 127 cows. Sexton also owns 40 percent of the farm’s 300 acres, but it’s all part of a process that will have her and her youngest brother taking over the whole business once her parents fully retire.

Growing herds

With dairies across the nation dealing with a tough economic environment, moving that dairy from one generation to the next — the Sextons’ dairy has been in the family for 163 years, two years longer than Minnesota’s been a state — is one of the many difficulties dairies face today.

It’s also one of the reasons dairies continue to grow, and small dairies continue to close.

Marin Bozic, an assistant professor in applied economics who studies the dairy industry for the University of Minnesota, said that each year, 3 percent to 5 percent of dairies close each year. In many cases, those closures come because the next generation isn’t moving back to the farm, or the finances won’t work to make that transition feasible.

That’s why, decades ago, he said, you’d see dairies expand from 20 cows to 40, or a generation ago expand from 40 to 80 head in the herd.

Kevin Siewert has four sons. “Two want to come back for sure, I think,” he said.

Siewert, owner of Hyde Park Holsteins near Zumbro Falls, milks 520 cows twice daily. However, the farm is permitted for 1,680 animal units. “We can grow another 300 head without going through the permitting process,” he said.

The dairy has been at 520 head since 2011. But, Siewert acknowledges that the trend is herds are getting bigger even with farmers getting more milk per cow, because if there’s one thing that’s certain it is the dairy industry continues to change.

“We lost 300 dairies in Minnesota last year,” Siewert said. “It’s harder to find people who want to do what we do.”

And when people do want to run dairies, they face resistance from groups that try to prevent dairies from running their business in a way that suits them, he said.

Transition plans

Little Red Dairy doesn’t plan to grow, said Alan Miller, who runs the farm with his father, Bill Miller.

Living next door to the largest dairy in Wabasha County, Alan Miller said he’s not a fan of dairies expanding into the large-scale size that generates public outcry. That neighbor, he said, utilizes all the neighboring land for its manure management plan — a state-regulated plan for spreading millions of gallons of manure as fertilizer.

“They’re going to have all the land, no matter what it costs,” Bill Miller said. “They have to have it to get rid of their manure.”

Alan Miller added that he sees the big guys getting bigger and the little guys getting phased out. He said 10 small dairies would take care of the land, take care of the agriculture community better than one big dairy farm.

To make that generational transition, Alan is slowly buying out his father’s stake in the business. He’s already bought some of the machinery, and he owns 25 percent of the herd, he said.

But the big move, he said, is the value-added component of their business.

Using an old semi trailer as a shed, the Millers have started making cheese curds and selling them at farmers markets and local grocery stores.

“Right now, we make cheese one to two days a week, and it’s maybe 10 percent of our milk those days,” Alan said. “We’re just trying to make things pay for themselves on the creamery end.”

That’s a tall order. Anything made of stainless steel, which is pretty much everything related to the creamery, means opening a checkbook and writing a big number.

Still, it’s a new revenue stream that, with luck, will eventually pay off.

“There are a lot of what ifs.” Alan said. “You don’t know if it’s going to work.”

The ‘other’ dairy

In the late 1990s, Josh Moechnig looked into growing his 100 herd dairy.

“I wanted to expand like everyone else has to,” he said. His initial plan was to go to 200 head, but the bank said to fund the expansion he’d need to go to 500 head. “I decided that plan wasn’t for me.”

Today, Moechnig Farms is a certified organic dairy milking 130 cows.

Where most dairies are dealing with milk prices below $18 per hundred weight, Moechnig gets $26 per hundred weight from a co-op that limits production to keep pricing stable.

On 850 acres — he owns 600 of them — he grows hay, rye, barley, oats and corn to feed his cattle. He uses no chemicals, that includes fertilizers, herbicides or antibiotics.

“There’s no magic bullets,” he said. “We do a lot of cultivating for weed control. It takes more time. You’re trading chemicals for work with labor and iron.”

Moechnig said he’s not a proponent of larger dairies, but he understands farm owners — business owners — have rights.

“I don’t like seeing it, but that’s the direction we’re going to go,” he said.

Most dairies milking 130 cows don’t see the kind of scrutiny large dairies face. Those with more than 1,000 animal units require permitting from the Minnesota Pollution Control Agency. But to keep his certification as an organic farmer, Moechnig’s farm is closely monitored. To him, it’s worth it in order to have the kind of farm he wants.

Wabasha County Commissioner Brian Goihl, who himself works in the dairy industry, said that if smaller dairies were required to manage the amount of paperwork large dairies manage, it’d put most small dairies out of business.

Not that small dairies don’t have paperwork. Sexton said every drop of manure she spreads on every field is logged. And when she built a new heifer barn in 2016, the MPCA was there to approve the design and build every step of the way.

Wabasha County Commissioner Brian Goihl, who works in the dairy industry, said the difference between large dairies and small dairies is simple to explain.

“On a small scale, it’s your life,” he said. “On a big scale, it’s more of a business.”

Big or small, Sexton said there is room for dairies of any size.

“As long as there’s a milk market, our co-op buys our milk,” she said. “In general, we just keep trying to chug along. I don’t feel like I have to expand, and the big dairies aren’t threatening us or anything.”

Sexton said she likes the life she’s chosen.

“I think a lot of it is how a farmer wants to manage his business,” she said. “I don’t necessarily want to manage employees. And I can do anything that needs to be done; milk, feed, drive the skid loader. I like being able to pick and choose what I do and when I do it.”