Archive for June 2021


Dairy farms in the US are consolidating at a faster rate today than any other agricultural commodity. And it isn’t only happening on the farm itself. A recent BULLVINE article addressed consolidations in dairy sire lineups. “Many of the smaller A.I. units have been purchased by larger genetic players and the rate of change has accelerated considerably. (see Stud Wars May ’21 – Attack of the Clones). Obviously consolidation is not a new phenomenon in a single aspect of the dairy industry. But, in the interest of what is most desirable, let’s look at dairy farms from the perspective of size. 


There are many ways to gather actual statistics about the current size of dairy farms and how many cattle each herd sector is milking. These statistics have been reported by USDA 2019?

  • In 1987 the average US herd size was 80 milk cows.
  • In 2017 the midpoint in herd size had reached 1300 cows
  • Currently US herds of 1000 and more cows represent 58% of US dairy cows
  • US herds 1000+ cows produce 62% of total national production.
  • Between 2002 and 2019 more than half the licensed US dairy herds exited the industry.
  • Herds over 2000 milk cows have the highest on average net returns

In simplest terms, less than 6% of dairy farms are milking almost 60% of the total number of cows. At the top end of the scale, the average herd size is more than 3,000 cows. The total number of cattle is not getting smaller even as the total number of farms is dropping dramatically.


What is large? What is small?  Grandma’s small dairy farm worked sunrise to sunset providing for a specific group of people … the farm family.  Today’s dairy farm with the goal of supporting a family also works 24/7 but now must provide money for food, clothing, school fees, sports fees not only for the immediate family but also to provide milk products for 100 people. No matter what they physical size of the dairy is cash flow must be found for feed, labor, housing and replacements. Even beyond size, location and infrastructure could also be a limiting factor. When deciding whether to sell or consolidate, real estate values could be a major determining factor. Are generations of investment going to be reduced to nothing through mortgage payments or will it be cashed in for retirement? What door closes first?  Labor? Cash flow?  Feed? Animal health?


Wherever you are reading this from, you can most likely point to trends which are defined by fewer dairy farms of larger sizes.  Even in North America it is unrealistic to say that one situation applies in exactly the same way to the USA, Canada and Mexico.  South America, Asia and Europe are going through the same reshaping process.  The basic point is that dairy industry consolidation is global and complicated.  Causes, effects, sizes and methods cannot be simplified into one easily explained phenomenon such as milk prices or national supply and demand.


We are aware of the discussions about differences between historically revered family farms and factory farms which are reviled by many.  Are the two mutually exclusive?

We could dismiss those who uphold historical family farms because we recognize that their position is driven by handed down memories and not actual facts or experience. We all value our historical roots.  What is becoming a hurdle is that there are new perspectives on the value of “large”.  If everything large is put into one basket, we find large entertainment, large populations and large politics all jostling together and impacting our positive or negative experience of our life choices. Large farms gather from the negative


Can we factually determine at what size a family farm becomes a factory farm? If large families require larger dairy operations, does the term family farm not apply?  If the owners of a large dairy do not have multiple family generations sharing management is that dairy, regardless of size, a factory farm?

Modern dairy provides the opportunity to move beyond labels and stories.  The challenge is to move toward well-considered value-added food production while avoiding misguided milk production massing.


When considering the pros and cons of dairy consolidation there is not a clear winner. The oft repeated conclusion is that successful large, consolidated farms will be more efficient in terms of producing milks solids. They will achieve this by carefully incorporating generations of dairy knowledge, by themselves or others, into active present-day decision making. Is dairy muscle memory an absolute requirement for dairy success?

You might ask, “Does every consolidated dairy farm have more than one generation of farming experience?  Do any have five generations?”  These are interesting questions, but the answers don’t, by themselves, impact the success or failure of consolidated dairy farms. Mutual respect, teamwork and diversity of generations and workers does make a difference. New players have the opportunity to access and enact successful processes. Most important is knowing on a dairy farm to dairy farm basis what the limiting factors are.


