STATE COLLEGE, Pa. – In a time of technological advances, aging farm ownership, generational change, and new frontiers in food production, some of the 28,000 licensed dairies in the U.S. are at a crossroads of sorts looking at the future.
But they don’t have to do it alone. There are opportunities for assistance — through state-funded programs, non-profits, the private sector, and in Pennsylvania the Center for Dairy Excellence — to hire consultants and form teams to help evaluate potential projects, set family business goals and steps to get there.
What is the hardest thing about making a decision on a project or change at the dairy farm? No matter the size of the business, change can be hard, especially taking that first step out of the box.
Three Pennsylvania dairy producers shared how they bring “outside eyes inside their dairies” during a breakout session at the 2023 Pennsylvania Dairy Summit. Moderator Caroline Novak of PDMP prompted a useful and engaging discussion.
One of the farms on the panel, with many family partners, has a contracted executive along with an advisory team. Another is the next generation eyeing a future transition, so they hired an operational consultant. The third uses a traditional profit team that they’ve moved forward with, since a major building project put them on track for generational expansion 20 years ago.
For Kate Kulp, third generation herd manager and partner at Kulp Family Dairy, milking 3000 cows in Blair County, the hardest thing about a change is getting everyone it affects on board and overcoming the challenge or fear of changing something that seems to be “working okay.”
Kate works with the cows, and her brother Kyle works with the crops. They both returned from college full-time at the farm for the past three years.
After spending time learning from the head herdsman, Kate explains they “decided it was a good time to bring someone in from outside with new ideas. We brought in (Next Level ROI) to look at our protocols, and we’ve made some changes we are very happy with.”
Outside eyes “see things we might not see, and spend time learning our business,” Kate points out, sharing examples from streamlining vaccinations and changing how cows go through the footbath to calf rearing, hoof trimming, and employee schedules.
“If I came up with an idea, it would be harder for our employees, who have been working here as long as I’ve been alive. They are happier to take suggestions from someone who has been out and around other farms, and they want to understand why.”
For Dale Brown, one of six Hess family partners at JoBo Holsteins, milking 1000 cows in Adams County, “we have the hardest time deciding whether to invest that middle amount of capital. Someone from the outside can see the forest through the trees. Our only experience is our farm, but they bring a different perspective. They are not invested in the operation but are helping us to look at investment decisions, asking questions, challenging us,” Dale explains, adding that the role of their contracted chief financial officer is to “help us look forward financially and to align our thinking around our decisions.”
One thing they’ve learned through an outside service on family-business relationships, is how their personalities become linked to their jobs. For the next generation to envision themselves in potential future roles, written job descriptions are a must.
The advisory team at JoBo has helped the Hess family business partners move forward through change and challenges with confidence.
Peer benchmarking is also quite transparent in sharing information. “It helps just knowing you’re in it together and sharing what works,” says Dale.
Mark Mosemann, the general farm manager in partnership with his father and brother at Misty Mountain Farms, milking 500 cows in Fulton County, notes the classic ‘fear of change’ barrier. “It’s the thinking about do we have time to implement something, or if it is something that is out there as a concept with no pathway to really measure it, or a metric for it… if I can’t get the numbers to make it easier to decide.”
The Mosemanns started their profit team 20 years ago when they hired 5G Consulting for their first expansion. That process brought in other agricultural and financial consultants to form a team. Mark recalls how hiring a consultant for that project saved them from making a big mistake in their building site plan.
“They took our blinders off on that project so we could see the big picture. Then it morphed into a profit team with biannual meetings to help us make other big decisions, to look at profitability, to do benchmarking and to touch on where to spend capital in the year to come,” Mark explains, crediting his father for initiating the culture of openness and bringing outside eyes into the dairy to help channel that.
“When I came back (after college), Dad made sure I had input, and later as the reins started coming over, and my brother Scott was coming back, (any family business) still has normal friction, but the culture was fostered to open that up and allow us to accept advice from others so we’re not just in our own little bucket trying to figure things out,” Mark explains.
Kate and Dale also touched on this ‘buffering’ effect in the work and family relationships of a farm business. Whether it’s an executive position, an outside consultant analyzing the business and looking at operations, or a team of advisors, the “outside eyes” help take the emotion out of decision-making and give family members more confidence to bring their ideas to the table.
Mark notes how good advisers laid the groundwork and gained perspectives from all members as their family partnership was formed.
Team members can also serve as ‘devil’s advocate,’ he says: “I want that pushback, someone to challenge me, to stop me and make me ask if I really believe in where I’m going.”
Is it worth the money to bring outside eyes into the business at the cow level or financial level?
Yes, was the short answer. Each panelist gave examples of short-term savings and the impact on the long-term, as well as the benefit of helping the farm family prioritize where their time is best spent.
The action lists from an advisory or profit team meeting can seem daunting, and that’s where Mark says it is critical to have help prioritizing and gaining some perspective.
“In profit meetings, we’re always looking to get better, and there’s always room for improvement. There was a time period when I would get stressed out after a meeting, with a to-do list, and not make enough traction to get there fast enough,” Mark explains.
He points out something an adviser said that stuck with him. “He told us: ‘You know we’ve made our recommendations, but you have to go home and live with it.’
“In other words,” Mark recalls, “We know what we have in front of us, but we can also look around at how far we’ve come, and if something is not happening as fast as we talked about, the challenge for me is to be content. I don’t mean content as in ‘resting on laurels,’ but to see where we are and to own that and live with that.”
There are also the employee responses to change that must be considered. Kate gave an example of changing teat-dip, and it disrupted how things had been done for years in the milking parlor.
The idea came from the “outside eyes,” but it’s the owner’s responsibility to see it through, says Kate. When employees balked that it would take too long, and the milking got delayed as employees may have wanted to ‘prove that point,’ she milked the next 12 hours straight with them.
“They saw value in that… that I would stand in and help them, and it ended up working okay,” Kate reflects.
Working with consultants, teams and peer groups is something Dale says gives partners the confidence to go ahead with a change in systems, operations, even core management principles. When times are tough and margins are tight, “it’s nice to have a team in place, to coach you along to have the confidence to see it through when something has to change on the dairy,” he says.
At the same time, the owners-partners-managers run the farm, and can’t do every suggestion or idea that drives down the lane. Having an advisory team, operations consultant or hired executive helps organize information and resources for family partners to work through.
In addition, peer groups and benchmarking offer opportunities to share what works, compare notes and bounce ideas around with other dairy producers.
Bringing “outside eyes inside the dairy” offers perspective, brings outside information and networks into the farm bucket where everyone is busy working every day, and buffers emotional elements to smooth family business relationships when having tough discussions, making important business decisions, setting end goals, and prioritizing steps to get there.
— By Sherry Bunting
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