Dairy Teamwork and Profits

Combining forces to help farms succeed
By Kara Lynn Dunn

Photos by Kara Lynn Dunn.
Dave Magos (left) tours the new heifer barn with Dairy Profit Team members: Crop Consultant Jay Canzonier (center) and Nutritionist Bill Glenister.

To help New York dairy farmers facing critically low milk prices, the New York Center for Dairy Excellence has expanded its Dairy Profit Teams project, which was developed for just this challenging time, says Center for Dairy Excellence Director Mark Kenville.

“The New York Farm Viability Institute launched the Dairy Profit Teams two years ago in response to a low milk pricing cycle at that time. Now, in 2009, we are facing the combined challenge of low milk prices, higher input costs and the overall economic crisis that makes having a team even more critical,” Kenville says.

A Dairy Profit Team (DPT) is a group of advisors that meets regularly to advise a farm owner.

Team members selected by the farmer may include nutritionists, crop consultants, veterinarians, farm business specialists and other agricultural professionals, as well as employees and family members. Specialists are invited as needed. The farms participating in the New York project receive cost-sharing assistance to help pay industry professionals to serve on teams, although some discount or donate their time.

The Center for Dairy Excellence, housed at the New York Farm Viability Institute in Syracuse, trains facilitators—most often individuals not directly profiting from the farm business—who have a vested interest in the farm’s success, such as insurance agents or lenders. The facilitators prepare agendas to address priorities, keep meetings on time and hold participants accountable.

Ten farms in Jefferson and Madison counties established teams in 2007 as part of the two-year, $115,000 pilot project for New York State. Five teams in Wyoming County were added in 2008. The center expanded the project in those counties and launched new teams statewide this spring.

“We were seeing such positive results at the farm-level from the first teams that we wanted to get the process working for as many dairy farms as possible to help them weather this economic downturn. We believe the timing is critical to positively impact the future of the dairy industry in New York,” Kenville says.

The 15 dairy farmers and seven agribusiness representatives of the Jefferson County Dairy Focus Group prompted the idea of starting Dairy Profit Teams in New York.

New York’s Teams are modeled after the concept used by Minnesota and Pennsylvania farmers and report results from decreasing calf mortality and building more efficient facilities to reducing costs and planning to transfer the farm to younger family members.

Morning Star Farms Team dubbed a success

Dave and Lisa Magos are among the farmers piloting Jefferson County’s DPTs. They operate Morning Star Farms in Henderson, N.Y., and milk 415 cows. They own 1,200 acres and rent 200, and they grow their own corn and forages and put up haylage and snaplage for their milkers and young stock. They have two part-time and nine full-time employees.

Members of the Morning Star Farms Dairy Profit Team tour one of the new calf barns that is paying off in healthier, happier calves.

A major decision that resulted from their DPT was to build a new 110-by-184-foot freestall barn for cows and heifers, and two 28-by-60-foot calf barns.

After starting with 50 cows in 1982, the farm had grown steadily, acquiring neighboring land and farms. Acres and cows spread out over 7 miles required multiple daily trips with trucks and equipment.

“We wanted to get all our assets ‘home,’ but would not have built the new barns without the support of our Dairy Profit Team. We were looking at borrowing a lot of money to build new housing. We were raising all our replacements and making do with existing, sub-standard housing, thinking we could not afford anything else. The team looked at the numbers and agreed that building was the best plan.”

The barns were built in 2008, with the first heifer moving into the freestall barn in December of that year. The first calves were moved to their new housing in January 2009. The cost of the new barns was approximately $450,000.

Dave (second from left) and Lisa Magos (far right) discuss ideas with their Dairy Profit Team members: from left, Jay Canzonier, Facilitator Stephen Porter, Bill Glenister, Dr. John Ferry and Rick Porter.

“We are already seeing the payback in the vastly improved condition of the animals. The new housing is roomier, brighter and well ventilated. The cows are healthier and happier. The calves are growing better and will freshen one month sooner to speed our internal growth. The decision to build reduced our fuel costs, travel time and equipment stress over the road, and increased our labor efficiency and time management,” Magos says.

“These new barns also make it easier to move heifers into the next group. We open two gates and go between compared to having to get out the trailer and find three or four people to haul cows from place to place,” he adds. “We are making more milk now than ever and looking forward to more positive results in milk production income in two years when the calves mature into the milking herd.”

