Attracting New Dairy Farm Ventures - The Vreba

Attracting New Dairy Farm
Ventures - The Vreba-Hoff
Experience
Cecilia C.M. Conway
Vreba-Hoff Dairy Development LLC
Agenda
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Introduction to Vreba-Hoff Dairy Development
Why are Foreign Farmers Relocating
Key Success Elements
Dairy Development Positives
Dairy Development Challenges
Current Outlook
Dairy Development Opportunities in the South East?
Questions
Introduction
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Vander Hoff brothers
began dairying in 1990
with 80 cows
In 1997, partnered with
Dutch cousins to build a
3,000 cow dairy facility
in Hudson, Michigan
In 2000 the second
3,000 cow facility began
operation
Introduction
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Vreba-Hoff Dairy Development LLC
– Established in 1998
– Private, family-owned firm
– Located in Wauseon, Ohio
– Broker new dairy enterprises in Michigan,
Ohio, and Indiana
Introduction
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Vreba-Hoff Dairy Development assists with:
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Sale of Real Estate Overseas
Identification of Possible Project Sites
Recruitment of Project Financing
Application of Appropriate Visas
Application of Necessary Permits
Coordination of Project Construction
Coordination of Family Re-settlement
Introduction
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Since 1998 Vreba-Hoff has developed:
– 2 Vreba-Hoff facilities in Michigan
– 7 Other facilities in Michigan
– 9 facilities in Indiana
– 20 facilities in Ohio
– 17 facilities under construction or
development
Total 55 new dairy projects
 Equals 62,000 cows
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Introduction
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Why Concentrate within the Midwest?
– Temperate Climate
– Large grain production provides a consistent and competitive
supply of forages and opportunities to partner with growers
– Good access to metropolitan areas for social activity
– Over 70% of population within 24 hours providing a strong
and accessible market for milk sales
Background on why
Farmers are relocating
from The Netherlands. . .
Dairy Farming
in The Netherlands
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Country
– Small Land Area
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Georgia is 3.7 times
larger than NL
– High Population
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Population of 16
million
Georgia’s population is
approximately 50% of
NL
Dairy Farming
in The Netherlands
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Average
herd size:
52 cows
Average
farm size:
79 acres
Based on
a quota
system
Dairy Farming
in The Netherlands
Dairy Farming
in The Netherlands
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Market Conditions
– Constant pressure to take agricultural
land out of production for housing or
industry
Price of land in 2000 was $12,382/acre
 Land prices increased 18% between
1999 to 2000
 Cost to Expand Dairy by one cow - $34,000
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Dairy Farming
in The Netherlands
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Future Outlook
– Number of farms
expected to decrease
– On Average 25
Dutch Dairy Farmers
move to the USA
each year
(Source: Rabobank International)
Keys to a Successful Dairy Project
Keys to Success
Farm Design to Promote Milk Production
 Sound Farm Business Management
 Minimize Investment in Real Estate
 Partner with Local Crop Growers
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Farm Design
 Focus
on Cow Comfort & Health
– Freestall Barn Design
Constant access to feed
 Sand bedding keeps cows cleaner and drier
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Easier monitoring of cattle
Farm Design -Freestall Barn
• Feed can be
accessed at all times
•Adjustable side
curtains to promote
ventilation
•Fans are utilized to
cool in summer
•Some Farms have
incorporated spray
Mists for cooling
Farm Design – Milking Center
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Natural lighting benefits
staff and animal herd
State of the art
technology for managing
dairy herd health
Farm Design – Milking Center
•Each cow is milked three
times per day
•It takes one hour to milk
140 cows in a double 16
parlor
Farm Management
• Most Farmers train 6 months
at an existing facility
•VH partnered with a Dutch
University to provide intro Farm
Management courses
•Farmer concentrates on
business and employee
management vs “hands on”
work
Farm Management
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Trend toward larger dairies provide
owner more labor flexibility and
economies of scale
Increasing milk production per cow
due to breeding methods such as
artificial insemination and improved
feed rations
Minimize Purchase of Real Estate
•Real Estate is minimized to reserve capital for herd
investment
•Approximately 80 acres is required to construct a
1500 cow dairy facility
Partnership with Local Crop
Growers
Dairy Farmers partner
with local crop
farmers to produce
Feed for the cattle…..
Partnership with Local Farmers
Direct partnership with crop
growers gains more consistent
feed
Local Crop Growers
reduce reliance on
commercial fertilizers
by using dairy manure
Dairy Development Positives
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Positive Economic Impact to Rural
Communities
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New Agricultural Employment and
Business Opportunities
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Help Retain Ag Related Services
Dairy Development Positives
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Economic Impact
– Each farm contributes approximately 3 million
dollars annually to the local economy
– Each job created at the dairy creates 2.25 jobs in
other sectors of the industry
(Source: The Ohio State University Extension)
Dairy Development Positives
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New Business Opportunities
– Heifer Raising
– Feed Production
– Calf Raising
– Custom Manure Applicators
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New Career Opportunities
– Herd Managers
Dairy Development Positives
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Addition of new dairy producers helps
maintain infrastructure for dairy
producers of all sizes
– Dairy Processors
– Veterinarians
– Milk Equipment Suppliers
– Ag Equipment Dealers
Dairy Development Challenges
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Opposition
– Large Farms perceived as “Factory Farms”
– “Not in My Backyard” Syndrome
– Media and other vehicles report inaccurate
information
– Environmental Concerns
– Increased Regulation
Dairy Development Challenges
Dairy Farm and Milk Production – Tri-State Area
Source: USDA National Agricultural Statistics Service
•New Farms are
replacing
livestock lost to
attrition
2002
12,510
702
Total Milk
Produced
Total
Cows
1992
12,419
798
Current Outlook
Dairy Producers from other Countries
showing interest
 More scrutiny by environmental
regulatory agencies
 Other states or organizations vying for
dairy producers
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New Dairy Development in the
South East?
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The Positives
– Demand for Milk Continues to Rise
– Growing Populations/Growing Markets
– Nearness to Markets
– Milk Deficit Region
– Economic Development of Rural Areas
New Dairy Development in the
South East?
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The Challenges
– Climate
– Topography
– Permitting
– Source Sufficient Feed
– Project Financing
New Dairy Development in the
South East?
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Dairy Development Requirements
– Minimum 60-80 acres or real estate
– Flat topography
– Isolation
– Good Water/Sufficient capacity
– Utilities
– Access to Road Infrastructure
– Partnership with local farmers
Dairy Development Opportunity
in the South East?
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Attracting Dairy Development
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Availability of Project Financing
Open Dialogue with Farm Permitting Agencies
Ag Friendly State Government
Financial Incentives
Strong Local and Regional Dairy Associations or
Extension Outreach
– Designated Support Representative that speaks
language of client
Dairy Development Opportunity
in the South East?
If One farm is developed, more will follow.
Thank you
for the opportunity
to speak with you.
Questions?