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How two dairymen use competitive advantages to capture profits

Progressive Dairyman Editor Peggy Coffeen Published on 28 September 2018

Gaining an edge in a competitive marketplace requires keeping a keen eye on cost of production and looking for ways to control those factors.

During a Professional Dairy Producers’ (PDPW) dairy tour on July 17, two dairymen detailed their strategies for achieving profitability in a difficult market. Jay Richardson of Son-Bow Farms in Spring Valley, Wisconsin, and Dave Styer of Alfalawn Farms in Menomonie, Wisconsin, showcased their operations and explained how they both strive to control their costs but in very different ways.

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Son-Bow takes ‘big swing’ at cost control

Four years ago, Richardson’s 1,250-cow dairy was at a crossroads. He and the three majority shareholders who manage the operation realized their future depended on identifying areas where they could exert a change for a more profitable and sustainable future. For them, this meant looking beyond the milking parlor.

“I knew with our parlor and our size, I could not compete with anyone else on labor per hundredweight, so I had to figure out what other competitive advantage I could have,” Richardson recalled. This drove him to dig deep into the dairy’s numbers, particularly those related to the cost of hauling sand and manure.

At that time, as many as 10 truckloads of new sand were coming into the dairy each week, and sand-laden manure was being hauled out two to three times on a weekly basis.

“We were hauling a lot of stuff down the road with zero benefit,” he added. This prompted him to take a “big swing ” at cost control by investing in an innovative manure-handling system. Now, the dairy mainly utilizes recycled sand for bedding, bringing in only three to five new loads per month.

The technology takes it a step further with an ultra-filtration and purification process that results in a valuable fertilizer as well as clean water that will be safe to discharge back into the environment.

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“We anticipate 1,500 semi loads of liquid manure coming off the road … that adds up in a hurry,” Richardson said. While the system on his dairy has only been in full function for a short time, he is optimistic it will be a game-changer for cutting costs and also a win for the environment.

“If you, as a business, don’t have a competitive advantage, you won’t survive,” Richardson said. “But it’s up to you to figure out what that is.”

Efficiency and adaptability at Alfalawn Farm

At Alfalawn Farm, the Styer family realizes a competitive advantage comes along with knowing costs and seeking opportunities to increase efficiency and adapt to the situation at hand.

“One thing we’ve prided our farm on for a long time is our ability to control expenses,” said Dave Styer, who manages the dairy’s finances.

Producing high-quality, homegrown feeds is an example of that. They run 3,400 acres of crops, which provides the majority of feed required for the 2,000-cow milking herd and replacements. Waste feed goes to steers, which provide supplemental income. “We increased hay acres from 800 to 1,100 to 1,200 this year to try to push down the cost of purchased feed,” he added.

To capture efficiencies, the dairy expanded to its current size and added a 60-stall rotary milking parlor four years ago. “We dropped labor costs by 2 dollars per hundredweight with the rotary,” Styer said. “It used to take three people to milk 450 cows; now we can do the same thing with three people milking 2,000 cows.”

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They have found even greater efficiency with an automated pre- and post-dip system. “Once we got the automated dippers going, we were able to take two guys out of the parlor,” he noted.

However, getting better does not stop there; the Styers don’t settle for status quo. “We always ask … What are our weakest links? Then we try to look at a couple of these things every time,” Styer said.

Perhaps one of Alfalawn’s greatest competitive advantages is its labor force. At the helm are the fourth generation of the farm, led by Styer and his two brothers, Randy and Dale. All together, 14 family members work on the dairy, including many potential fifth-generation farmers.  end mark

Peggy Coffeen
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