When small farms give in or give up, what drives the final decision?  In many cases, it comes down to people – specifically the people needed to do the work. Dairy isn’t alone in facing the devastating impact that happens when it is impossible to find accessible and effective labour. Choices between the family business and the future success of the next generation are difficult if not impossible to choose between. Demanding work schedules and physically demanding jobs mean that fewer people are choosing dairy work.  Add to this that there is limited access to educational opportunities for farm workers.  At a basic level, it may come down to individual preferences for living near larger urban communities with greater access to infrastructure such as Internet access, health services, entertainment, schools, and shopping.

However, jumping to farm consolidation does not automatically provide the solution to labor problems. Housing, health care, education and transportation problems continue to loom large. Additionally, are the problems of local and federal regulations regarding immigration and, as the pandemic has highlighted, no dairy farm can operate in isolation from the health and welfare of the local community.


 Problems of law, labor, land, water, and energy can be foreseen, negotiated, and planned for. However, unforeseen forces also can impact consolidation plans.  Something as simple as the price of lumber, which has been rising exponentially, has an effect on implementing or maintaining consolidation effectiveness. Also largely unforeseen are the extreme disruptions from freezing, floods, drought and fires. The dairy industry has daily reliance on nature and environment in order to meet the demands of consumers and to improve sustainability of its production ecosystems. No matter what size your dairy operation is, you must be able to produce 24/7.


And so, we realize that consolidation does not boil down to a simple “either” “or” decision.  It is all to easy to get mired in milk, money and politics.  When does the cash cow of dairying become the barn lane cash out?  If only it was as easy as the slogan, “Buy American.” Unfortunately, dairying like thousands of other industries, does not exist in a vacuum.  Until every single product, nutrient, health product or piece of equipment is produced in the US. there is need for three things: global partnerships; consumers and money.

Even imagining a perfect world where these inputs are being handled, the cash implications of dairy overproduction are very real right now and must also be addressed.  Too much milk affects every producer.  Even in countries with supply management, the political ramifications in trade discussions, consumer rights and agricultural negotiations changes money margins on the farm and can be used as a political pawn. For example, it is recognized that supply management protects producers. What isn’t often talked about is the way supply management may protect exit from the dairy industry, but also the way it inhibits entry. Politically decision makers also walk a fine line between determining dairy industry relevance based on too big, too small, or too independent. While focused on elections and re-elections an entire industry could evolve into shrinking relevance.


Regardless of the size of the dairy operation, effective production relies on veterinarians, nutritionists, and agronomists to name just three sources outside the on-farm team.   Today we need developers of digital applications to integrate data points. Effective dairy management absolutely requires the ability to visualize the best way to improve decision making.  Without new applications, dairies face years of in-fighting over the same problems.  The opportunity provided by digital applications is that of creating outstanding dairy solutions to what have been oft-repeated problems. Will we fight for the status quo until the last puff of paper and pencil files spell “Closed”?  At some point, the larger dairies begin to question why they must carry all the technology and research and development. Is there mutual benefit?  Regardless of size is it possible to navigate change faster, while being more inclusive


Effective is possible in many sizes.  But the key to effectiveness does not rely on size alone. An informed consumer has been shown to be able to make food choices outside of personal experience with the production process. Growth industries built on an intimate purchasing experience such as is found within focused sales locations selling predominantly one beverage – think coffee or smoothies – highlights that the product not the size of the company, can be embraced by the consumer.  The question is, “Why do consumers feel they know how the dairy industry should be run. Their long past memories influence what they think it should look like. And driving all of these is the question of “What convinces people to make a beverage choice?”

COMMUNICATIONS & MEDIA – “Look who’s Talking”

We are well beyond the time or place where a simple answer can be summed up in a few words.  But open conversations will get us to a new dairy future. And this brings us to dairy communications and the media. We need ag communicators to reach out and make real connections with the new generation of consumers. Continued viability means that the dairy industry needs robust support from consumers and, therefore, dairy must tell the dairy product story with provable facts and transparency. Consumers need information which is based on integrity and real industry skill and development. We cannot stay locked in dated dairy – whether it is our own dairy or wrapped up in consumer long-ago memories.  Equally worrisome is the danger of simply changing everything to something new and different.  Designer Dairy may be successful, but it must be built on healthy, competitive, and sustainable products.

