Monday, January 11, 2010

Missouri Dairy industry revived by New Zealand Farmers

By Phillip O’Connor, Lee Enterprises

VERNON COUNTY -- Kevin van der Poel remembers the skepticism and suspicion when he moved here four years ago from New Zealand with a newfangled approach to raising dairy cattle.

He heard the doubts, peppered with a tall tale or two.

When he started construction on rock walkways for moving cattle between pastures, the rumor spread that he was building housing for victims of Hurricane Katrina.

Some locals thought his cows seemed too thin.

“There was plenty of people who had negative opinions,” said Bernie VanDalfsen, who had farmed in the area for more than two decades.

On and on, van der Poel heard the chatter. He was a foreigner who had purchased a prized farm and had a different way of doing things.

Some folks told him he would fail, though you would be hard-pressed to get many of them to say so now.

Many stakeholders in Missouri agriculture are crediting van der Poel and his colleagues with boosting the state’s dairy industry, which had been reeling from deep declines.

He is one of a handful of New Zealanders who in the past few years have invested $100 million in Missouri’s dairy industry, which annually generates more than $900 million in economic effect.

The New Zealanders operate four dairies — three in Southwest Missouri and one in the Bootheel — and own almost 10 percent of the state’s dairy herd.

With milk prices so low and many dairy farmers losing money, the New Zealanders’ low-cost methods, which mostly involve a different way of feeding cows, are luring converts.

“Their impact has been so significant in our state that it’s hard to get your arms around it,” said David Drennan, executive director of the Missouri Dairy Association.

But, acceptance has come much more slowly.

Tony Finch understands why some people might resent the New Zealanders’ different approach and, ultimately, their success.

“People see that as a threat or a degree of arrogance that we do it right and they do it wrong,” said Finch, general manager of Grasslands Consultants, another New Zealand operation, with 9,000 cows on 10,000 acres around Monett.

“That’s been a struggle — to convince people that what we’re doing is not a threat to what they’re doing, but another way of doing it.”

In many ways, the New Zealanders are returning Missouri dairy farmers to their past.

Traditionally, all Missouri dairies were pasture-based. But, in the 1970s, many began to use confinement operations and increased grain feeding to boost milk production.

In the Ozarks, where most of the dairies are, costs rose as more feed needed to be delivered and more manure needed to be removed. Labor was scarce.

Farm kids were moving away, unwilling to work the intensive hours confinement dairies required.

Shrinking profits and volatile markets drove many out of business or into other types of farming.

As recently as 1975, the state had 20,000 dairy farms and 333,000 dairy cows. Today, there are about 2,000 farms and less than one-third the number of cows.

A decade ago, businesses, farmers, bankers, academics and others gathered around a table in the Greene County Extension Office in Springfield to confront the crisis.

The group realized the business practices of the state’s dairy farms needed to improve.

One way was to tap into one of the state’s great renewable resources — grass. Missouri’s moderate climate, rainfall and short summers and winters make it ideal for growing the kind of forage cows can’t resist.

University of Missouri Extension stepped up its work with the few farmers trying to run pasture-based dairies. The program grew slowly. Most grazed fewer than 100 cows.

“Most of the industry saw it as a stop-gap measure to keep small dairy farmers alive,” said Joe Horner, an economist with MU’s commercial ag program.

Then came the Kiwis.

“They brought in a whole different level of scale than we were used to,” Horner said.

New Zealanders are considered among the most-efficient dairy producers in the world. As a result, much of the country’s suitable land has been converted to pasture, driving up prices and forcing dairy farmers there to look overseas for new opportunities.

Van der Poel, 46, had farmed for 20 years, recently remarried and wanted to expand. The couple found land in Vernon County for $2,000 an acre that would have cost 10 to 15 times as much back home.

Also, because Americans consume most of the milk produced in the United States, they thought prices would be more stable than in New Zealand, where almost all milk is exported.

The operation, which the van der Poels run out of a nondescript yellow barn set back off a rural highway, pumps about $6 million annually into the local community, he said.

They employ 28 people, about a third of the number required

to run a confinement dairy with a similar-size herd.

Despite any differences, newcomers and natives say they have learned from each other and incorporated methods once unique to each country.

New Zealanders have learned to farm in what they call the Midwest’s “big weather,” which sometimes means supplementing grass with grain. Missourians have learned to better manage pasture.

Still, van der Poel said, he has found farming in Missouri more challenging than he anticipated.

There’s also the cultural divide. In New Zealand, van der Poel was surrounded by other dairy farmers.

“At parties, all the men talk about are cows and grass,” he said. “It’s not like that here.”

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