South Dakota Farm Stories Of Resilience

By Alvaro Garcia

Expansion of livestock family farms has been happening for a while in the US. The reason is oftentimes attributed to the economies of scale which give farms greater leverage with suppliers and clients and helps them keep up with inflation. One other reason that compels farms to expand or relocate is the desire for a second family member to join the operation and eventually take over. There is oftentimes a transition period before the second family becomes the main owner/operator. In addition there’s frequently the need to generate enough net income to supplement the farm’s elders budget during retirement. According to the USDA’s definition, family farms are those where the majority of the business is owned by the operator and his or her relatives. In South Dakota, 98 percent of the livestock farms are family owned and managed.

Commercial small farms in the state are clearly not making it and are disappearing at a constant rate of 3.6% per year. Bear in mind that these figure constituted 24% of all 2012 farms (31,989) or a loss of 276 farms per year. According to the US census of agriculture between 2002 and 2012 Small South Dakota commercial farms with gross sales between $10,000 and $99,999 decreased at a constant rate of approximately 3.5% per year. On the other hand, those farms with a gross income between $100,000 and $499,999 have seen only a 0.35 yearly reduction in numbers suggesting this sales group is more likely to make ends meet (To read more on this, view Farm’s Tipping Point in South Dakota). This is not an artifact of the farms in the lower group increasing gross sales and thus being counted in the next sales’ category, since both groups decreased dramatically. The disappearance of the small farms in the state can only be attributed to one thing: reduced size does not allow these farms to capitalize on efficiencies of scale and thus their profitability suffers.

There are numerous stories that exemplify how farms have faced these challenges with success. One of them is a story of expansion with the purpose of bringing family into the operation in Clear Lake, South Dakota. While in high school, Laron Krause partnered with his father Edwin to raise feeder pigs. He has been involved in the business ever since. In 1997 Laron and four neighbors partnered to form “Supreme Pork”, a 1,650 sow farrow to finish operation, which has now 3,300 sows. As Supreme Pork partners the Krause’s have 4,800 finishing spaces plus another 2,400-head barn owned by one of the other partners. Manure from the finishing barns fertilizes the corn of their operation. The Krause’s also raise soybeans and wheat on their 3,300 acres. Laron and wife Jolene are very active in their community. They also give much credit to their success to their family and employees. Their two sons Adam and Brent attend SDSU and plan to return and join the family operation. They plan to build a 3,600-head contract nursery for Supreme Pork. Construction will start in the spring of 2016 as Adam graduates from SDSU. Brent will join one year later, ensuring the next generation will continue the family business.

The number of farms with beef cattle and calves dropped from 15,667 in 2007 to 15,582 in 2012, however the number of heads increased from 3.69 million to 3.89 million during the same time period. One other story of expansion is that of John Moes’ farm located in Florence, South Dakota. The farm started from scratch in 1987, when John purchased a quarter of land. During the next 28 years he went from 20 to 300 head total. The farm has improved consistency and quality of his cowherd with a combination of genetics and management. According to John working with South Dakota State University was the first step. This commercial herd along with the two college herds were used to test different protocols on how to synchronize cattle and get more of them bred at day one instead. Today the family has a 60 x 60 enclosure, complete with heated floors and a hydraulic chute. With an expansion in 2011 they are now permitted to feed 2,000 head, 1,300 of them in mono-slope barns. That space doubles as a calving area and a place to keep new mothers close during any bouts of cold winter weather. Fertility and conception rate improvements have come along with quality and performance. The first 2014 load of calves reached 64% Certified Angus Beef acceptance, compared to 27% two years earlier. Feedlot manure is managed in a holding pond and then spread on the pasture to improve production, and get the most out of each acre. Working with the South Dakota Game, Fish and Parks Department, Moes put an easement on 230 acres of his land, so that it will never be developed. For these efforts, Moes was one of four finalists for the 2014 Leopold Conservation Award.

The number of dairy farms and cows have followed similar trends. In 2000 there were 1095 farms and 102,000 cows or 93 cows per farm. During the first half of 2015 there were again close to 102,000 cows but now in 244 dairies or approximately 400 cows per farm. In the last 6 decades the state reduced dairy cow numbers by 400% and more than doubled total milk output.

South Dakota dairies have seen examples of expansions and relocations. In February 2006 Rodney and Dorothy Elliot and their three children moved from their home in Northern Ireland to Lake Norden, South Dakota. The reason was their 140-cow farm in Ireland was not showing enough profit to sustain the family and the quota system at the time didn’t allow them to expand. By the end of 2006 they were already milking 1,400 cows in their farm, “Drumgoon Dairy”. In 2013 they built a new milking parlor and half of a new cross-ventilated barn to the North of their facilities. The second half, named “Norden Dairy”, brought their total capacity to 4,500 cows. The farm currently has 45 full time employees which the family enjoys assisting to enhance their farming skills. The family also farms 1,000 acres of corn and alfalfa, and owns 200 acres of pasture. Their farmland and that of their neighbors is naturally fertilized with manure from the dairy. Drumgoon and neighbor crop farmers have prospered with this arrangement and at the same time they have reduced their carbon footprint. Their top priority is to buy local, purchasing 90 percent of their feeds from farms within their county. SDSU Extension helped this farm in their decision to relocate and training their employees on how to harvest top quality milk.