Central Wisconsin dairy farmer Patty Edelburg and her husband, Gary, knew they wanted to operate a dairy farm when they graduated from college, but to realize that dream they would have to start from scratch.
Patty, who is currently serving the National Farmers Union as vice president, shared their story as first-generation dairy farmers. She offered her lessons learned to aspiring farmers during her Dec. 5 presentation at the National Farmers Union Beginning Farmer and Rancher Virtual Conference.
“I am actually not a first-generation dairy farmer. I grew up on a dairy farm. My dad was a farmer and my grandpa farmed, but each generation started their own dairy farm,” Edelburg said. “My dad sold our farm when I was a sophomore in college. It was a huge decision for my dad to sell the farm. We knew it was something we wanted to do, but we had to start looking somewhere else.”
After college, Edelburg and her husband both took jobs off the farm while they worked to find a dairy of their own.
“We knew what we wanted. We wanted to milk about 100 cows, we wanted to have registered Holsteins and we wanted to be able to run the business as a business, but run it by ourselves. We wanted to be big enough that we could have employees, that we could get involved in the things our kids are involved in, but manage it without employees,” she said.
While working on an area farm, the couple began building up their own herd, making an agreement with the farmer that allowed them to keep the cows on his farm.
“We signed an agreement with the farmer we were working with where we paid for the cows, the semen and any embryo transfer work we were doing,” Edelburg said. “We were able to get the bull calves and the heifer calves, selling the bull calves as wet calves and raising the heifers. The farmer paid for the feed and got the milk. It was an excellent way for them to get extra cows and extra milk and we were able to start gaining equity and cows.
They bought their farm, Front Page Holsteins, in the spring of 2008, which included a 120-stall free-stall barn, 38 acres and a small parlor they are still using today. They also bought out the farm’s registered Holsteins and used a land contract to allow them to secure land for feed.
Today they have about 122 cows, 160 heifers and youngstock and run about 400 acres of corn and alfalfa, 320 of which are rented.
Edelburg said one of the biggest challenges they faced getting started was financing. At the time they bought the farm, their equity was about 7 percent. She said most commercial lenders wouldn’t look at providing a loan for equity less than 40 percent, although she said it varies depending on the institution. They turned to the Farm Service Agency.
“The Farm Service Agency is the easiest one for beginning farmers because it is easier to get approved. You don’t necessarily need credit scores or equity levels. You have to make sure that you can cash flow; that is what they want to know,” she said.
FSA also has funding set aside for beginning farmers and socially disadvantaged farmers. Edelburg said although FSA may be easier to get approved, the paperwork is a lot more intensive and the process takes a lot longer than traditional lending. She said over the years they have used both, but are happy to not have a traditional loan right now, especially with how tight lending has gotten in the current farming environment.
“Finances are probably the No. 1 thing that drives people out of farming. When you first get into it, you need to have a very effective business plan,” she said, adding writing and following a budget is crucial for getting from month to month.
“(A budget) is something that we follow monthly and strangely enough, it stays fairly consistent from month to month,” Edelburg said, noting they also create a profit and loss statement at the end of each year to see where they are.
Finances may be tight, but Edelburg said they have had to get creative in meeting obligations. They used to use an annual operating loan to pay down existing debts, but in recent years they have turned to using their vendors to help get through, paying them off over time instead of right away.
“Some vendors are much more willing to do this than others. The down side is that they are going to charge you 18 percent interest, but when you don’t have a bank to help you get the loan to cover the finances, you make it work. It is not the best way to run a business by any means,” she said.
Edelburg said it is important to be honest with vendors if you are unable to pay them right away so that they don’t take you to collections.
Another challenge Edelburg said they faced getting started is the learning curve to starting a farm with nothing.
“Maybe you didn’t grow up on a farm, you don’t have years of parents, uncles and so on coming back to you and telling you how to fix things,” she said. “The first winter was one of the coldest winters on record and absolutely everything froze. It was a horrendous learning experience, but we pulled through.”
She said they had to learn the hard way about securing access to land and the hierarchy of custom work. They also learned that it takes time to establish relationships with all the moving pieces of farm operation and that a new farmer can not expect everyone to automatically trust them.
In the end though, Edelburg said being her own boss has been an amazing experience and not having past generations telling them how things need to be done has allowed them to make decisions and changes on the farm as they needed to.
“If we wanted to take off at 2 p.m. and go to town or hire someone to milk cows so we could go watch a sporting event, we did and we weren’t getting criticized,” she said.
Edelburg said there are a lot of opportunities out there for new farmers including grants and training programs, but there will definitely be challenges along the way. She said her biggest advice is to get involved in things outside of the farm because it allows you to take a break from the stress of the farm, learn and share your opinion.
“They will help you grow professionally and personally, you will notice that you don’t all agree, but it helps you stay informed,” she said. “Collaboratively we have a much louder voice.”
Source: The Country Today
