The end of farming for me, for now

A people-loving story teller in an area lacking basic farm-supports tells why his short, valiant effort to be an organic dairyman ended in a total auction to pay off his debts.

By Mark Lichtenstein

Leading the cattle to auction. Mark ran into a number of pitfalls as a beginning dairyman that he wishes someone had warned him about before it was too late.

August 9, 2007: For two years, I operated a year-round, outside-housed, grazing-based, bulk-shipped, organic cow dairy. Due to many avoidable mistakes on my part, I liquidated the farm business at significant monetary loss in June. If experience is the best teacher, this is especially true if it is the hard experience of someone else! I hope being honest about my story can help other beginning dairy producers make better choices.

When I opted to start dairying in 2005, I chose my farm location in northeastern Pennsylvania based on its proximity to a major Russian Orthodox religious institution (including a monastery, seminary, retreat center and cemetery). This choice of location to continue association with a spiritual community was the first of many things I did with noble intentions that undermined my dairy’s profitability.

I bought the farm thinking of a part-time business grazing steers and raising poultry to sell locally at retail. I only considered dairy out of desperation once I was laid off from my sales job in a merger. I figured it was the best way to optimize my effort: I could focus on production and let a milk company (Organic Valley in this case) handle the other three aspects of my farm business, those being processing, distribution and marketing/sales. I thought I could gradually take back those value- and profit-adding parts of the business as things progressed.

As it turned out, managing the production of 30 to 50 cows plus calves is more than a full-time business for one inexperienced person to handle—but I’m getting ahead of myself. To streamline this story, I’ll basically list the major issues that combined to doom my dairying endeavor.

Problem #1:
Lack of supportive local natural conditions and farming infrastructure, particularly organic farming support.

The climate, soils and topography of Wayne County, Pennsylvania, do not favor commodity agriculture of any kind. There are many opportunities for niche agriculture as more people build vacation and retirement homes, but full-bore commodity ag is not practical.

Your first goal in business had better be to make a profit and later work toward your idealistic goals, or you will soon be out of business and never get to the idealistic goals. I am an example of this.

This has a number of consequences for a start-up agricultural enterprise. There was little choice among veterinarians, none of whom had much knowledge of alternative cow-health therapies, and little choice in equipment dealers, none of whom think production ag is their future (rather, they think of lawn tractors and contractors’ tools). Bedding materials for the cows and custom harvesting are essentially unavailable.

I neglected to consider the cost of trucking in my initial business plan. All organic grain was trucked in at up to $100/ton from mills at least 150 miles away. Moral of the story: Match your location to your business model, or match your business model to where you are, or do something else.

Problem #2:
Mismatched personality and business type.

You probably ought to pick your business model to match your temperament, as well. I am a communicator and storyteller; a big-ideas person, not a details guy. I get a lot of energy out of stories, both mine and other people’s. I find it very easy to stay up half the night reading, writing and talking. Cows reward consistency in milking time, feeding time, and probably want to have everything the same every day. That didn’t come easily for me.

I need time to recharge the people part of my personality. You don’t get much of that from the cows, and not at all from driving tractors in circles.

I don’t miss all my cows, but some were hard to let go of.

Problem #3:
Overly optimistic plans for milk income and building progress.

If you are planning on new construction to get into business as I did with my milking parlor, beware of estimates for the time and money it will take to get the work done. I was counting on getting paid for some milk while there was grass to graze the first summer/fall we started. Reality was that we didn't start putting milk into the tank to sell until nearly the next spring. Those six-plus, income-free months of bank payments, feed bills, vet bills and utility bills—along with massive cost overruns due to a parlor pit that wanted to be a groundwater-filled swimming pool—were, in retrospect, the beginning of the end.

Problem #4:
Troubles with organic idealism.

Many people drawn to organic farming are idealists, and that can get you into a lot of trouble, or at least trouble your soul. First off, let’s dispense with the notion that the regulated organic dairy industry under the USDA National Organic Program (NOP) is about idealism. It is not. It is about protecting a marketing position for a narrowly prescribed way of farming. There are sections of the rules and their interpretations and (non)enforcement that make some idealists run away screaming. “'Nuff said.” I’m just warning you to go into organics with your eyes open.

Second, people will try to infect you with their particular idealism, which can severely impact your profitability. Your first goal in business has to be to make a profit so you can later work toward your idealistic goals, or you will soon be out of business—and never get to the idealistic goals. I am an example of this.

The idealisms thrust upon me included:

Breed of cattle: There’s a lot of man-years of experience that have served to make the major dairy breeds major (Holstein and Jersey and their first-generation crosses) as well as the minor breeds minor, and for good reasons. Have the humility to abide by that collective wisdom. Experiment with other breeds and complex crosses cautiously, but don’t make them 25 percent of your herd at the get-go. You can’t afford it.

