From mega dairy to mega auction
"They are too big and they’ll never make it." I suspect that phrase has been uttered and repeated endlessly ever since the farm dairy herd went from one to two cows, then from two to twenty and for sure when the first mega dairy (over 1,000 cows) was established.
Over all those years, thousands of dairy herds came and went. Most quit dairying for family reasons – tired of the long hours and hard work, no successor to take over the farm, a change in interest and wanting a career change and hundreds of other reasons. And yes, instances of financial challenges, even bankruptcy. The biggest years for farm bankruptcies probably came during the Great Depression of the 1930s when farm income was almost nothing. (My father often mentioned those days of $3.00 a hundredweight for market hogs, but the farm survived.)
Doom and gloom forecasted
The forecasts of doom and gloom facing expanded dairies began anew when the first large dairy operations were created by dairy families in Wisconsin 30 years or so ago. This movement was a copy of California’s "big dairy" system that I had first seen in the mid-70’s. "You just can’t milk that many cows," many of Wisconsin’s small dairy farmers said. They were seconded by a host of environmentally-oriented groups and surely by city folks who were farm-raised, and would-be farmers who weren’t.
It didn’t happen like that
The movement to bigger herds continued, but the failures didn’t happen as predicted. Family farmers had learned that you didn’t have to milk the cows yourself – that employees could do the job just as well with the proper training and supervision.
Another factor was that the herds didn’t grow from 50 cows to a thousand in one movement; they grew over a period of years in increments from a hundred to four hundred to six hundred and up. As a dairy farmer friend once told me, "We learned as we grew, each jump helped us improve our management and people skills."
Predictions do come true
The years have gone by and there are now nearly 300 CAFO dairies (housing at least 700 cows), most still under family ownership, in Wisconsin. To my knowledge, the "they will never make it" predictions have not come true. Until now.
A week or two ago, I received this email from John C., who is the CEO of True North Equipment, a John Deere dealership in Grand Forks, N.D. "Saw this on Steffes Auctions newsletter," he writes:
"Dairy Cattle – Court Ordered Auction
LOCATION: Lakeview Dairy, 8998 Laurel Hill Road Fox Lake, WI 53933
OPENS: MONDAY, NOVEMBER 9
CLOSES: THURSDAY, NOVEMBER 19 BEGINNING AT 1:00PM
PREVIEW: By Appointment
LOADOUT: By Appointment
AUCTIONEER'S NOTE: Selling approx. 1,800 mature milking dairy cattle. Primarily Holsteins with some Jerseys and cross breeds as well. Herd averaging over 80 lbs. milk per day, 4.36% fat, and 3.1% protein. Approx. 400 head fresh or due within 60 days or the auction. Cattle to be sold in pot load lots. Pictures, videos and stats coming soon."
No, I had not seen a notice or any information in the media, but I’m not surprised because Lakeview Dairy at Fox Lake has been a subject of discussion among dairy folks for some time, and I’d heard several times that the dairy was "done." And it was.
Three in one
The "Court Ordered Auction" is actually three auctions. One: the real estate, including the 40-acre Fox Lake dairy, a 200-acre and 800-cow dairy in Racine County and some other land on Nov. 17. Two: the dairy herd on Nov. 19. And three: the dairy-related equipment on Nov. 30.
It’s entirely an online auction and all the details are available at steffesgroup.com, which is based in West Fargo, N.D. I was vaguely aware of Steffes from my visits to North Dakota and my son has dealt with them in farm equipment areas. Here’s part of what their home page says:
"Our company was founded in 1960 by Robert (Bob) Steffes who primarily performed farm and livestock auctions. In 1984 the business incorporated and moved Fargo, North Dakota. ... The company has experienced a continued growth pattern and an expansion of its service offerings. We now have locations in North Dakota, Minnesota, and Iowa. Steffes Group, Inc. and its contributing divisions are primarily engaged in the liquidation and management of Ag related assets."
How did a Fargo company become the firm selling a southern Wisconsin dairy? I don’t know, but my logical guess would be on the lender involved, BMO Harris.
What happened at Lakeview Dairy to cause their financial downfall? Probably many things. Financial difficulties are seldom the result of one instance and usually take a long time to develop, as did this one.
For sure, the downfall of one mega dairy is not indicative of others following, so the old comments of "those big farms will not make it" still has no real standing. Each operating dairy in Wisconsin – big or small – is built differently, financed differently and managed differently. The only reason I write this story is because this is the first Wisconsin mega dairy that I know of to fail. Time will tell about the future.
John F. Oncken is owner of Oncken Communications. He can be reached at 608-837-7406 or email him at firstname.lastname@example.org.