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Re-released: May 16, 2002 Sidebars with this story: Dairies Look to Kansas for Room to Grow REXFORD, Kan. – When Tom McCarty heads out for the morning’s work, the landscape looks a lot different than it used to. Precious few trees dot the land and the wind seems ever present. He can actually see the sun peek over the horizon.
McCarty and his wife Judy joined a growing number of dairy producers who are moving to the wide-open spaces of western Kansas from more-traditional dairy states. "I really think that long term in western Kansas, and maybe in Nebraska and the Dakotas, there’s growth potential [for dairy producers]," McCarty said. Closer proximity to feed sources and room to expand were key considerations in the move, he said. Although Kansas has just 1 percent of the nation’s dairy cows, and isn’t even in the top 10 in terms of milk production, things are changing, said Kansas State University agricultural economist Kevin Dhuyvetter. Since 1993, Kansas milk production has climbed at an increasing rate. Production has jumped 40 percent since 1993, and cow numbers are up 12.3 percent. "We didn’t leave because we didn’t like it," said McCarty of the Pennsylvania farm that has been in his family for generations. "Environmental issues weren’t pressing, but [more] people were moving into the area. Every time I’d have a piece of equipment out on the road, I’d have four or five cars backed up behind me." Tom and Judy brought no equipment or cattle when they moved. What they did bring was the family, their expertise, and a strong desire to make the change work. "You can’t be complacent. If you’re complacent, you die," Tom said of the decision. Steve Irsik agrees. Irsik, better known for his long-time involvement in beef cattle ranching and feeding and grain production and storage in Western Kansas, teamed with 11 other investors to form Royal Farms Dairy in southwest Kansas in 1999. Five of the investors are Irsik family members, but another five, including Royal Farms’ manager Peter DeVries, relocated from Washington state, where they had long been involved in the dairy business. "They needed to get out of Washington. They were looking at the lack of feed, heavy rainfall and water pollution issues, particularly given their proximity to salmon areas," Irsik said. Like the McCarty family, DeVries’s family also has been in the dairy business for generations, and the expertise and contacts he brought to the Royal Farms partnership were invaluable, Irsik said. In fact each of the12 Royal Farms investors brought capital, expertise and credibility from various corners of the agricultural production and business worlds. Royal Farms, located near Garden City, milks 5,500 head of cows twice a day, and ships milk to several states. It has a 6,000-head capacity. Irsik believes that through diversification and marketing agreements, there are opportunities for farmers, ranchers, food processors and retail stores to work together to enhance profits for producers and to address consumer concerns and wishes: "The food companies are wanting to know where their supply is coming from. They want to know more about it. Consumers want to know more about their food." And Irsik practices what he preaches. He’s on the board of directors for the 21st Century Grain Processing Cooperative – a group of wheat farmers who send their wheat to cooperative-owned flour mills in New Mexico and Texas. He’s also a stockholder in U.S. Premium Beef, a closed cooperative that purchased 30 percent of National Beef Packing Company. U.S. Premium Beef is comprised of beef producers who retain ownership of the beef they produce from the ranch to the retail level, with a strong focus on meeting consumer demands. From the start, expansion was on the McCartys’ minds when they moved to Kansas. Their sons plan to be in the business for the long haul. Clay and his wife Christy, and Mike and his wife Amy moved to Kansas so Clay and Mike could work in the business. Sons David and Ken are students at Kansas State University, and plan to join the operation after they graduate. The McCartys employ 11 or 12 workers in addition to the family members. "The western half of the state is the new dairy region," said Hikaru Peterson, assistant professor of agricultural economics at K-State. "Eighteen or so dairies have moved from places such as California and Pennsylvania during the last five years." McCarty believes that his circumstances are different than at some other relocated dairies: "We have no outside investors. We’re trying to do this thing, just our family." What they have, he said, is a banker, who lacked experience with dairy operations, but understood agriculture in general, and was willing to work with them on their plans. And plenty of planning went into the move. The McCartys bought an existing farm, but aside from the house and machine shed, started from scratch. They designed and built a free-stall barn, milking parlor and over-sized lagoon, all with an eye toward expansion. The milking parlor is a double 16 parallel parlor, which means they can milk 32 cows at a time – with room to put in several more. Another free-stall barn is being planned. Also by next summer, misters and shade will be installed in open lots built in the fall of 2001 to protect the cows from the Kansas heat. The McCartys plan to grow crops in the future. The herd numbers 