BULLVINE BOTTOM LINE – Where does it end?

The dairy industry of the future will not succeed if decisions are solely based on size.  The dairy industry of the future will not succeed, if decisions are based solely on sentimentality. In dairy consolidation, the whole is greater than the sum of its many dairy parts. A relevant dairy farm must be actively engaged with suppliers, professionals, local communities and consumers.  It is time to decide if dairy industry totals are temporarily readjusting or being permanently left behind.




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Select Sires Unification – The Federation Grows Stronger

The boards of directors from Select Sires Inc. and five local member cooperatives have voted to unite the federation to become Select Sires Cooperative Inc., according to a company press release. The decision must next be ratified by delegates or member-owners from each of the five member cooperatives. If approved, Select Sires will remain a farmer-owned and controlled cooperative.

“The decision to unify is going to be a pivotal force for Select Sires. We have had a tremendous history of success, but we can’t lean on our laurels,” said Dorothy Harms, chairman, Select Sires Inc. Board of Directors. “We must move forward, look to the future and make changes to secure our position as the industry leader.”

 “The Select Sires Board has done an amazing job of forward thinking and strategic planning and then taking something that is an emotional issue and turning it into something that takes the best of what Select Sires has been successful at over the years and to bring that forward and then add in the things that we need to do as an organization to be successful in the future.” says David Thorbahn, president, and CEO of Select Sires.

The Bullvine had the opportunity to sit down with Dorothy and David to get answers to many of the questions that farmers have been asking.

Why Now?

“When you look at the genetics industry, specifically The Bullvine Article entitled The Stud Wars, it becomes very apparent that the competition is very keen within the industry and, as Select Sires has a history of being a leader in AI, I think remaining at status quo leaves us liable for losing some of that positioning within the industry.  So, we felt that the member coops coming together can be stronger together, as a cooperative, and we can better align resources and people to best serve producers across the country.” comments Harms.

“This is not a snap reactionary decision” Harms shares, “Starting in 2016, the board with the help of Dr. Allan Grey from Perdue identified that research and development in the agriculture sector is growing at an exponential rate and if Select Sires wanted to continue to be a global leader in the bovine breeding space, they would need to invest significantly more.”

David Thorbahn points out that “We have to fund this through our own industry, whereas some of our competitors can do that with funds that come from other industries.”  Not wanting to increase prices to their customers or charge for services they don’t currently charge for, it was decided that they had to find other ways to fund these initiatives and be able to continue to be a global leader.

“Future needs include embryo transfer services to reduce the cost of sire development as well as biopsy and genotyping embryos to increase the rate of genetic progress while reducing costs. A genomics lab is needed to reduce program expense and provide genomic service to our farmer-owners. Select Sires has collected and has access to data, but we must have scientists to develop management solutions and expand investment in next generation technologies of sexed semen.” reports Thorbahn.

What does this mean for farmers?

The board is also not wanting to change the fact that Select Sires is farmer owned and farmer led. So, in working with Dr. Michael Boland, they decided that the current boards of the member cooperatives would form a representative assembly of about 45-60 producer members, and their role would be to oversee the operations and set the direction for Select Sires Cooperative Inc. Select Sires is an industry leader, and market share leader in the US and the board is not wanting to change the service. What they do see is the opportunity to streamline and increase the efficiency of how the organization supports those service representatives.

“I think, short term service should not change at all, but long term, I think it will improve” comments Thorbahn.  “The reason is we are going to be able to improve speed to market more products and services and do it in a way that is less costly to deliver. “

“As our member coops currently sit, none of the territories overlap, so there is no need for any changes there” points out Harms. One of the directives from the board is that there would be minimal if any changes to the customer facing portion of the business. “These are the people that really are the strength of Select Sires.  There will be the same technicians, sales managers, the same people coming onto the farms as currently.” adds Harms.

The proposed benefits to customer-owners include: access to a broader, more diverse team of experts; increased efficiencies will ensure long-term sustainability for the cooperative; and valuable investment in research and development translates to innovative solutions and tools for dairy and beef producers.

