Business on local dairy farms looks a lot like business on main street. Successful managers balance production costs against the value received for goods and services to maximize return on investment. When traditional income streams become tenuous, niche markets become more attractive to fill in the financial gaps. Having experienced years of unpredictable and often depressed milk prices before the COVID-19 induced economic crisis, many of NY’s 4,000 family dairies have already put their ingenuity to work by diversifying their operations into parallel or complimentary enterprises.
Wearing Many Hats
The King family of Schuylerville, NY has a century-long dairy history in Eastern NY. Managing their 1,100-cow Dairy of Distinction farm is just the tip of the iceberg for brothers Jan and Jeff who represent the family’s fifth generation. They also process value-added dairy products for home delivery and retail customers, operate a farm store, and maintain a well-respected Holstein genomics enterprise.
Becoming a dairy processor and distributor is a return to the family’s roots. Jan and Jeff’s grandparents ran a creamery until the 1960s. Although processing only a small percentage of their total production under the King Brothers Dairy label, selling more of their own product gives the family better control over the value of their milk versus pooling their production with other farmers. The family has returned to the bottled milk home delivery business too. Customers can receive farm fresh milk, eggs, meat, and more delivered weekly to their front door. The Kings also produce 70 ice cream flavors that are available at their 3,000 square foot retail store constructed in 2019.
“We really consider ourselves a start-up in the processing business,” said Jan. “Volume sold is critical for retail clout. Part of the evolution of what we’re doing is finding products with more margin.” Building on their family farm history, complete control of the production process, and being NY Grown & Certified approved, the Kings have worked hard to build a brand that millennials will enjoy.
The Kings have been in the Holstein genetics arena since Jeff was in high school in the early 1990s. “It is not the tail that wags the dog,” said Jeff, “but this hobby has grown to be 15% of our overall business.” Holstein cows are known as the world's highest-producing dairy animals. While cow comfort and good nutrition influence milk production, the Kings are merchandising superior genetics to their peers to improve long-term herd performance. King’s-Ransom cattle, bull semen and embryos are marketed worldwide. “Our commercial dairy employees get an extra level of job satisfaction when one of our cows does well. These little victories – like King’s-Ransom offspring from a single animal living in seven different countries – means a lot to them personally.
“Before jumping into any new business, you need to do your homework first,” said Jeff. “Chart your course. Know where you’re headed, the investment needed, and realistic cash flow projections. Then stick to your plan. There are certainly things that would be fun or nice to do but won’t make you money. That also applies to letting existing businesses go that are under-performing. Don’t let emotion get in the way.”
75 Miles from Times Square
Together with his parents, Garratt Stap milks 120 cows in Pine Bush, NY, 75 miles north of Times Square. The farm’s future is not a given despite the 19 million consumers living in his backyard. “In 2016, we lost an important milk market when the Jamaica-Queens Elmhurst Milk Plant closed,” said Garrett, a fourth-generation owner/operator and 2018 SUNY Cobleskill graduate. “That really shook us up. We wanted to keep our hand in farming and needed an alternative revenue source. We couldn’t afford to dump milk down the drain that our cooperative couldn’t take. Sustainability was a real issue.”
After asking a lot of questions and soul-searching, the Stap family pivoted to on-farm processing. “It’s been like a chain-reaction,” said Garrett. “We built an addition to our milk house and installed a 100-gallon pasteurizer. Everything happens on the premises. From cow to cup, we can have milk to customers in as little as five hours. In 2017, we were the second farm to try this in Orange County.”
The Staps produce NYS Grown & Certified cream-line white and chocolate milks. “This product is unique to us and people know it,” said Garrett. “We don’t run a homogenizer or a cream separator. The rich cream of our milk floats to the top.” Alternatively, traditional bottled milk is processed to break down fat components, so cream disperses evenly in fluid. NYSGrown & Certified is a unique statewide program that informs consumers of local producers who adhere to the best practices in safe food handling and environmental stewardship.
“This new enterprise has given us an extra income source that we all can get involved in and set us on a clear path to keep farming in the future,” added Garrett. “The growth has been phenomenal. After selling milk for only one year from the farm, we set up a delivery route and established a second store front. Because of COVID, local demand has blown up. Together we’ll decide around the dinner table what to try next. But what I’ve learned is you must be adept at working with the public, especially when you invite them to see first-hand how their food is produced.”
