The Endres dairy owns this rich, rolling farmland looking southwest from Patton Road toward Cuba Valley Road in the town of Vienna. But its 500-cow milking operation is small compared to some of the larger dairies in the county that are in a price war buying nearby land in the town.
The ongoing hunt by some of Dane County’s largest dairy operations for more farmland needed to spread manure and grow feed has led to a wild price war where per-acre purchase costs are climbing to levels nearly five times higher than the state average, state records show.
One dairy operation paid $17,214 per acre for two parcels in the town of Vienna last December, and some other operations have paid anywhere from $10,000 to $16,000 per acre for farm land since 2010, according to state Department of Revenue online records. The per-acre average for ag land sales was $3,586 in the state and $4,869 in south-central Wisconsin in 2013.
UW-Madison dairy analyst Arlin Brannstrom said he couldn’t recall any other deals in the state where ag land not planned for development was sold for more than $17,000 an acre. “That’s really on the high end of what we see,” added Brannstrom, who published a report on 2013 state ag land sales for the UW-Madison Center for Dairy Profitability in March.
The climbing sale numbers are alarming because affordable land prices are the key to keeping the dairy industry viable in Wisconsin, Brannstrom said. He added that farmland sale prices that began climbing again this year after stagnating for most of 2013 have closed whatever slim chances were left for a young dairy farmer to start out on his own in this area.
“If you want to be a farmer you better be born into a family that farms. It’s unfortunate, but that’s the way the world is going,” Brannstrom said.
The county’s bigger multi-family, or corporate, farms are heading toward danger, too, when they begin to compete more with developers and other land issues for what is left for sale in the county, Brannstrom added. He said that could lead dairy production to shift away from Dane County as well as metropolitan areas of Milwaukee and the Fox Valley.
“If you buy land for $16,000 an acre in Dane County and can buy it in Marathon County for a quarter of that price, it makes you question why you’d want to tie that money up in Dane County,” Brannstrom said.
Some of the highest prices paid for ag land are along a five-mile stretch of Cuba Valley Road in the town of Vienna, state Department of Revenue records show. Leo and Carol Ziegler spent $1.3 million for 77 acres — or $17,214 per acre — on Cuba Valley Road that is about a mile from Interstate 90. The land adjoins 344 acres that the Zieglers, who operate a large dairy based in the town of Springfield, purchased for $3.5 million ($12,726 per acre) in 2011, state records show. All the land had been previously farmed by Kaltenberg Seed Farms, which closed in 2010.
Gary and Nancy Endres, who operate a 500-cow dairy farm on the opposite end of Cuba Valley Road near Waunakee, paid $246,000 ($12,300) for 20 acres across the road from their farm, according to state records. Dairy farmers Stanley and Judy Rauls paid just over $1 million ($11,000) for three parcels totaling 95 acres in 2010 that is near Ziegler’s purchase.
Also in the town of Vienna, Dustin and Chelsey Kelley paid $586,160 ($14,927) in 2013 for a 39-acre tract on Highway V, Michael and Carrie Meier paid $392,770 ($12,670) for 31 acres on East Street, and Blue Star Dairy Farms paid $682,000 ($6,800) for 68 acres in 2010.
Most of the purchases followed multiple blind bids made by competing dairy operations, said Art Meinholz of the Blue Star dairy that milks 2,700 cows on three county sites. In some cases, the land adjoined property the dairies already owned or the dairies were buying land they had been renting, Meinholz added.
That is key because it’s less expensive to take care of the manure and feed challenges if dairy operations have enough land close to their livestock operations, Brannstrom said. He added that it takes 2 to 3 acres of cropland to grow the 8 tons of silage or hay and 100 bushels of grain that one cow consumes each year. So while dairy farmers need more cows to make more money, they can’t add cows without adding land, too.
“It’s a vicious cycle,” Meinholz said. “It’s not like you can double the size of your herd without adding land.”
Since some of the county’s 19 dairy operations that have 500 or more milking cows are located close to each other in the towns of Springfield and Vienna, the competition for land that becomes available for sale in their areas can be fierce. “This is all farm driven,” said Gary Endres. “Every piece of property you buy, you pay too much for it.”
But some of Ziegler’s recent purchases on Cuba Valley Road adjoin a residential development that is part of the county’s continued population movement north and east from Madison. Dane County Executive Joe Parisi said the growing interaction between developers and rural county land concerns him.
“When you see some of the farms out by Waunakee and Middleton, the suburbs are right in their backyards,” he added. “So this points to some of the tough questions we have to answer as we develop. We have to develop as consciously as possible and manage our growth.”
Parisi said county officials are working hard to help the dairy farms stay viable. “It is of concern both culturally and economically because agriculture and the dairy industry are big part of Dane County,” he added.
Endres said if the county really wants to help the farmers, it needs to become more flexible with how it forces farmers to handle manure storage. He said the county’s regulations limit his ability to expand his storage and force farmers to make costly fixes that aren’t always needed.
“The county wants to help, but there are too many strings attached,” Endres said.
It’s a frustrating dilemma for farmers, especially since manure has been targeted as the biggest culprit for the algae problem in the county’s lakes. Parts of the town of Vienna also are more susceptible to groundwater contamination than other parts of the county, according to an analysis by the United States Geological Survey.
While Meinholz said he uses the digester that opened recently in the town of Springfield to remove phosphorus from his liquid manure, Endres said farmers near Waunakee don’t have that luxury because the digester there is always at capacity. It also had two spills last winter after malfunctioning.
Digesters also don’t eliminate much of the liquid manure so most of it comes back to the farmer and must be spread. “The county has to look at some other options if they really want to help us,” Endres said.
Perhaps, the biggest benefit of the Cuba Valley Road properties is the quality of the soil, which is characterized by its darker color and good drainage. Common in the north-central portions of the county and southern portions of neighboring Columbia County, the Plano series of soil is considered the best for growing cash crops like corn and soybeans and is prevalent in corn-growing states like Illinois, Indiana and Iowa.
“Farmers want good soil that drains well and can go several miles before they hit a hill or something else,” Middleton real estate agent Jim Rawson said.
Wisconsin’s shortage of quality, tillable land is why it lags neighboring states in market value for its farmland, Brannstrom said.
State ag land sells for an average of ,791 less per acre than ag land in Iowa when purchased in deals where the sale price is between 0,000 and 9,999, according to the 2012 Ag Census that was published in May by the National Agricultural Statistics Service.
“In most of Iowa and Illinois, if you buy 80 acres, you get 79 that are tillable. In most of Wisconsin, you might be lucky to get 50 acres of tillable land if you buy 80 acres,” Brannstrom said.
The bigger dairy farmers don’t see paying too much to add land as an expensive gamble, especially if they are established family operations that paid off other major land purchases decades ago.
“In order for us to pay too much for land, you need collateral,” Meinholz said. “Our collateral is the land we already own.”