Other changes influenced by the DPT include developing an easy tracking system to assure each calf receives colostrum on time and hiring a Spanish- speaking middle manager to improve employee communication and efficiency.

Lisa says, “With the team’s help, we have inspected our spending, reduced costs and reviewed our insurance to be sure it is appropriate and not too much. We have changed fuel suppliers and reduced consumption. We use best-price shopping, detailed crop planning and take advantage of FSA and our milk cooperative’s incentives.”

A smoothly-working team

The Magos’ DPT includes their farm insurance agent and facilitator, Stephen Porter, veterinarian and farm consultant, Dr. John Ferry, Nutritionist Bill Glenister, Crop/Seed Specialist Jay Canzonier, and their former lender, Rick Porter.

The shaded areas of this map show how spread out the acres and facilities of Morning Star Farms’ operation are. Building new barns on the home farm have increased the business’ efficiency with cost savings in fuel, labor, time and equipment wear.

“My role is to organize the meetings and keep everyone on task, making sure we cover all the points of interest. We offer the best guidance we can and serve as a sounding board. We feel fortunate to be teamed with the Magoses, who are open to listening and considering suggestions,” Porter says.

“We started by asking Dave and Lisa, ‘What do you want to do?’ and offering ideas to develop ways to accomplish their priority of improving housing,” Porter says. “As we go forward, we are looking at ways to reduce costs and minimize financial risk.”

Lisa says, “We made a critical decision at the start to lay all our information on the table: financial statements, production records … for a comprehensive, honest evaluation of the business. Not holding back any information was one of the best choices we made.”

Magos says, “The team provides a critical assessment of the dollars and ‘sense.’”

He adds, “Our goal is to build the business so if one of the boys [Kevin, 19; Brian, 15; Jason, 6] wants to run the farm we can turn management over and help, or, if not, successfully sell and retire.”

The team meets off-farm to reduce interruptions. “Meeting off the farm put our employees in a position to have to solve problems without turning to us just because we are there,” Magos says. “Going off-site also forces us to take the time, to make an appointment, to meet. We combine meetings with lunch as an added incentive.”

DPTs recommended for others

“The current economic times alone should bring farmers to the team concept. When the need comes to tighten your belt, improve production, reduce costs or just consider new ideas, you can use the team to help figure the best way for your particular circumstances,” Magos says.

Jefferson County Agricultural Coordinator Jay Matteson says, “We saw Dairy Profit Teams as an opportunity to provide an immediate source of support for our dairy farmers. The teams themselves may not bring in a higher milk price, but they can help our dairies weather the storm until prices recover.”

Left to right: Brian, Jason, Dave and Lisa Magos balance a strong family life with their farm business goals. The members of their Dairy Profit Team respect this dual purpose when they brainstorm ways to keep Morning Star Farms running smoothly and profitably.

Molly Ames, farm business management educator with Cornell Cooperative Extension of Jefferson County, says, “The team process compared to working alone stimulates more discussion with new ideas and new viewpoints. It opens eyes to issues the individuals may not have thought about before. If two heads are better than one, what about five or six? Imagine what can be accomplished.”

For farmers who think they might be giving up decision-making authority to a DPT, Lisa says, “Our Team members weigh in on every issue we have, but ultimately the decision for what we do is up to Dave and me.”

Dave notes, “Sometimes we are surprised at the opportunities we come up with. For example, earlier this year when we began looking at ways to deal with the low milk prices, the question raised was ‘What if you add more cows?’ Who would have thought that would even be an option, but it appears that it could be and we are looking at the numbers in more detail.”

The Magoses will continue their team after the grant funding for their project start-up team ends later this year.

Lisa says, “We hope our story will help others make the decision to utilize a Dairy Profit Team. Dave calls our group his ‘Board of Directors’ and we are very pleased with the results. It has definitely been a positive experience for us and I am sure it would be helpful to others, especially in the dairy industry’s current financial situation.”

For more information on Dairy Profit Teams in New York, contact the Center for Dairy Excellence at 315-453-3823 or visit www.nyfvi.org.

The author is a freelance writer who keeps horses and sheep on a 100-acre farm in Mannsville, N.Y.