University of Illinois Extension

Illini PastureNet Papers

Why Go To A Grass-Based Dairy?
David A. Surprenant, Law-Rae Manor Dairy Farm
05/07/2004

As a frustrated small dairyman of a conventional Holstein herd, I knew the day of reckoning was soon at hand. I looked around and observed by equipment getting older, myself more tired, and my savings account not growing. The year was 1991. I consulted with a good friend of mine at the University of Illinois which direction to go. I had to get larger was the final verdict - we had good production and herd health, but not enough animals. We were milking about 50-55 head at the time. We had to double the herd.

We embarked on the growth roller coaster ride. More debt, more cows, more work, more money going to everyone else, but my bank account. We ended up with a free stall barn to hold 115 cows, 2000 gal milk cooler, a stanchion barn converted to a flat barn that would milk eight animals with automatic take-offs, and , of course, we bought more animals. We hired help. We worked harder. But, we were still getting no place financially.

I ran across an article during the spring of 1993 of these two brothers in Virginia doing some intensive grazing. I had never heard of Management Intensive Grazing (MIG) before that time. The less work load and more profit caught my eye, but I thought these guys were nuts. It couldn't be done. I remember the pastures my dad used to have when I was small, they were nothing more than a dry lot after the first month, and a place for the cows to make a mud hole on hot days. On the other hand, grass is what cows were designed to eat.

I started researching this MIG. My conventional diary friends warned me against any such move away from total confinement. This grazing is just a fad I was told. Herd health and production would suffer. I called in a grazing consultant for more information.

In the summer of 1993 while putting manure on an alfalfa field, I threw grass seed on the top of each load. I had no idea what to plant or at what rate. We threw up some cheap wire for some paddocks and ran a water line to these. I was a grazer! Not! What we really were in the middle of was the worst of both worlds: part conventional - part grazer. We still had all the expensive equipment with its high maintenance and operating costs, debt load due to expansion, and declining herd production because of poor pastures due to lack of dry matter caused by thin stands.

I didn't give up. I continued to improve my pastures with better grasses and clovers. We converted more good Illinois ground to grass. The neighbors shook their heads; for this black, level soil is for corn and beans, not grass for cows to eat. Or at best - not the cows out in the field! I've since put in permanent roads, permanent fences, and improved the water lines. Starting with 40 acres in 1993, we now have 120 acres of permanent pastures, and ready to convert our last 40 acres when we need extra forage. Each year our dry matter improves as the soil converts back to its native grass base. Last year we milked 150 cows and followed up with 45-bred heifers after the cows were removed from each paddock. If the moisture had been favorable for the entire grazing season, we would have only needed 80-90 acres of pasture. Going to a grass-based dairy was the best thing we did, but the first three years were extremely trying.

Our goal is to maximize this farms profit potential. Which includes milking as many animals as what it takes to eat the grass off of this 160 acres. If that means milking 200-250 animals, then we'll do it. All the corn and bean equipment has been sold off. We hope to be able to sell the hay equipment as the cow numbers increase and then to purchase most of our winter feed needs. All extra spring flush forage would be made into wilted silage, dry hay, or baleage. At the current time we are attempting to go primarily seasonal. With Holsteins this is not an easy task, but one that must be tackled to maximize profitability. Our goal is to freshen 70% in March and April, and 30% in September and October. We feel that this ratio is the most profitable. We have made great progress over the last several years. Looking back, here are a few thoughts and/or changes that we would have considered:

  1. It takes years to develop a sod base, don't expect to plant a grass and have an instant pasture.
  2. Ryegrass is king, but you must be a good manager to have a persistent crop year after year. If you can raise excellent alfalfa, you can raise Rygrass. Have a back up in case of winter kill or dry, hot summers which Ryegrass hates.
  3. Alfalfa cannot take the stress of repeated grazing. Try a grass/clover combination.
  4. Keep cow numbers in check until you have quality established pastures. On some soils this may take six years or until organic matter dramatically increases.
  5. Look to the future. If you want to increase herd size, plan today to get your pastures planted in the forage that suits your ground and management style.
  6. Equipment kills your pocketbook - cows expand it!
  7. Holsteins are wimps and poor grazers - think of crossbreeding. But whatever you breed to, make sure it is superior genetics. Have a plan before you start willy-nilly crossbreeding.
  8. Some of the most profitable farmers (usually truck farmers) take nothing for chance.; Think of irrigating.
  9. Fertilizer and lime pays. 35 units of "N" once a month goes a long way.
  10. Continually think of ways to limit laborious activities.
  11. Keep it simple. We have a natural tendency to revert back to old habits and ways.
  12. Enjoy life. You only live once. Go on vacation.

