WAUSAU, Wis. (AP) — Pair a cash-poor young farmer with a successful landowner ready to retire from dairying and you could have the formula for revitalizing the nation’s milk industry. It’s called sharemilking.
The idea is just beginning to catch on in the Dairy State.
“It really does work,” said Sue Shultz of Chilton, who with her husband, Dick, got into dairy farming in 1990 by sharemilking. They now own an 80-acre farm and milk 100 cows. “We didn’t have a lot of cash. This is an excellent tool.”
Sharemilking is a partnership between an older, financially secure land-owning farmer looking to retire and a younger, skilled farm manager with few assets. The partners basically share a milk check — and a chance for one to phase out of business while the other phases in.
Unlike a long tradition in rural America, the new partners aren’t family.
“The replacements have always been home-grown, and that is not happening anymore,” said Gwen Garvey, coordinator of Farm Link Services, a year-old state Agriculture Department program designed to pair aspiring farmers with those retiring.
Sharemilking permits young partners to earn a paycheck and to slowly build their own herds by getting heifer calves from the established herd in return for labor. The secure farmers have less work, phase out of the business, cash in on the equity they’ve earned and cut their capital-gains taxes.
“This is a powerful system socially and economically,” said Steve Stevenson, a researcher at the University of Wisconsin’s Center for Integrated Agricultural Systems in Madison.
Stevenson sought ways to get more young farmers into the industry due to an expected trend in the next 12 to 15 years — a higher rate of older farmers leaving the business.
A number of large and profitable farms — enough to split incomes –are needed for sharemilking to work, he said.
As of Oct. 31, Wisconsin had 25,127 dairy farms, compared with 33,070 in 1990 and 51,179 in 1975, said Laura Mason, a dairy statistician with the U.S. Agriculture Department. The state has about 1.49 million milk cows, down from 1.81 million in 1975.
Farmer Sue Shultz also operates a farm management consulting business that has helped 18 other young farmers get into business through milk-share contract agreements since 1990. Two have failed, she said.
With $15,000 cash and a loan, Shultz and her husband bought out a farmer’s herd of 43 dairy cows and worked out an arrangement to split the milk check 50-50 with him, Shultz said. He provided everything the couple needed to farm — the barn, silos, home-grown feed, straw and a home.
Within four years, the couple’s equity in the herd grew enough to make a down payment on a different farm they now own.