1,550, mostly Holsteins. "Ideally, we’re aiming for 2,300," McCarty said. "By western Kansas standards we’re small, but by Pennsylvania standards, that’s big." It’s an around-the-clock operation, with 22 hours a day filled with cows being milked. That leaves two hours for cleaning and maintenance. The family worked closely with K-State agricultural engineers and animal scientists as they designed the buildings – right down to the pitch of the roof on the free-stall barn. When K-State dairy specialist John Smith and agricultural engineer Joe Harner suggested a steeper pitch to the roof than the original plans called for, McCarty weighed the pros and cons – a cooler barn in the summer versus the cost. The pros won out. "I’m guessing it was an extra $45,000 to go with a steeper pitch, but that’s insignificant" in the long run, he added. "Really, that whole team was very helpful to us," McCarty said of Smith, Harner and Mike Brouk, another dairy specialist with K-State Research and Extension. The motivating force behind the migration of dairies to Western Kansas has largely been county-level recruitment coordinated by the Western Kansas Rural Economic Development Alliance, K-State’s Peterson said. Local business representatives hold informational booths at dairy trade shows to promote the region as an attractive destination for large-scale dairies. The McCartys began looking at Kansas and other areas several years ago, and attended a dairy conference in Dodge City in 1996. Several Kansas communities were there, courting out-of-state dairies, Tom said. In addition to nearby feed supplies and room for expansion, the new dairy’s location on Kansas Highway 83 and near Interstate 70 was key to their decision to move to Rexford, in Thomas County. The farm is about 13 miles northwest of Colby. The McCartys and Royal Farm Dairy, like most dairy operations in Kansas, sell their milk to Dairy Farmers of America [DFA], a national milk processing cooperative based in Kansas City, Mo. ### Sidebar MANHATTAN, Kan. - Kansas State University agricultural economists Hikaru Peterson and Kevin Dhuyvetter said they believe the recent trend toward bigger dairies and greater milk production in Western Kansas will continue, but growth may be hampered by limited marketing opportunities. "Currently, the distance to market is a significant disadvantage for Kansas dairies," Dhuyvetter said. "In order for the state dairy industry to further expand and attract large dairies, milk processing facilities need to move into the state or nearby regions in other states, which will not occur until a critical level of production is attained." Most Kansas dairy producers [about 85 percent] sell their milk to Dairy Farmers of America [DFA], a national milk processing cooperative based in Kansas City, Mo. Most of the milk goes to DFA processing plants in other states. Lone Star Milk Producers of Texas buys most of the remaining Kansas milk supply, the economists said. However, when asked if the construction of a milk processing plant was a viable possibility in western Kansas in the future, Royal Farms Dairy partner Steve Irsik said, "Absolutely." Royal Farms Dairy is located near Garden City. # # # Sidebar MANHATTAN, Kan. - Kansas State University agricultural economists Hikaru Peterson and Kevin Dhuyvetter have studied trends in the U.S. and Kansas dairy industries. According to Peterson and Dhuyvetter: * California ranked No. 1 in milk production in the year 2000, at 32 billion pounds, or 19.2 percent of U.S. total production. Wisconsin ranked second at 23 billion pounds or 13.9 percent of production. Kansas ranked 25th at 1.5 billion pounds or 0.9 percent of U.S. production. * The number of Kansas dairy farms fell by 78 percent in the past 20 years, and stood at 1,300 in 2000. During the same period, the average herd size rose from 21 to 70 cows. Since 1993, however, Kansas milk production has turned upward at an increasing rate. Production has jumped 40 percent since 1993, and cow numbers are up 12.3 percent. * Although still small by some state’s standards, Kansas dairy production has increased 40 percent since 1993, while cow numbers have increased 12.3 percent. * Of the approximately 91,000 dairy cows in Kansas, 45,000 to 50,000 are estimated to belong to 18 of the largest dairies in the western part of the state. That puts the average size of those 18 dairies at 2,500 to 2,800 cows, leaving the remainder of Kansas dairies at an average of 32 to 35 cows. * In 2000, Southwest Kansas accounted for 43 percent of the state’s milk production - sharply up from 2 percent in 1980. At the same time, production in Northeast Kansas fell to 13 percent in 2000 from 23 percent in 1980. "The eastern half of the state has been the traditional dairy region," Peterson said. "Families have run small-scale operations for multiple generations. A few family operations have successfully expanded to 500 to 600 cows, but it is challenging for family farms to obtain access to sufficient capital to build, say, a 2,000-cow facility. Depending on their location, they may also face pressures against expansion from their neighboring communities." -30- K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan. Story by: Kevin Dhuyvetter is at 785-532-3527; Hikaru Peterson is at 785-532-1509 |
That’s because the McCarty Dairy, a fixture in northeast Pennsylvania for over a century, moved to the Kansas Plains two years ago.