Expertise in niche industries offers opportunity for economic growth in the New North
Story by Sean Fitzgerald
WHATEVER CONNOTATIONS the dysphemism “factory farm” brings to mind seem to melt away after listening to Jim Ostrom for just a few minutes. The partner in Milk Source Holdings, which raises more than 15,000 dairy cows at three farms across the greater Fox Valley, views agriculture far differently than did his grandfather’s generation.
During World War II, there were more than 140,000 dairy farms in Wisconsin, nearly all small, family-run operations. Today there are less than 13,000 dairy farms operating across the landscape of Wisconsin.
“A lot of people believe the reason for that is financial, but it’s not,” said Ostrom, who earned a degree in agricultural economics from the University of Wisconsin-Madison. “It’s about lifestyle, and people just aren’t choosing that lifestyle anymore.”
At the same time, the global population has blossomed from 2.5 billion at the end of World War II to more than 6.8 billion today, with projections from the United Nations that the global population could top 9 billion by 2050. The prospect of feeding more and more people with fewer farms means technological innovation needs to play an increasingly important role in farming, not just in dairy, but in all segments of agriculture.
“The tools my grandfather’s generation had could feed 2.5 billion people, but those same tools couldn’t feed (the population of the world) today,” Ostrom said.
Leading worldwide expertise in several areas of advanced agriculture is clustered in northeast Wisconsin, and offers a dynamic opportunity to develop the future economy of the New North.
Large scale dairying
MILK SOURCE’S THREE FARMS run with the same efficiency of the leanest manufacturing operations. The company’s Rosendale Dairy in Fond du Lac County, which opened in early 2009 with a herd of 4,000 and expanded to 8,000 cows earlier this year, sports a pair of carousels – each capable of holding 80 cows at a time through their three-time daily, 8-minute milking. Between Milk Source’s three dairies, production is at an estimated 1.3 million pounds of milk each day, enough to fill 32 tanker trucks for their daily run to the cooperative.
Ostrom contends the greatest advances in dairying during the past 50 years focus on cow comfort. A healthy, stress-free and more comfortable cow produces greater volumes of milk, and Rosendale Dairy designed its $70 million investment around cow comfort and the most environmentally stringent agriculture operation in the state.
The two separate 4,000-cow freestall barns include a cross-ventilated cooling system which keeps summer temperatures up to 15 degrees cooler than outside. Among Milk Source’s staff of nearly 80 employees at Rosendale Dairy – the company has an estimated 180 employees altogether – one is employed with the sole responsibility of hoof care, checking the cows’ feet each day to ensure there’s no signs of stress.
On the environmental side of the operation, the dairy includes a storm-water detention pond and a separate waste-storage lagoon. Not a single drop of water – from precipitation or otherwise – runs off from the property, which is completely contained. Cows are bedded in sand, and a fleet of front-end loaders work around the clock changing out the sand and waste from the cows and transferring it to a state-of-the-art sand and manure separation system at the dairy.
The solids from the manure produce a rich fertilizer sold to many of the growers in the vicinity of its dairy operations. Each cow produces the equivalent of an estimated 1.3 acres worth of organic fertilizer each year. And the liquid components of the waste are treated to levels higher than the standard for municipal wastewater treatment facilities.
Rosendale Dairy, like Milk Source’s other operations, doesn’t grow crops of its own for feed. Rather, it contracts with neighboring farmers to grow, harvest and store sustenance for the cows. The dairy purchases about $4.8 million worth of feed each year from 15 local growers and four separate harvesting firms. Combined with other local businesses who provide services such as transportation, veterinary care and other maintenance work, Rosendale Dairy boasts an estimated annual economic impact in the range of $33 to $35 million. That supports thousands of jobs. The company’s other two dairy operations, the 6,800-cow Tidy View Dairy near Kaukauna and the 2,700-cow Omro Dairy, provide additional economic impact of $25 million and $11 million, respectively.
Rosendale Dairy ranks as the largest single dairy operation in the state, one of more than 280 operations in Wisconsin supporting a herd of 500 or larger, according to April 2010 data from the state Department of Agriculture, Trade and Consumer Protection. But even Milk Source had its humble beginning as a small family farm. The company started out 16 years ago between Ostrom and partners John Vosters and Todd Willer with 30 cows at Tidy View Dairy near Kaukauna. The farm had been started by Vosters’ father, Ted, a generation earlier.
