AGRIBUSINESS A FAMILY’S LAST ROUNDUP
Young Michigan dairy farmer auctions off 230 cows due to industry pressure
by Jim Harger jharger@mlive.com
http://www.mlive.com/business/west-michigan/index.ssf/2018/04/michigan_dairy_farmer_calls_it.html
ZEELAND TOWNSHIP — As a sharp wind swept across the farm fields of Ottawa County o n the morning of April 6, a cavalcade of pickups and livestock haulers converged on Daybreak Dairy for its last day as a working dairy farm. Dressed in heavy coats and warm boots, cattle buyers huddled inside a small white auction tent attached to a long red barn where 32-year-old dairy farmer Nate Elzinga had corralled the herd of 230 milking cows he meticulously built over the past decade. Outside the tent, Elzinga and his wife, Jenny, watched stoically as neighbors and friends stopped by to wish them well or ask for specifi cs about a cow on the auction list. Their fi ve children were at their grandparents’ house for the day so they didn’t have to witness the spectacle. Three weeks earlier, the Michigan Milk Producers Cooperative named the Elzingas the state’s Outstanding Young Cooperators for 2017. While accepting the award, Nate tearfully broke the news: They were selling their herd. Elzinga, his brother and his 73-year-old dad, who were partners in the dairy farm, decided they could no longer absorb the losses they were experiencing in Michigan’s brutal dairy environment. It was a heartbreaking decision for the couple, who met as teenagers at the Berlin Fair, where Jenny was displaying a 4-H beef steer. Low prices brought about by an over-supply of milk in Michigan meant the Elzingas could no longer keep up with costs of maintaining their herd, which was milked three times a day and produced 22,000 to 23,000 pounds of milk each day.
In general terms, Michigan’s dairy herd is growing faster than demand. “We just aren’t getting paid enough for our milk,” Elzinga said. “It’s supply and demand.” Elzinga has taken a job as a nutritionist for the Caledonia Feed Elevator, advising farmers how to make their cows as healthy and productive as the herd he sold. The family is moving off their family farm on Adams Street in Zeeland Township to a house in Hastings, about 20 miles away. “I’m not going to stare at empty barns,” Elzinga said. “I can’t do that.” Inside the tent, auctioneer Paul Warner, of United Producers Inc., read the ground rules promptly at 10 a.m., before his crew began herding each cow through a temporary corral ringed by more than 50 cattle buyers who sat in folding chairs or stood against the tent’s flapping walls. The bidding went quickly. Each cow spent less than a minute in the ring as bidders thumbed through an 82-page catalog Elzinga had prepared, listing the pedigree, production statistics, birth records and gestation history for each animal.
On the surface, Michigan’s dairy industry would appear to be healthy. West Michigan is home to several large processing plants that make cheese, milk-based energy drinks and dried milk that is shipped all over the world. But Michigan’s herd is growing faster than the demand, thanks to its temperate climate and abundance of water for the animals and pastures. And, thanks to improved genetics and nutrition programs, the cows are producing more milk than ever. Michigan’s milk production has surged in recent years, becoming the nation’s sixth-largest milk producer. In February, Michigan’s 428,000 cows produced 871 million pounds of milk, an increase of nearly 1 percent over 2017, according the National Agricultural Statistics Service. Michigan ranked second for average milk production per cow, according to the report. The state’s cows produced an average of 2,030 pounds of milk per month. With 230 milking cows, Elzinga said his herd was now considered small by industry standards. He can no longer compete with larger operations that milk thousands of cows around the clock. Elzinga’s cows fetched top prices, getting up to $2,600, according to David Bennett, a ring manager for United Producers Inc., the company that managed the auction and conducts dozens of dairy auctions throughout the Midwest. Typically, a good cow will sell for between $1,300 and $1,800 at auction, depending on their milk production, their age and breeding history, Bennett said. “There are also $800 cows,” he said. Because of the oversupply, milking cows are relatively cheap right now, Bennett said. “It’s cheaper to buy replacements for your herd than growing your own,” he said.
‘YOU DON’T MAKE ENOUGH’ Buyers at the auctions included large and small dairy farmers who hope they can make a profit by filling in their herds with productive cows, said Bennett, who also operates a dairy farm with his father and brother in Lapeer County. The root of the problem lies in the relatively low prices farmers are getting for their milk, especially in Michigan, where more milk is being produced than processors can handle, Bennett said.
Michigan farmers are getting between $1 and $2 less per hundred pounds of milk than farmers elsewhere in the Midwest. Because milk is a highly perishable product that must be shipped and processed within hours, distributors such as the Michigan Milk Producers Cooperative take what prices they can get. In some cases, farmers are dumping their milk rather than absorb the extra cost of shipping it to processors out of state, Bennett said. Farmers cannot stop feeding and milking their cows. “It’s tough right now. You don’t make enough to pay the bills,” said Roger Headley, a lifelong dairy farmer who attended the auction. “The big guys can buy everything in bulk. I don’t know what the answer is,” said Headley, who milks 150 cows with two of his uncles near West Olive in Ottawa County.
‘ONE OF THOSE WEIRD THINGS’ Elzinga said he finds it difficult to criticize the large operators who have created an oversupply in the market. “I don’t get into the game of big versus small. We all play under the same rules,” he said. When prices are low, dairy farmers are tempted to expand to gain efficiencies. When prices are high, dairy farmers are tempted to expand to take advantage of the profits. “Milk is one of those weird things,” Elzinga said. Meanwhile, out-of-state processors are moving into Michigan to take advantage of the over-supply. Foremost Farms USA, a large Wisconsin-based processor, recently announced plans to build a dairy processing facility on 96 acres of land it bought in a Greenville industrial park. The first phase of the project could be complete in 12 to 14 months and receive up to 6 million pounds of raw milk per day. “There’s an awful lot of quality milk being produced in Michigan,” Laura Mihm, a spokeswoman for Foremost Farms, said when the expansion was announced. “What we’re trying to do is manage the destiny of that milk so Michigan’s production is healthy now and in the future.