Expand Without Access To More Land
When dairy producers seeking expansion are tight on land, water and other natural resources, they don’t give up—they innovate.
Chris Noble has embraced that spirit as a seventh-generation leader on his family’s 1,800-cow dairy in western New York. He manages a $3.5-million digester, oversees a food-scrap collection service to generate energy for the farm and serves as the liaison for the family’s creamery, which they operate in partnership with seven other farms and Dairy Farmers of America.
“Cows are our bread and butter,” says Noble, whose operation in Pavilion, N.Y., is surrounded by dairies with limited land for growth. “My focus has been on diversifying our revenue streams and taking advantage of market opportunities.”
The ability to innovate is crucial, not only for those short on additional land, but also for dairy operators who want to remain in their communities rather than relocate. Diversifying will be increasingly important as a means to stabilize revenues and build new consumer markets amid the lowest milk prices since 2009.
As the next generation returns to the farm, complementary businesses can also pave the way to supporting additional family members. That has been the case for Melissa Reed, who joined her family farm’s payroll soon after it opened a $1 million milk-bottling facility in 2008 alongside its 150-cow herd in Junction City, Kan.
“We could have probably added cows, grown our facilities and increased size, but we are on well water and there was concern that could pose an issue,” Reed explains. “We chose to explore a different avenue where we sell our product direct to consumers.”
Strength from Energy. Of the 660 farms operating within the Nobles’ home base of Livingston County, each averages just under 300 acres. The Nobles have 2,800 crop acres, but the high density of farms means there’s not much room for additional growth.
It’s one of the reasons Noble got to work developing new business models after he returned to the farm in 2009. He researched, planned and oversaw installation of a methane digester that produces roughly 10,000 kwh of power daily feeding into the dairy, creamery and surrounding homes.
In another spin on vertical expansion, Noblehurst Farms purchased a farm house and a 70-acre lake from which water is pumped downstream three miles to the dairy and crops.
Noble also collaborated with a business partner to launch Natural Upcycling, which collects food scraps from 33 locations for prominent East Coast grocer Wegmans and other businesses. Scraps are then fed to the digester, and businesses benefit by keeping food out of landfills—a hot-button issue for regulators in recent years in nearby states such as Vermont and Connecticut.
He admits it’s risky to be “a jack of all trades and master of none,” but Noblehurst Farms sees value in these businesses for the long term.
Find Your Market. For producers wanting to add a side business without investing in more land, Reed advises careful planning. Before entering the bottling business, her family retained an adviser to study whether consumers within 150 miles of their operation would be receptive to locally produced, high-quality dairy products. The study came back and suggested they could move a majority of their milk through the bottling plant.
“We spent a good year thinking about it and mulling it over because of the investments it would take,” Reed remembers. “At that point, I was in college at Kansas State University, my brother was in high school and my other brother was in middle school. Dad wanted to make the farm available if that was something we chose.”