Today, Milk Source is planning a fourth large-scale operation with a planned 4,300-cow dairy in Adams County which it targets opening by the spring of 2011. The company expects to invest about $35 million into the new facility, including the property, new buildings, cattle and inventories.
As more and more consumers become further detached from agriculture than the manner in which generations before us related to the farm, it becomes more difficult for the average consumer to recognize and understand how an operation of such magnitude can be controlled in an economically-efficient, environmentally friendly manner which upholds outstanding treatment to its livestock. Ostrom acknowledges changing that cultural paradigm remains one of the greatest challenges for himself and his colleagues.
“Whether you have 60 cows or 600 cows, you have a responsibility to explain agriculture to the public,” he said.
Bio fuels off the farm
WHEN THE AVERAGE CONSUMER THINKS about dairy operations, they think about cows producing milk. And only milk. But for every pound of milk a cow produces, it also produces another three pounds of manure.
That manure produces methane gas, which can be harnessed and burned to generate electricity. Bio-digesters help accelerate the breaking down of the manure, which allows operators to eventually separate the solids from the liquids. The solid byproduct can be used as livestock bedding, sold as a potting additive, and is even used as a building material composite in some products like particleboard. The remaining liquid is a low-phosphorous, highly mineralized fertilizer that can be sold back to other neighboring crop growers.
“When you think about the number of cows that there are in Wisconsin, and the trend that’s occurring in dairying (fewer farms, larger scales), as well as the price point for technology of anaerobic digesters, the market potential for Wisconsin – and northeast Wisconsin in particular – is pretty high,” said Jay Moynihan, the community resource development agent for the UW-Extension in Shawano County.
During the past three years, Moynihan has worked with Green Valley Dairy in northeast Shawano County, which went online three years ago with three digesters and three generators. The 3,400-cow dairy sells 1.5 megawatts of electricity back to the grid each year, as well as selling its solid and liquid byproducts as raw materials to a variety of industries.
Wisconsin’s agriculture industry supports more anaerobic digesters on the farm than any other state, and northeast Wisconsin is gaining quite a bit of expertise around the industry, Moynihan said. Local firms are building a resume of experience siting and installing the generators on the farms or servicing them when a maintenance issue arises. Most of the digesters and generators are currently manufactured in Europe, where use of anaerobic digesters in agricultural settings has about a decade head start on the U.S., but Moynihan believes more and more local manufactures could get into the role of producing component parts for this growing industry.
Intelligence in artificial insemination
AS THIRD WORLD COUNTRIES around the globe become more affluent and earn higher incomes, they traditionally demand higher levels of nutrition, placing heightened demands on their food supply and the output of their country’s agricultural industry.
As these markets enhance their agricultural aptitude, they need to provide better genetic intelligence to grow their herds, and some of the leading expertise in the artificial insemination industry comes from northeastern Wisconsin organizations like Waupun-based East Central/Select Sires and Shawano-based Cooperative Resources International.
In fact, CRI was recognized with the 2010 Governor’s Export Achievement Award this past May for its successful growth in global markets. CRI’s subsidiary, Genex Cooperative, sells its products in 60 different countries, with international exports this past year surpassing the amount of beef semen it sells domestically. It’s an industry ripe with technological innovation being delivered right out of the New North.
“Some of the big technological advances we’ve worked with in recent years have been with gender-selective semen,” said Glen Gilbert, vice president of production for Genex, who said their product can offer farmers a 90 percent chance of getting a heifer calf. “They literally sort sperm cells based on DNA. It’s really quite something.”
In addition, Genex has built a reputation for its genetic testing products and services to help farmers determine the health of their calves – as well as characteristics such as its ability to produce milk – from the day the calf is born. Such genomics allow farmers to more efficiently improve their herd and cut down on herd care expenses in the future.
Whether in large-scale dairy operations, agriculturally generated bio-fuels or artificial insemination, clusters of expertise are being built around these segments as each grows in northeast Wisconsin. From manufacturing services to marketing assistance for products specific to each area, there’s an incredible amount of opportunity for the region to grow its future economy through the agricultural arena in which it always has.