Business Spotlight: Till the Cows Come Home

Dairy farmer Randy Mooney has learned to adapt to his environment and contain costs – two factors that go hand-in-hand in keeping his M&M Dairy LLC afloat in Rogersville.

The commercial dairy farm produces 4 million pounds of milk annually – a number that cannot be taken for granted these days. With equipment, feed and fuel costs increasing, the number of dairy farms in Missouri has decreased steadily. In 1975, there were 21,000 Missouri dairy farms registered with the U.S. Department of Agriculture, and by the 2007 Census of Agriculture, just 2,600 dairy farms operated in the Show-Me State.

Two decades ago, Mooney introduced rotational grazing on his family’s century farm, a decision that Missouri Gov. Jay Nixon recognized as an important innovation when he visited M&M Dairy on Oct. 12 to honor the dairy farm with the Governor’s Award for Agricultural Achievement.

In rotational grazing, cows regularly move to different fields that are closely managed for plant growth and grazing time.

“The cows basically harvest the forage themselves instead of us hauling the feed to them,” says Mooney, a partner in M&M Dairy with lifelong neighbor Kent Miller. “It’s more about managing the grass than managing the cows. If you manage the grass right, the cows are going to be fine.”

Rotational grazing is an alternative to the confinement model of dairy farming, which requires farmers to bring food to the cows and haul away manure. The grazing model lets cows distribute most of their manure.

The model may not work everywhere, but it’s well suited for the Ozarks, where grass grows readily, Mooney says.

Controlling costs has become more crucial in recent years as corn has been used to make ethanol.

“We had an ethanol policy in the United States to keep us from being as dependent on foreign oil, which drove up corn prices and doubled our feed costs for dairy cows. It really got dairy farmers interested in lowering the costs of producing milk,” Mooney says, noting rotational grazing reduces labor, equipment and feed costs and enhances herd health.

He estimates M&M Dairy’s operating costs would rise 25 percent under the confinement model.

Mooney and Miller formed M&M Dairy in 2001, combining their family’s adjacent century-old farms – Mooney’s 160 acres and Miller’s 140 acres. They rent an additional 200 to 300 acres to graze livestock not involved in the milking operation.

As equal partners, the men work the farm with two full-time employees, and Mooney’s wife, Jan, keeps the books.

With 250 head of cattle, M&M produces raw milk and markets it through the Dairy Farmers of America cooperative. Milk is delivered daily to Hiland Dairy in Springfield for processing.

Roughly 90 percent of M&M’s revenue comes from milk, which the farm sells for about $20 per 100 pounds. Mooney is budgeting for a decrease next year to $18.50 per 100 pounds, which is on par with 2010 levels.

Additional revenue comes from the sale of livestock, including calves and cull cows, Mooney says, declining to disclose revenues.

Milk price fluctuations illustrate a problem for dairy farmers nationwide, and Mooney says he’s been working for two years on a plan to reform dairy policies. That proposal was introduced in the U.S. House last month as the Dairy Security Act, and it includes the opportunity to protect milk production against wide swings in prices and feed costs, which can leave dairy farmers in the lurch – as they did in 2009, Mooney says.

“Dairy farmers are dealing now with policies that were put in place in the 1930s, 40s and 50s,” he says. “Let’s update the system and let’s try to give farmers tools to help control volatility on their farms and help them maintain a good margin.”

Mooney is chairman of the board of DFA, the largest milk cooperative in the nation, for which he also serves as leader of his local district. He also serves as board chairman of the National Milk Producers Federation, a trade organization that Mooney says represents 70 percent of U.S. milk producers.

Gary Aggus, president and general manager of Hiland Dairy, says he knows Mooney as a milk producer and has worked with him on Hiland’s operating committee and on other boards.

“Randy does a great job for us, and he’s a great leader in the industry,” Aggus says.

Steve Davis, a manager of the Southeast Area of DFA, says he confers with Mooney on local issues from regulatory and legislative matters to helping families in emergencies.

“Randy is passionate about the dairy industry and dairy farm families,” Davis says.

Mooney says his goal is simple: “To make the future better for dairy farmers than it has been in the past. The past, to a certain degree, has been pretty good, but you can always improve upon it.”[[In-content Ad]]