Going seasonal. I tried to go spring seasonal. It was a major contributing factor in my going out of business. Open cows cost too much to feed to carry them until they are bred to fit your seasonal niche. If you must go seasonal, get that out-of-sync cow bred somehow, sell her, and buy a cow in your seasonal window. Master the basics first, then go seasonal if you still want it. A moderate position is spring and fall calving. This works well for herds kept outside

Artificial insemination (AI). Don’t let all the hype about the superior quality of artificial insemination genetics get in the way of just getting your cows bred. Some cows are hard to catch in heat, but you still have to get them bred. Bulls are very good at catching cows in heat—probably a million times better than you are—just be careful with them. It isn’t widely talked about but humans “in heat”—including girls you might think are too young—can cause aggressive behavior in bulls. I’ve seen this happen on my farm in this short period. If in doubt, plan the funeral for the bull, and not your wife, your children or yourself.

Silage. Some people are quite certain that silage is no good in any form, but these individuals don’t pay your feed bills—your cows do. In much of the Northeast, the only way you are going to harvest high-quality, high-energy, high-protein forages is to take the first cutting in the middle of May. In my area at that time, the ground is too wet and the weather too rainy to reliably put up dry hay of dairy quality.

By the time we get a reliable weather window—about July—the forage crops are too mature and not worth the fuel to harvest. Even harvesting two weeks late will drop the protein content from 18 percent (at the prime date) down to 9 percent. Making up that difference with imported feed is cost prohibitive whether it is roasted soy or fancy western alfalfa.

Soy. I believe the Weston A. Price Foundation, of which I’m a member, makes valid claims about the problems of soy in human nutrition. However, the cow’s digestive system is quite different from a human’s, and my cows did very well on roasted soy. When all factors, including trucking costs, are factored in, there is seldom a good substitute for roasted soy in the organic world.

Grain. Other people (see www.eatwild.com) are concerned about any grain feeding to cattle. I agree that it is relatively easy to make outstanding beef without grain, because I’ve done it. The nutritional needs of a modern lactating pregnant dairy cow at peak production, however, are extremely hard to meet without some concentrated, energy-dense feed such as corn and roasted soy. A no-grain dairy herd can work for experienced graziers with a set of well-honed conditions and situations, but it is not for beginners with a mortgage to pay.

Excellent feed, lots of it

Is any of this “natural” or the way it happens in the wild? No, but modern dairy cattle don’t exist in the wild. Cows can survive on very little, but they are only profitable on optimal feed and timely breeding, which go together. As one wise farmer told me, “The cow’s goal is to survive to tomorrow.” If this means turning off the milk to preserve reproduction, they will do it. If this means shutting down reproduction—including aborting calves—they will do it.

Output relies on input. Don't skimp on feeding your cows just to achieve grass-fed only when you're starting out. Your milk production depends on your cows being well-fed even if that means soy and grain.

Do not skimp in the area of feeding cows. Get a good nutritionist and do whatever it takes to feed the cows right—or quit. Get a good set of soil tests and fix what is wrong before you think you can afford it. Do whatever it takes to store up top-quality forages, including going without sleep, food, a new truck or whatever.

A start-up dairy won’t work unless you can feed the cowies ‘til they are well and truly stuffed full of good food. Don’t count on custom operators or interstate shipments. You must be able to bring in 80 to 100 percent of your cows’ intake of top-quality feed from very near your farm or organic dairying won’t work.

If you must be an idealist about all this, start with a family cow or two. Sell the milk at full retail or take some value-added steps. Allow your off-farm job—and/or your processing/retail profits—to cover the hard learnings from your incidents of misplaced idealism on the production side. We will probably meet at a “micro-dairy” conference some day, as I think that’s where I’m heading with my undiminished addiction to cows.

Doubts about debt

I doubt that modern economics, especially debt financing, is compatible with Christianity as I know it. Even mainstream economic advisors point out that debt is very dangerous unless you are the one collecting the interest. Banks have very little flexibility under the law to help you out if you have a bad year or a rough start-up. Borrowing more money after a rough start-up, as I did, usually compounds the problem. The payments start immediately but some mistakes, such as underfeeding cows, take years to correct, if you ever do.

My bankers were impressed with my initial business plan to enter the growing organic market with a stable pay price thanks to a milk contract. Even so, I had to put in all my life-insurance equity, all my home equity and all my retirement money. My parents kicked in a good chunk, too. In the end, however, the sale of my land and farm assets brought in just enough to cover the commercial debt. My parents and I lost all the money we invested, but I’ve not had to declare bankruptcy. And I’ve emerged with rich experiences

Cattle are a blessing

I want to end this on a positive note. I believe that cattle are a great blessing to man from God. They can take land we can’t use for row crops or garden crops and make highly nutritious food from it. Cattle can also provide companionship, motive power, clothing, tools and then more cattle to feed and clothe others.

There was debt and regret, sure, but there were rich moments, as well. It’s hard to explain the joy of watching cows graze on lush pasture…or the thrill of finding a healthy newborn calf up and nursing when you go to round up the cows…or the great taste of fresh milk.

I don’t miss all my cows, but some were hard to let go of. For now, I need to focus my life on people and the ministry, but I hope, somehow, someday, to have a few cows as pets and experimental animals. There are lots of ideas I want to try, such as grazing corn, or putting up an oats/peas/barley mix for silage.

Let’s see, I only need 5 to 12 brood cows to have statistically valid data…

Mark Lichtenstein is a former medicinal chemist and a recovering organic dairy farmer. Although he misses some of his cows, he is looking forward to attending St. Tikhon’s Orthodox (Christian) Theological Seminary of South Canaan, Pennsylvania, this fall.