Land of Milk and Maple
Lewis County is ranked number six in total milk production in NY. It is home to over 27,000 milking cows, nearly 190 dairy farms and a large Kraft plant that produces Philadelphia brand cream cheese from cow to package in six days or less. Yancey’s Sugarbush & Dairy Farm, a six-generation family farm with roots in Germany, is nestled in the foothills of the Adirondack Park in Croghan, NY.
Despite juggling three enterprises – dairy, maple, and logging - Tim Yancey does not consider his operation particularly cutting edge compared to his neighbors. The natural resources in this region are unique to the state and even the nation. “We farm like it used to be,” said Tim. He and his parents - Haskell and Jane - are the farm’s current owners. “Dairy farming has become much more sophisticated and specialized. Fewer operations have stuck to this very traditional model given price margins. We have 60 cows. The same could be said for our maple business. New technology has made output more efficient but at a steeper cost. Having all three enterprises working together has made our farm healthier. As a manager, you need to look at what you have and can easily access without sacrificing what you do well.
“My dad used to say that every season has its income opportunities and it’s still true to some degree,” continued Tim. “Spring is a time for increased milk production. Spring and summer planting leads to fall harvest. We can get into the woods in the wintertime. Come early spring the sap runs. We’re fortunate that maple and logging don’t’ follow the same marketing trends as dairy. In some years, dairy might have a better year than maple, and the trees might bring in more revenue than just spending money.”
Because consumers are more likely to purchase dairy products at the corner store versus fresh from the farm, most producers miss out on having substantive dialogue with shoppers. For Tim Yancy, he thinks his maple “people” experience has given him a public relations advantage. “One-third of our maple is sold at our rustic boiling shed or home. Once here, customers can see what’s going on and take in the process. We may not be the best salespeople, but the way we run our operation is a draw. That type of honesty spills over to our dairy and how we are perceived managing our day to day operation. The dairy industry would benefit from more consumer interaction like this to help people understand what we do and why from manure management to breeding cows.”
Transitioning from One Generation to the Next
Marshman Farms was established in Oxford, NY in 1856, and is owned and operated by John and David Marshman, the family’s sixth generation. They milk 400 cows, three times a day on 1,000 acres in Chenango County. Their primary customer is Chobani, which is the number one seller of Greek-style yogurt in the US.
In addition to milking cows, the farm supports a second enterprise: Tiger Lily Holsteins. “I don’t enjoy crops,” said John. His passion is cows. He was honored as the 2020 Master Breeder by the NY Holstein Association. “Side businesses definitely help with risk management for any operation. But they must mesh with your personality. Many businesses from one generation to the next have died a bad death because of lack of interest. Our farm is already shouldering the costs of animal feed and labor. This enterprise fits in well with my interests and what we’re already doing.”
The Marshmans are committed to breeding both red and white and black and white Holsteins. Holstein cows are known as the world's highest-producing dairy animals. While cow comfort and good nutrition influence milk production, the Marshmans are merchandising superior genetics to their peers in the industry to improve long term herd performance. We sell embryos and donor cows,” said John. “Basically, it’s the youngsters and hair follicles! By analyzing a small sample of hair, new technology can identify whether an animal has the necessary genetics to be a great producing cow. We also sell cattle to other farms including our red and white show animals.” The family, including John’s 13-year old daughter Lily, show locally and nationally, receiving Premier Breeder and Exhibitor banners regularly. Lily is a member of the Chenango County dairy court.
In addition to Holstein genetics, David Marshman and his family operate a farm stand. “It started out as just fresh vegetables and sweet corn when our kids were small, but now they sell manure compost by the truckload that is produced by the farm,” said John. “It all helps to support our families. It can’t feel like extra work to be successful.”
For John, the impact of the pandemic on business has been keenly felt. "It’s really beyond anyone's complete realization of the impact of COVID,” said John. “Trying to keep all the balls in the air in this environment is difficult to say the least. Some operations are doing better than others. It will be interesting to see what happens next."