South Dakota Woos Out-of-State Dairy Farmers
John Koepke checks in on his pregnant cows on rounds at he and his wife Kim's dairy farm north of Oconomowoc, Wisconsin, near Lac LaBelle, November 15, 2012. They checked out the possibility of moving to South Dakota where officials there and in some other states are recruiting dairy farmers. (Rick Wood/Milwaukee Journal Sentinel/MCT)
John and Kim Koepke, right, operate a dairy farm north of Oconomowoc, Wisconsin, near Lac LaBelle, November 15, 2012. They checked out the possibility of moving to South Dakota where officials there and in some other states are recruiting dairy farmers. (Rick Wood/Milwaukee Journal Sentinel/MCT)
Thirsty for milk, and the money that comes with it, South Dakota has ramped up efforts to recruit dairy farmers from other states and countries, including England, Ireland and The Netherlands.
South Dakota isn’t alone in the recruitment game, as North Dakota, Kansas, Iowa, Texas and other states attempt to prove they are the dairy industry’s next frontier.
Simply put, “they want what we have,” said Shelly Mayer, a dairy farmer near Slinger, Wis., and executive director of the Professional Dairy Producers of Wisconsin.
Mayer said she and her husband, Dwight, were recruited by Kansas with the offer of wide-open spaces, attractive to farmers who felt crowded by urban sprawl.
“As a farm kid who grew up in southwestern Wisconsin, I miss some of that,” Mayer said. “You could say they have the open spaces and great big places, which is wonderful.”
Some states have been recruiting dairy farmers for years.
“I think the Dakotas are just getting more aggressive about it,” Mayer said.
It was noticeable this fall at the World Dairy Expo in Madison, Wis., where representatives from the Mount Rushmore state made pitches to dairy farmers about why they should relocate.
Two South Dakota dairy processors put up billboards in Tulare County, Calif., which has about 340,000 dairy cows, saying “All our cows in South Dakota are happy.”
The billboards followed an earlier ad campaign that touted South Dakota as a better place for dairy business because, unlike California, it doesn’t have quotas that limit milk production.
“We think South Dakota is a good place to milk cows,” said state Agriculture Secretary Walter Bones. “Our state is one of those areas with tremendous untapped potential.”
Earlier this year, South Dakota Gov. Dennis Daugaard went to California on a recruiting mission, telling reporters “we’re on a cattle roundup. So if you’re out there in the world of dairying and you’re looking for a place to plant your dairy, South Dakota is open for business.”
Some California farmers have shown interest in relocating to South Dakota and elsewhere in the Upper Midwest as the cost of cattle feed has soared in Western states and it has become more expensive to do business because of taxes, regulations and rising land prices.
“We think once they start coming, more will follow,” said Jon Davis, CEO of Davisco Food International, which has a cheese factory in South Dakota and backs the billboard campaign.
South Dakota sells dairy products worldwide. Earlier this year, Bel Brands USA said it was building a $100 million cheese plant near Brookings, in the eastern part of the state, that will employ 400 people.
“People have invested a lot of money in the processing industry here. The only piece of the puzzle that’s missing is the farms,” Davis said.
The state’s industry has persuaded European dairy farmers to move here, and it helped a Costa Rican dairy operation relocate to the prairie, although that farm folded after a short time.
Altogether, South Dakota has successfully recruited about 23 dairy farms in the last couple of years, most of them capable of handling 1,000 cows or more.
The state doesn’t have a personal income tax, corporate tax, inventory tax or business tax. And, more than anything else, it has millions of acres of farmland suited for growing livestock feed.
The rural landscape is one of the state’s strongest selling points.
“If you are in an area where urban sprawl is infringing on your ability to farm, South Dakota would be a good place to consider,” said David Skaggs, a dairy development specialist with that state’s agriculture department.
The Wisconsin Department of Agriculture, Trade and Consumer Protection has helped farmers move here, although state officials say it hasn’t been an aggressive campaign because Wisconsin already has a well-established dairy industry that includes young farmers stepping up to take over farms that have been in their families for generations.
It’s also not easy to relocate a dairy farm, since it often involves selling the old operation and going through a lengthy permit process to start a new one.
Many farmers have deep roots in Wisconsin, too, including Waukesha County dairy farmer John Koepke, whose family has been here for 137 years and has been a farm employer for decades.
“We have employed three generations of four different families. This is where the dairy industry needs to be,” Koepke said.
Wisconsin has 12,100 licensed dairy farms, compared with fewer than 400 in South Dakota. Not intimidated, though, South Dakota officials have touted the opening of new cheese plants and dairy processing facilities as reasons why the state expects to double the size of its 90,000-cow dairy herd in the next five years.
“If someone from Wisconsin wants to come here, we would be all for it,” Skaggs said. “It’s just a tougher sell than recruiting someone from California.”
In fiscal 2011, the Wisconsin Department of Agriculture provided assistance to farmers interested in relocating from California, Pennsylvania, Maryland and other states. Some of the help included farm visits and tours and “hand-holding through the buying process,” officials said.
The state also answered inquiries from farmers in Pakistan, Turkey, England, The Netherlands, Japan and Canada. When a milk quota system was scrapped in Europe, some farmers took government buyouts and immigrated to Wisconsin.
“Our reputation is already established. People want to know why they should consider South Dakota or Colorado as a place to relocate, but we don’t have to explain that for Wisconsin,” said Mike Powers, administrator of agricultural development in the state Agriculture Department.
South Dakota officials say the economic benefits of the dairy industry in their state are significant, even if they’re small by other states’ standards.
Every dairy cow in the state, they say, adds $13,453 dollars a year to the economy.
Davis, with Davisco International Foods, said his company would quit importing milk from Idaho if enough milk were available in South Dakota. The company says it’s one of the largest suppliers to Kraft Foods and that it exports products worldwide.
It’s a daunting task to double the number of milk cows in a state in five years, even with new processing plants that make it more attractive to increase herd sizes.
But, Davis said, “sometimes you got to shoot for the moon.”