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West Texas: Land of more milk and honey for some |
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By LORI COPE | East Texas Edition |
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September 25, 2003 -- In the agribusiness of milking cows, perspectives vary and goals differ among dairy farmers. For some farmers, milking a few hundred cows in humid, close-neighbored East Texas is their choice for a good quality of life. For others, milking thousands of cows in dry, remote West Texas is ideal. Some East Texas dairy farmers have decided West Texas is where they want to be. They cite the benefits of a drier climate as chief reason for the move; but they also stress it's an area where a dairy operation can easily consist of thousands of cows, plus there's good availability of forage/feed, and fewer neighbors moving into the area from the big cities. Leo Ruyne is one East Texas dairy farmer who feels the West Texas-South Plains region is ideal for his goals. Ruyne, who already milks 1,000 cows at his Hopkins County farm, will take his cows, plus some others he has at dairies in Hereford and Muleshoe, and open a 3,500-cow dairy operation in Hale County around Nov. 1. His new facility, a rotating 80, will be able to eventually milk around 500 cows per hour. Ruyne's plans are to milk the freshly-lactating cows four times a day, and the others three times a day. Hale County, where Ruyne's dairy is under construction on a section (640 acres) of land, is in the heart of an area that's steadily growing in milk production. This area includes counties, such as Hale, Bailey, and Lamb, that are west of a line between Lubbock and Amarillo, near the New Mexico border. Over the past several years, the number of dairy cows in the West-South Plains area of Texas has increased significantly. While the number of dairy producers remain few, the amount of milk flowing there is tremendous. "There's 50,000 dairy cows in a 50-mile radius of Muleshoe, which is about four to six counties and into New Mexico," said Bailey County Extension Agent Curtis Preston. Statistics from the Milk Market Administrator's Report shows some of the counties in the South Plains region producing lots of milk, with few producers. In Lamb County, seven producers generated 27,863,498 pounds of milk in July 2003. This amount represents a 43.42 percent increase in milk volume over the same month in 2002. A couple of producers in Lamb County are transplanted East Texans - Allen Caddell from Wood County and David Lawrence from Hopkins County. They moved their families out West, and now they are co-owners of Rio Blanca Dairy, located on Highway 70 in Earth, which is a few miles into Lamb County, just east of Bailey County's Muleshoe. Caddell and Lawrence, plus Lawrence's son Michael, brought their East Texas herds, plus other dairy cows they had going in leased barns in New Mexico, to start operation in August 2002. "You can't just start up a dairy here with a couple hundred cows; you've got to be building your numbers," Caddell said. At Rio Blanca Dairy, which sits on a half-section (320 acres) of land, Caddell said they now produce 215,000 pounds of milk a day, from 2,800 cows, in their double-40 barn. The cows are milked three times a day, and instead of the milking herd being housed on a concrete-floored freestall barn, the cows are kept in dry lots. The first day Caddell and Lawrence produced milk at their West Texas-South Plains dairy, Caddell remembered they asked where their milk would be going, and funny thing, the hauler said, "Tyler ... do you know where that is?" You can't be from East Texas and not know where Tyler is, was basically Caddell's reply. Milk travels Even though lots of milk is being produced in the West Texas-South Plains region, most of it travels back into the U.S. Southeast region, according to Jim Baird, manager and president of Lone Star Milk Producers. Lone Star is one of several cooperatives that form Southern Marketing Agency and the Texas-New Mexico Milk Marketing Agency - both designed to improve milk price levels. Caddell noted most of their milk goes to Tyler, Dallas, and Houston for processing. But New Mexico has a new cheese processing plant, "and that helps," added Extension Agent Preston. Baird pointed out that in West Texas, "there's more intermarket hauling," while in East Texas, the haul rate is cheaper, which means the "mail box price can be about $1 better" for East Texas producers. Milk makes money When comparing milk prices between the two regions, Ruyne said he feels producers cannot make as much profit, per cow, in East Texas. Caddell, echoing Ruyne's take on the situation, said when Rio Blanca Dairy started, in August 2002, milk prices were some of the worst prices since 1973. "But that just made us tougher, more efficient. We took a beating with the price, but we handled the low price better here than we would have in East Texas." The Rio Blanca Dairy co-owner added prices are better now. Last month they received $12.50 per hundredweight (cwt) for their milk. However, when asked about milk prices paid to dairy farmers, Baird said an "apples-to-apples" comparison is needed. He quoted August prices paid to the farmer, without the added premiums for quality, fat, etc., which sometimes can be as much as 40 cents/cwt. "A producer in Sulphur Springs (East Texas) received $12.33/cwt for their milk in August," according to Baird, and "in the West Texas region, the price received was $12.16/cwt. "In the future, and historically, there's a much wider difference (in the milk prices); sometimes as much as $1.50 difference (per cwt)" with East Texas producers being on the "better" end, Baird said. Baird explained the reason East Texas producers are prime to receive a better price for their milk is because their milk is priced in the Order 7 market, which is the U.S. Southeast region. Milk produced in the West Texas-South Plains region is paid in the New Mexico market. "East Texas has a bright future ... I think there will be a resurgence in dairies in East Texas," Baird continued. And although the number of dairy farms has steadily decreased in East Texas, those producers are generating more milk per cow, as are other dairy farmers in the