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Diversify your operation: There are more options than you think

Jen Bradley for Progressive Dairy Published on 19 July 2019

In today’s unpredictable dairy economy, farmers have looked for ways to diversify their income streams. This isn’t a new way of thinking, though organizations have realized offering a place for brainstorming and sharing of best practices to occur is a way to help those searching for ideas.

Earlier this year, Compeer Financial and University of Wisconsin Extension teamed up to bring the Resilient Farms Conference to Wisconsin Dells, where Tera Johnson, director of the Food Finance Institute (FFI) and founder of tera’swhey, began the day with a keynote presentation.

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At the time she built her first whey plant in 2008, 100% of those who said they would buy her products didn’t, Johnson told the crowd. The plant was built on time and on budget – but completed at the same time the recession began.

“You make it work; that’s what being an entrepreneur is,” she encouraged conference attendees.

Eventually, the company grew, and the whey product is now available nationwide. Johnson explained she had to get over the culture of business in Wisconsin to have legacy companies and the stigma of selling her brand. She advised the entrepreneurs in the crowd to think that it’s not necessarily a bad thing to bring in new owners to make something bigger happen.

“Money is complicated, especially on farms,” Johnson said. “If you have a plan, there is money out there. It takes a lot of work.”

A family farm focus

Darci Daniels of Hixton, Wisconsin, is a first-generation dairy farmer.

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Daniels, along with her husband Justin, milk Holsteins and Brown Swiss on their farm, Garden Valley Farmstead, and she also manages the books and the on-site farm store. From cheese curds and butter to grass-fed ground beef and steaks, roasts and beef sticks, the Danielses offer a variety of products from their animals. The store, which celebrated its one-year anniversary in May, also carries local honey, maple syrup, spices and other specialty foods.

“Everyone has their own story,” Daniels explained to a full room at the conference. She told others it’s best to do what they can, with what they have, where they are. For her, it was offering samples of cheese curds she had made to sell at a roadside stand. This was in 2017. She said people asked if the milk was from her cows, and the light went off that this could be the key if she could get curds from their cows’ milk directly.

“This gave us confidence,” she said. She found two creameries willing to process their farm’s milk into mild cheddar cheese and curds. The first load went to the creamery in March 2018 and, less than six months in, they had sold more than 3,500 pounds of cheese (6% of their total milk production). On the days the milk goes to the creamery, a private milk hauler comes and picks up the load.

This time of year, Daniels is busy with farmers’ markets; in addition, the farm store is open two days a week. She said they’ve made a lot of mistakes but also gained more confidence as the time has gone on. “We’ve realized we can’t make everyone happy,” she advised others. “Be true to who you are and be confident.”

Contract grazing

For farmers who have extra grassy land, Dick Cates has found a way to diversify and make a revenue stream with contract grazing. This Spring Green, Wisconsin, local was also a longtime UW – Madison College of Agricultural and Life Sciences educator and mentor.

He said it was 1967 when he first heard someone talk about managed grazing, and then he realized he could improve the landscape on his property. It took quite of a bit of maintenance time and was slow to build, but he told listeners the family was “so glad we did.”

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“Contract grazing has so many benefits,” he added. “You don’t have to own livestock, and you can still earn a monthly paycheck.”

As long as you do what the contract says, grazing the herd in the spring and summer, then return them in the fall, he said it can be a great way to diversify. A contract is vital to success, he said.

The best contracts lay out health protocols, a mediation clause, payment schedule, and other expectations, such as weight gains, Cates said.

“Think about things so that everyone’s on the up and up when starting in the relationship,” he said.

If possible, he added it’s nice to have experience grazing with someone else first. Cates said a grazing operation won’t happen overnight but, with some skills, it can be a unique income opportunity.

Cates’ son is now part of the business and just completed his third year grazing herds.

What else?

These are just a few options in which farmers have seen successful diversification methods, but many more can be found around the country’s dairy communities today.

Growing grains, Christmas tree farms, finding income streams from your woods (syrup, mushrooms, hazelnuts), growing flowers, agritourism, pizza nights – all of these were ideas discussed in breakout sessions that day in Wisconsin Dells.

Similar events are being held around the country. A simple Google search can help you find one in your area, where you can network and learn more about diversification methods which might work on your farm.

A variety of other resources are available to help farmers learn any laws, as well as best practices for various on-the-farm ventures. Johnson offers a boot camp through FFI (foodfinanceinstitute.org) that has received funding through the U.S. Small Business Administration, and the organization has help available through trained consultants.

“As farmers, a part of this is in you,” she said. “You need to have a certain level of risk taking, but you do that already. Part is in you, and the other part you will learn.”  end mark

Jen Bradley is a freelance writer in Chilton, Wisconsin.

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