Not all member cooperatives are in favour. Why is that?

“While we cannot speak for them, it is important to remember that we are a federation of farmer-owned cooperatives and this decision was made by their board. This plan allows Premier Select Sires to continue as a part of the unified Select Sires and provides their members with access to the genetics. We can tell you they will not be able to take advantage of some of the same benefits as those members joining the unified cooperative, such as board representation and input on the cooperative’s direction. The opportunity for them to join is certainly something that could be revisited down the road.” adds Harms.

Who will have control?

Select Sires Inc. was founded on cooperative principles and will remain a farmer-owned and farmer-led organization. “And with that we wanted to ensure that we could remain a grass roots governed organization by farmers.” Harms adds. The current member boards of farmer directors will become the representative assembly. The representative assembly will meet at least four times per year, with at least one meeting to be held in-person, to discuss cooperative matters and provide guidance for the board of directors. The board of directors will meet four times per year in-person and provide direction for the cooperative. In the future, members of the representative assembly will be elected by member-owners in their respective divisions throughout the U.S., maintaining a grassroots cooperative. Committees will be developed to monitor local service to mirror the current cooperative territories. The representative assembly will elect a board of directors, which is like the Select Sires board today.

“This is the way that we take the best of what we did before, which was a grass roots cooperative, and improve it by improving the communication and coordination of the board and it’s ability to govern the cooperative going forward. We get the best of being local and the best of being a global entity.” says Thorbahn.

What changes internationally?

The global piece unified in 2017 with the merger with Accelerated Genetics, with that we assumed 100% control of World Wide Sires” says Thorbahn.  Outside of the Americas, Select Sires is marketed under World Wide Sires and has developed a strong brand and has no plans to change that. They will continue to represent their three brands, Select Sires GenerVations for elite dairy genetics, Accelerated Genetics known for high commercial value, and the Select Sires brand known for being America’s best.

What is your vision/goals?

“In our vision statement we talk about being a global leader, being the premier provider of bovine genetics to producers across the globe, as well as providing a great place for our employees to be working.” points out Harms.

“We are fortunate to have a board that is very much looking to the future and setting the direction to go and has the confidence that management can achieve this.”, comments Thorbahn, and as a result in 2016 the board set the goal to double their business in 10 years and, three years into that strategic plan, they have achieved their 5-year milestone.

“Our goals are almost 5-fold.  We need to be a tier one genetics company, but I believe that genetics in the future will be achieved by both semen and embryos.” says Thorbahn.  “With the advent of sexed semen, dairymen are now able to produce their own replacements. We will need to deliver elite outcomes not only on the sexed semen side, but we will also need to deliver the most value outcome on the remaining part of the herd, representing 30-55% of the cows.   In some cases, it will be an elite dairy beef animal or it could also be a full blood beef animal from an embryo, which would bring you an even higher value calf” adds Thorbahn.  With that comes the need to develop and ensure that Select Sires is a premier provider of the programs and genetics these outcomes require. Thorbahn also highlights the need for data management, “We have several major projects going in this area that will show fruit over the next couple of years.”  Select Sires is also looking into what is the 2nd generation of sexing semen, from possible means of gene editing to make an animal that only produces one sex, as well as continuing to be elite in the quality of the semen they produce.

When will this happen? What is the timeline for execution?

Select Sires Inc. and member cooperative boards voted in support of unification. The decision must now be ratified by member-delegates and member-owners. If unification is approved, it is estimated that Select Sires will transition to a unified cooperative by July 2022.

What happens after that?

“I think the heavy lifting comes on delivering on the business plan the board has set forward. Some of that can not happen till the board gives the direction to go ahead.  Once that starts there will be a lot of work for a lot of people. It will be very exciting work because everyone realizes they are doing this to improve the long-term sustainability and strength of Select Sires” comments Thorbahn.

The Bullvine Bottom Line

While these changes will certainly alarm many, there could also be an argument that this should have happened 10 years ago.  The industry is becoming more competitive than ever and stakeholders need to be as efficient as possible.  With making this move, Select Sires boards are demonstrating that they are willing to make the challenging moves to set up the cooperative for the future.

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