nation. East versus West In an area where the average annual rainfall is 12 to 13 inches, drier climate is the chief reason some dairy producers like the West Texas-South Plains region. The climate makes it easier to keep dairy cows healthy, and environmental regulations are easier to deal with. "You cannot multiply (your dairy herd) to 3,500 in East Texas," said producer Ruyne. "In West Texas, the weather is so much drier; there's less rainfall. ... You don't have to have as big a lagoon" as you do in East Texas, where lagoons have to be able to hold the dairy's waste, plus all the rain that would come in a flood. Also, because the West Texas-South Plains region is remote, fewer neighbors are around to complain about a dairy's smell. Caddell noted while environmental regulations are very similar throughout the state, there are less problems with runoff from waste-holding areas due to the West Texas-South Plains' drier weather. "I think we just don't get looked at as much," he said. Caddell agrees "weather" is the number one benefit of having a dairy in West Texas-South Plains. Second on the list is the "ability to milk a lot of cows. ... You couldn't dairy like this in East Texas. You'd have to have them in a free-stall (barn)" which creates additional expenses. Economic boost In a region that is made up of few towns and lots of farm crops, industry-like dairies have created a boost to the West Texas-South Plains economy. Bailey County's Extension agent noted the region's farmland value has decreased in recent years - from the $800 to $1,000 per acre price to about $500 to $600 per acre - due to the poor farm economy. The development of the dairy farm industry has brought economic gain to the counties, which offer incentives to dairies that establish there. It may not always be in the form of cash, but incentives such as building roadways, as pointed out by Preston, which is reportedly one of the incentives received by a California investment group that is setting up a 5,000-cow dairy in Bailey County. Caddell said he and Lawrence did not receive any of the incentives to set up their dairy, but yes, some dairies did. Preston said some of the farmers in the region were upset about the counties giving so much to the incoming dairies, but educational meetings were held to explain how the dairies would bring economic gain for the whole region - and not just for the crop/feed growers. Feed crops are also readily available in large quantities. Most dairies grow their own corn and/or sorghum silage, with the help of irrigation; and all around the dairies, the farmland is bountiful in feedstuffs for the dairy cows. Preston noted many operations will plant and graze winter wheat, and in the summer, some grow sorghum, and even millet, to graze. All this means commerce between the farmers and those who supply the seed, fertilizer, equipment, fuel, etc. Preston also pointed out the number of jobs created on the dairies. "And over half of the employees, I'd say, are not minimum wage," he said. Caddell and Lawrence's dairy employs 32 people; and Ruyne said he will have 27 employees. The region supplies a "big labor force, mostly Spanish ... and they are ready when you need them," Caddell pointed out. "At home (East Texas), you might have to look around for a few days, but here you can get some labor the same day as they're needed." A great amount of dairy cattle in the region also creates the commerce of selling culls. Caddell said two or three times a week a hauler will come to Rio Blanca Dairy to pick up a load of cull cows. These cows are taken straight to slaughter plants, or some to livestock auction barns in Muleshoe or Clovis, N.M. Caddell said a man comes every day to pick up the dairy's bull calves and take them to sale. Other necessities for dairying - feed, supplies, medicine - are also plentiful even though the region is fairly remote. Extension Agent Preston noted much of the dairy supplies, such as teat dip, are warehoused by the veterinarians. Preston noted the agribusiness of veterinary services has "grown tremendously" in the past few years. He said in his county, Bailey, one vet clinic now has six practitioners. One East Texas veterinarian, Dr. Rick Willingham, has been doctoring cows at Caddell/Lawrence's Rio Blanca Dairy since they opened. Once Ruyne's dairy opens in November, Willingham will own a percentage of the dairy and work there full-time as herdsman, according to Ruyne. At present, Willingham travels to the West Texas-South Plains region a couple times a month to care for Rio Blanca Dairy's cattle. "He has been a big part of our success, if you can say success, and we owe him a lot," said Caddell. Perspectives of, and goals for, success More cows means more milk, and more milk means more money. That's the general idea in dairying, but dairy farmers also know more cows and more milk can mean more money spent, rather than earned. But in the West Texas-South Plains region, because of the drier climate, more cows mean more milk without some of the expense seen in East Texas. Land is cheaper which means there's room to grow crops, and the cows are housed in fenced lots instead of freestall barns. Both Ruyne and Caddell said the decision to move their dairying operations out West was good for them, but may not be for everyone. "Hopkins County has been good to us," Ruyne said. "I think in Hopkins County you can produce cheap milk, ... but I don't see 'big' dairies in East Texas. In West Texas, there's less population and less people coming in." "We wanted to stay in, so we moved West. ... It's exciting to be out here," Caddell said. In a perspective look at their decision to go West, Caddell said, "As little kids, David (Lawrence) and I would see dairy farmers set in their ways, and we'd see them go out. We learned the dairy business will run you over and leave you behind. You can't operate like you did 10 years ago." Being "progressive" is a common thought of the former East Texas dairymen. Caddell and Lawrence hedge (set a floor price for) their milk through the futures market; and they've locked in their feed prices through 2004. "It's important to take as much risk out of it (dairying) as possible," Caddell stressed. |
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