If you want to sneak in cheaply, you might get by on (US)$200,000 in a 200 cow operation. But you really need (US)$750,000 or (US)$1 million. That will get you started in a 300-cow dairy — the term the Americans use for dairy farm.

In a presentation to a small group of farmers at Kemptville College last month, the South Dakota delegates examined a sample farm that sold three million pounds of milk to Land O’Lakes Cooperative. The sample was admittedly a best case scenario.

The farm had a net cheque of (US)$529,931 or about (US) $17,66 for 100 pounds of milk. Only minutes before, the audience at Kemptville College was told that the government set the price, usually between (US)$11 and $12. But the Cooperative has a blended price in which bonuses are paid for protein, fat, other solids and low somatic cell count. If you’re big enough, you can negotiate a higher price.

The 2002 Farm Bill pays a good bonus, too, capped at 120 cows. When milk falls below (US) $13.69 the government pays 45 per cent of the difference. Since the price of milk, except for the odd spike, doesn’t go above (US)$12 per cwt, the subsidy is simply aimed at raising returns. The subsidy is paid on 2.4 million pounds of milk per producer.

Orlin Pelton, west of Kemptville, who toured South Dakota has run a large dairy operation, by Canadian Standards, but sold his quota several years ago. A resourceful entrepreneur, he began processing Omega-3 milk but the market caved in about a year ago. He estimates a well managed 200-cow farm can average about (US) $14 with the subsidy. That works out in Canadian dollars to about (CAN) $52 dollars per hectolitre, about $4 behind an Ontario producer with quota.

The Dakota delegation comprised of government representatives, private enterprise and a large cooperative processor, Land O’Lakes, is recruiting in the Netherlands, Canada and the U.S. (mainly in California).

The state needs 65,000 cows for a plant expansion, the number required to supply three more million pounds of milk per day for processing. The plant is currently processing six million pounds of product per day.

Organizers were hard pressed to explain what happened to the State’s dairy industry. The tone suggested that the ones who dropped out were inefficient or had turned to crop production, where the work load was lower. Today Dakota rues the fact it has lost a generation of dairy farmers, say the recruiters.

One of the selling points of the move was the cost of feed, supposedly lower than anywhere in the U.S. But when we questioned them on price— (US) $30 to $50 for a ton of corn — organizers said the prices were out of date. (Please see front page story.) Unlike in Canada where farmers have hundreds of acres and are often self-sufficient in feed, South Dakota farmers specialize in milking cows and buy their feed. Three hundred-cow dairy herds are set up on 8 to 10 acres.

Organizers said that people from smaller farms should start small – under 500 milking cows. When a farmer gets to 1,000 cows he is no longer farming but managing people, the recruiters said.

Nutrient management will still be a problem. You need 1.5 acres for every cow, but the organizers say the state is farm friendly. Farmers are given a (US)$5,000 grant to develop an environmental plan; and the state will pay up to 75 per cent for a manure system that has a cap of (US) $450,000.