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Starting—and succeeding—as a Wisconsin dairy farmer (Research Brief #56)

Posted February 2001

You don’t need to take over a family farm, or even grow up on a farm, to be a successful dairy farmer in Wisconsin. You can milk 50 or 150 cows, and you can own or rent land. But you do need to identify how well your experience, financial resources, and farming support networks can help you meet your goals, and find ways to gain the skills and resources necessary to stay in business.

A 1996 statewide random survey of 321 new dairy farmers and follow-up interviews with 29 beginning dairy farmers found that these farmers are from more diverse backgrounds than ever before. This is vital information in an industry where the number of new farmers is not keeping pace with exiting farmers.

The survey found that, on average, beginning dairy farmers are in their early 30s when they start farming. Eighty-eight percent come from farm backgrounds, while 12 percent do not grow up on family farms. “Twelve percent of new dairy farmers with no family farm background is high by historical standards,” says research team member Doug Jackson-Smith.

Of the 88 percent of farmers who came from farming backgrounds, only 20 percent of those surveyed took over their parents’ farms. This may due, in part, to the survey design. Name changes on the state dairy producer list generated the survey mailing list, but family farm takeovers often do not involve such name changes. The remaining 68 percent of beginning dairy farmers started out on their own farm.

The three groups of beginning dairy farmers-those taking over the family farm, people with a dairy farm background starting out on their own, and those with no farm background-are fairly similar in terms of education level. In all the groups, at least half of all new farmers or their spouses have off-farm jobs-much higher than is true for established dairy farms. Farmers taking over a family farm tend to have larger herds and own more land than the other two groups. New farmers with no farm background are the most likely to use management intensive rotational grazing (MIRG).

Taking over a family farm

Compared to the other two groups, these farmers begin acquiring cows sooner, are the least reliant on off-farm income, and raise most of their own feed.

Interviews with seven farmers in this group show that a smooth transition between the older and younger generations is a key to success. Acquiring dairy management skills and equity are not significant obstacles (see table). A smooth transition is most likely when the older generation is close to retirement when the younger generation is ready to take over. Income from all sources needs to be sufficient to support both generations, and the older generation should be willing to let the younger generation take over farm management.

One of the farmers taking over the family farm told the researchers, “I’ve been pretty much running the farm since my sophomore year in high school, building equity in cows prior to purchasing the farm.” This farmer recommends building equity in cattle while working for another farmer and, given milk price fluctuations, choosing purchases carefully.

Farm background, different farm

Beginning farmers who grow up on dairy farms but start their own operations elsewhere typically own the least land of all the groups. The most successful farmers in this category focus on building herds that can fully employ themselves and their spouses. They keep their living expenses and debt loads down, purchasing land and buildings after they have built equity in their herds. Those that buy farms before cows find it challenging to meet their goals while making debt payments on land and buildings.

Although they are not directly taking over family land, other kinds of family support-sharing labor and machinery-is a key to these farmers’ success.

One of these beginning farmers milked his cows alongside his parents’ herd until he found a good rental farm. He continues to live at home, and he plans to use MIRG to become semi-seasonal. If he had to do it over again, he would start with more cows. He’d also cull fewer cows that didn’t calve in a narrow calving window.

Another beginning farm couple left a sharemilking agreement to rent a farm. They recommend that new farmers achieve independence as soon as they can by purchasing cattle and renting a farm.

No family farm background

“Just because beginning dairy farmers do not grow up on a farm does not mean that they have had little contact with farming,” says research team member Jennifer Taylor. “Most of them had some childhood contact with farming, whether through relatives, neighbors, school agriculture classes, or 4-H.” There are really two subsets of farmers within this group: those who worked on farms prior to starting their own farm and those who worked at non-farm occupations prior to farming. “In the future, we are likely to see more dairy farmers coming from non-farming backgrounds who are beginning second careers,” forecasts research team member Steve Stevenson.

Herd size varies greatly for these farmers, ranging from 20 to 130 cows, and is unrelated to farmer age or tillable acres operated. Half of the farmers in this group use MIRG.

Three of the ten farmers in this group worked for many years as farm employees. They built equity, farm management skills, and support networks.

Five farmers from this group worked non-farm jobs in early adulthood and came to farming later. Savings from previous careers, as well as business management skills learned off farm, helped this group get established. This group acquired dairy skills through mentors, networks, and on-farm experimentation.

The final two farmers in this group entered farming through the Wisconsin School for Beginning Dairy Farmers offered by CIAS and the UW Farm and Industry Short Course. The school helped these farmers get a head start by building their farm management skills and their support networks.

Several farmers credit MIRG with allowing them to get into dairy farming, since they could buy farms with minimal, older facilities and less equipment than is required on a confinement dairy. “But grazing was not found to be a simple answer to success for beginning dairy farming,” Taylor cautions. Two of the beginning farmers using MIRG left farming.

One member of this group has only held farm jobs since high school graduation and built his farm gradually. He advises new farmers to “…listen to other farmers, and realize you can’t have it all the first year.” Another farmer in this group kept working at his non-farm job for a year after he started milking until he had 70 milk cows. He says he could not have gotten into dairy farming without MIRG.

Obstacles facing three categories of beginning dairy farmer,
1996 Wisconsin survey
Percent reporting significant difficulty Family farm takeover Family farm background, on own No family farm background
Maintaining adequate
cash flow
50% 56% 64%
Acquiring equity 16% 36% 31%
Finding a good farm 3% 20% 14%
Herd management experience 6% 9% 33%

Beginning farmers who leave farming

Of the 29 farmers chosen for the interviews, five left dairying between the mail survey and the interviews. Three exiters had a family farm background and were on their own, and two did not have a family farm background. Four more were facing significant difficulties, including two taking over a family farm.

Insufficient management skills, along with debt management and the acquisition of assets that did not prove to generate sufficient revenue, caused the most trouble for these farmers. Their major obstacles were low initial equity, insufficient cash flow, weak social support, health problems, natural disasters, production problems, and lack of management skill.

“We did not find that people lacking farm backgrounds were more likely to experience significant problems than other beginning farmers,” says research team member Brad Barham. He adds, “One of the most important findings of this study is that people of different ages and career stages, using different enterprise strategies and career paths, can all succeed as dairy farmers.”

Dairy entry project research team

Brad Barham, Program on Agricultural Technology Studies (PATS)
Doug Jackson-Smith, PATS
Steve Stevenson, Center for Integrated Agricultural Systems
Jennifer Taylor, Research Associate

Published as Research Brief #56
February, 2001