We went to grazing to improve our lifestyle and financial gain. We have accomplished these objectives. Our average net income per year from 1986 through 1990 was $3958.75, while dairying conventionally. From 1997 through 2001 our net averaged $50,307.66. Yes, we milked more animals, but we did not buy them, the increase is from internal growth. Our debt load has decreased dramatically. Our animals are much healthier now, which leads to longevity. We have time to go on vacations and enjoy our kids as they grow. They can help us do the simpler tasks that grazing entails; this makes them a vital part of our operation and instills a sense of pride and accomplishment. We can encourage them to remain in agriculture and eventually take over our operation. The growth and financial potential on these 160 acres has not yet been reached. We will grow, as the pastures improve - for this is the backbone of our operation. Take care of the pastures and everything else will fall into place.

DAIRYING FOR PROFIT

200 Acres

INCOME - Milk Sales @ $13.30 cwt.
  150 cows 215 cows
15,000 RHA 299250.00 428925.00
Calves, cow sold 17532.00 24592.00
Total Income 316782.00 453517.00
 
EXPENSES
Feed, Mineral, Silage 49234.64 70569.65
Hay 0 41925.00
Fertilizer, Chemicals 12968.08 14000.00
Fuel 6642.79 5314.00
General Supplies 11313.90 16216.59
Insurance 3320.30 4759.00
Pasture Supplies 411.25 589.45
Irrigation Exp 2101.09 3011.56
Labor 25007.50 *50015.00
Rent, land 17000.00 17000.00
Repairs, buildings 3974.32 5696.52
Repairs, equipment 15326.59 21968.11
Veterinary 5566.99 7979.35
Utilities 5888.46 8440.12
Misc. Exp 46557.81 66732.86
Total Expenses 205,313.69 334,217.21
 
Net Income 111,468.31 119,299.79
Net/Acre 557.34 596.49
* 1.75 full time employees

Farm Income and Expenses
Schedule F, Form 1040
Law-Rae Manor Dairy Farm
Confinement Dairying

  1986 1987 1988 1989 1990
INCOME
Milk Sales 66848.00 75931.34 84474.98 94652.97 121544.00
Other Inc. 960.40 1112.29 2160.33 5380.12 562.00
Total 67,808.40 77,043.63 86,635.01 100,033.01 122,106.52
EXPENSES
Feed 10514.29 10184.00 24207.39 15452.85 28761.34
Labor 8771.87 9972.60 1124.42 1409.00 553.15
Vet 1870.39 1980.80 2218.65 3844.58 4301.46
Other 56872.05 54906.23 58951.90 68593.41 69342.42
Total 78,028.60 77,043.63 86,502.36 89,299.84 102,958.37
 
Net Profit/Loss -10220.20 0 132.65 10,733.17 19,148.15
Average Profit per year - $3958.75

Farm Income and Expenses
Schedule F, Form 1040
Law-Rae Manor Dairy Farm
Management Intensive Grazing

  1997 1998 1999 2000 2001
INCOME
Milk Sales 201,149.73 275,722.96 267,273.72 241,771.29 302,325.40
Other Inc. 9,764.33 8,059.70 21,876.67 16,349.81 26,264.02
Total 210,914.06 283,782.66 289,150.39 258,121.10 328,589.42
EXPENSES
Feed 55,375.30 70,963.61 68,437.24 54,861.04 71,717.48
Labor 10,118.96 13,938.25 16,817.95 19,685.75 25,007.50
Vet 3,641.19 7,816.64 7,107.17 8,108.41 8,659.99
Other 130,069.08 144,064.66 150,457.19 128,475.53 137,910.72
Total 199,204.53 236,783.16 228,605.21 211,130.73 243,295.69
 
Net Profit/Loss 11,709.53 46,999.50 60,545.18 46,990.37 85,293.73
Avg Profit p/yr - $50,307.66
* includes $37,982.39 pre-paid expenses for 2002
** add $7,596.47 when prepaid expense are removed.