There's room to grow dairies in Kansas
By Jennifer M. Latzke
Experts say Kansas is poised to grow its dairy industry in the state, but it will take innovative thinking to attract and retain them.
Kansas State University had its annual Dairy Symposium Oct. 23 at the Stanley Stout Center on campus. Researchers, dairy experts, and producers discussed what hurdles there are to dairy expansion, attraction and retention in the state and what the future might hold for the Kansas dairy industry.
The lead speaker, Normand St-Pierre, Ph.D., of The Ohio State University, discussed recent surveys that looked at the many varied factors that go into the relocation decision for small, medium and large dairies.
While there are no one-size-fits-all answers to why a particular dairy relocates to one area over another, there are some commonalities. For example, the survey showed that cash flow was the top of the list, followed by capital expenditures and then tax structure and incentives.
St-Pierre said for those surveyed, property taxes were ranked more important than income taxes and economic incentives were of modest importance. Those are all factors communities looking to attract dairies should understand as they discuss ways to attract dairies.
Waste management and laws and regulations dealing with manure were fourth, followed by the cost and availability of utilities at fifth. St-Pierre said the survey showed that at the middle of the list were items such as water availability and quality; availability of land; regulatory environment of the state; and transportation of product.
While these were in the middle of the overall list, it’s important to note, St-Pierre said, that within the subcategories of each, there were items that were ranked more important than others. For example, within the regulatory environment category, the actual laws and their friendliness toward concentrated animal feeding operations as well as judicial attitudes toward agriculture in the state were of relatively high importance. The complexity of the regulations could be dealt with, St-Pierre said, as long as there was clarity in the process.
Labor and markets were toward the bottom of the list, St-Pierre said. “Labor will move,” he said. “Larger opportunities will make it move.”
As for the specific site location, St-Pierre said the five most important location factors for any dairy are: availability of fresh water; availability of land to incorporate animal waste; average price of milk; quality of fresh water supply; and the complexity of the state and local laws governing waste handling and odor management. The five least important factors were: number of hoof trimmers in the area; established niche markets locally; proximity of an airport; proximity to cultural scenes; and proximity to recreational centers.
“So, where are the perfect locations?” St-Pierre asked. “There is no such thing. There is no one county in 3,300 counties in the U.S. that hits all 36 factors. There are trade-offs.” He added that growth in the dairy industry will occur with opportunities to export milk.
“Kansas is position to expand because milk markets are right next door,” he said. Texas, Oklahoma, Missouri, Arkansas are all states that are in deficits for milk production.
Mike Brouk, Ph.D., K-State associate professor, said the largest declines in production have been in the south and southeast, and Kansas is poised to fill those markets. When you look at the destinations for Kansas milk, he said, 31 percent goes into New Mexico and Texas, 28 percent stays in Kansas, 18 percent goes to Missouri and 15 percent to Oklahoma.
“Excess milk production can go in a lot of different directions,” Brouk said, especially with the efficiencies we now have today in processing it.
And there is a lot of milk to go around. In 2012, Brouk said the total number of cows in Kansas was 126,000 to 132,000 with a total milk production of about 2.7 billion pounds, and it’s been building since the early 1990s. “We’ve seen a 60 percent increase in dairy cattle numbers since 1996, and milk production has doubled since 1996,” Brouk said.
A lot of that has been due to expansions in western Kansas, as well as producers looking to keep their cost per hundredweight of milk down, rather than focusing entirely on the cost per cow per day.
“Our success is found in that information we share with producers is implemented on farms,” Brouk said. “Producers are very progressive.”
There are challenges to dairies in Kansas, though. Brouk said finding and retaining labor will always be an issue, as will marketing milk production. But water may be the key to the success of many dairies in the state. And producers and researchers will need to continue to work toward finding ways to conserve and recycle water more efficiently in the future, he said.
Billy Brown, with the Kansas Department of Agriculture, said the state’s dairy sector brought $519 million in on-farm receipts to the state’s economy in 2012. The growth potential he sees lies in increasing the number of cows and the number of farms. But that also will include a need to increase the processing capacity in the state. And, expanding the artisanal market for dairy products will help as well.
Brown encouraged those considering relocation to start with the state’s website, www.dairyinkansas.com. He also reminded producers that KDA will be hosting forums in November to discuss the regulatory process.
The afternoon concluded with a panel of young dairy producers discussing their own family operations and how they have expanded or innovated to stay efficient and profitable. The panel included: Nathan Campbell, Campbell Farms, Winfield; Ken McCarty, McCarty Family Farms, Colby; Justin Ohlde, Ohlde Dairy, Linn; Melissa Reed, Hildebrand Farms Dairy, Abilene; and Brent Buessing, Buessing Holsteins, Baileyville.
Jennifer M. Latzke can be reached at 620-227-1807 or email@example.com.