Build or bust: Dairies, suppliers seeing strong growth

SALEM, Ohio — Freestall and feeding barns bigger than football fields. Brand new parlors, double-12s and larger. Bulk tanks to hold 6,500 gallons of milk.

Drive across the Ohio countryside and you’ll see these are no longer the stuff dreams are made of.

Despite sky-high feed and fuel costs, farmers across the region are pulling out the stops to upgrade facilities this year, allowing growth both on the farm and for the suppliers who are helping them.

Barns

Dan Miller, who owns K & M Builders at Kidron, said his company has been working day after day on “a lot of dairy barns” going up this year.

So many, in fact, he’s been hiring other building crews to help build the structures.

“We’ve never been booked out this far this time of year,” Miller noted, saying he’s had jobs scheduled since early spring that will keep his 34 employees building well into November.

What will high feed prices mean for dairies in the next year?

Miller cited recent and upcoming jobs, including a 64-by-300-foot freestall barn, a 115-by-352 barn, and two 240-foot freestall barns on the books.

Jobs are stretching K & M crews from the home base in Kidron toward Willard in Huron County and up into Ashtabula County in extreme northeast Ohio.

“We’ve got so much, we’re not sure we can get it all done. They keep calling, and we hate to turn them away, so we’re figuring a way to get help and get things accomplished.”

More and more

Hill’s Farm Supply, headquartered in Canal Fulton, Ohio, is seeing growth, too.

Dolores Hill, matriarch of the business, said she’s seeing dairies getting bigger and brand new dairies going in, both of which create demand for the business’ products.

“We’ve been very busy this year, including several big, new installations,” she said. And Hill estimates sales on bulk tanks, lines, and barn fans have been up at least 25 percent over last year.

“Farms in general are getting larger, adding more cows, switching to milking three times a day,” she said. One dairyman the firm deals with even milks four times a day, she said.

To service their products, the Hills have added seven service trucks to their fleet this year, she said, but they’re still challenged to get tanks and suppliers from the manufacturers quickly enough to keep up with the demand.

“Overall it’s been a very good year. Everybody’s busy all the time,” Hill said.

Behind the growth

Both companies attribute the demand to dairies getting bigger and upgrading their facilities in light of “good” milk prices.

“Last year was a very, very good year,” said Dianne Shoemaker, an OSU Extension dairy specialist.

“Prices are letting dairies that had gotten behind catch up on feed, spray and fertilizer bills they hadn’t been able to finish from 2006, and also have allowed farms to recapitalize” on machinery, equipment and buildings, she said.

The Class III statistical uniform price average in 2007 was $18.83 per hundredweight, the highest price ever paid to farmers, according to Shoemaker.

By contrast, the second-highest ever was $15.39 in 2004, and in 2006, dairymen averaged only $11.89 per hundredweight.

Current milk prices are $18.26 per hundredweight, but that price is tempered by extreme operational costs, according to Shoemaker.

“Feed prices are out of control, and the [milk] price has to stay higher to have a reasonably profitable dairy industry,” she said, noting producers are seeing feed costs up 25-35 percent over last year.

“We can resoundingly say last year was a good year, especially with feed locked in at those prices. Looking ahead, if corn is $7 at harvest, it could be pretty ugly next year.”