June Dairy Month: Bridgewater Dairy

By Dusty Sonnenberg

Now in its fourth decade producing milk in Northwest Ohio, Bridgewater Dairy has seen its share of good times and challenges. Managed by Leon and Chris Weaver, Bridgewater Dairy was built and started milking cows in 1990. The Williams County farm started milking 2,000 cows and a decade and a half later expanded to milk around 3,000 cows. In 2011, the partnership that owns Bridgewater Dairy also purchased Oakshade Dairy in Fulton County and milks around 1,500 cows at that location. All the heifers and dry cows from both farms are raised at Bridgewater. The Bridgewater Dairy produces all its own feed on 5,000 acres of ground. The feed for Oakshade Dairy is purchased from local farmers.

The dairy industry has seen its share of challenges over time.

“For the first 20+ years, there were ups and downs in the dairy industry as we were getting the farms going,” said Chris Weaver. “The last four years have been some of the most difficult that anyone can remember. They have been every bit as difficult as the 1980s were on the dairy industry.”

Low milk prices and increasing feed costs provided plenty of challenges.

“Last year was OK and seemed to feel like it could be a survivable business,” Weaver said. “This year is a little better with milk prices increasing and healing some wounds but increasing feed costs and labor shortages continue to present challenges. The real unknown in the marketplace is how long the higher milk prices last. Are they just temporary or will they last for a while? Will they fall and we will still be stuck with higher feed costs?”

Weaver is optimistic that things will get better.

“I am positive and encouraged. We are investing money fixing buildings and on deferred maintenance to get things caught up. In this industry we work to get caught up and prepare for future downturns,” he said.

COVID-19 hit the dairy industry especially hard. Some processors that produced milk packaged for the food service industry and schools had to slow down and, in some cases, stop processing milk all together due to a lack of demand. Some farms that supplied those facilities had to dump milk as a result of the supply chain and logistical challenges. Several dairy farms had contracts canceled and went out of business due to not having anywhere to ship their milk.

“During the pandemic we were fortunate that our cooperative was able to manage all the milk that we supply,” Weaver said. “We did not need to dump any milk. However, it still hits the whole marketplace. The way the market works, it is trying to balance everyone’s supply of milk. In the end we are all still farmers, and everyone feels bad for those that needed to dump milk. COVID was a disruption in the marketplace, but it also seemed to bring people back to milk. Once we got the milk into the form people wanted it, it turned into a positive.”

Globally, COVID is still impacting the dairy industry — 22% of U.S. milk production is exported. A significant part of that goes to China. China is the third largest importer of U.S. dairy products behind Mexico and Canada.

“I recognize that China is a big wildcard, and with COVID resurfacing in China again and their lockdowns, that could be a variable that could really mess things up,” Weaver said. “Global demand is up, but a significant drop in exports to China could really hurt us.”

The overproduction of milk in relation to the processing capacity is a challenge the industry faces constantly. While some countries have used a quota system for years, now some parts of the United States have gone to a similar system to manage milk supplies. The United States, though, still lacks adequate milk plant processing capacity.

“Most of the United States has put restrictions on dairy expansion because we are out of plant space. We are fortunate that there is still some powdered milk plant capacity in Michigan, so that is positive for our region,” Weaver said. “The other challenge on the processing side is that these plants are so expensive to build, and they take three years to complete, so there is not a quick fix.

“As long as overall milk consumption continues to increase by 1% to 1.5% percent every year, which it has done for the last several years, that is good for the dairy farmer. If our demand continues to increase at some level, we do not have the plant capacity to supply and meet that demand unless something changes to increase the processing capacity.”

Along with quotas limiting dairy farm/milk expansion, another factor that will impact milk supply is a shortage of dairy heifers.

“There is a real shortage of heifers and springers coming into the system. A lot of farmers in last four years switched to breeding some beef into their herd,” Weaver said. “We have for the past couple years used A.I. (artificial insemination) with sexed semen in the earlier breedings and if a cow did not get pregnant, we would breed it to beef and probably 20% of the animals going out have had beef in them. This has been a trend nationwide, and so now there is just a shortage of dairy heifers out there. The challenge now is that it takes two years to ramp back up and turn the heifer supply around.”

Along with the day-to-day challenges dairy farmers face raising their cows and feed and producing milk, growing environmental concerns and social pressures also come in to play. The industry has responded to these concerns by educating both farmers and consumers about best management practices, what goes on in modern dairy production and how it is designed with the environment and animal care in mind.

“There are some people concerned that we milk cows and that it can have an impact on the environment. I know we try really hard, and I think most farmers do care, and work to protect the environment. I think on any dairy farm, but especially on a large dairy farm, we can treat the soil and water as good as anybody. We are monitoring our soil test levels and water quality all the time,” Weaver said. “I think with the increased attention to carbon and carbon sequestration the dairy industry can play a huge role and help other companies balance their emissions. I am excited about that. At Bridgewater, we are partnering with a company and are going to build a digester to help put gas into the pipeline.”

The labor challenges that face the nation are also faced by the dairy industry. Finding skilled and general labor, management and specialty workers who are all in demand is difficult. The competition for good workers is constant.

“Finding people who understand the industry and the hours required and the culture of agriculture and the seasonality at times is more and more difficult. Some farms have turned to robotics to offset the labor issue,” Weaver said. “We have looked at robotic milkers, but economically it makes more sense for our farms to stay the way we are. Robotics are a big investment, and you need to hire a different type of employee to manage the robots rather than just manage the cows.”

Labor and truck driver shortages also impact the dairy industry.

“Occasionally, we have had difficulty getting milk trucks here on time,” Weaver said. “Fortunately, they have always come. I know dairy farmers in other parts of the country who have had to dump milk because they could not get truckers to haul the milk to the plants. There were no drivers available.”

Consolidation of suppliers and support industries has also impacted dairy farms. As farm equipment dealers consolidate and there are fewer individual dealerships to work with, the level of competition has declined and that can be a negative consequence.

“I think most farmers look to a dealership obviously for purchasing equipment, but more importantly for servicing it,” Weaver said. “As we have fewer dealers to choose from and the competition is reduced, it limits the options for the local farmers.”

Supply chain issues have plagued the dairy industry in the last few years.

“Getting a number of different supplies in has been very challenging. Milk quality is extremely important to us. The supplies we need to change regularly impact our milk quality, and the things we would order on a monthly basis that were more just-in-time are now six months out,” Weaver. “As an example, we change the hoses on our milkers every six months. The hoses can impact milk quality. Since we have so many units, we are changing one sixth of the hoses every month in rotation. When the supply chain broke down, and we realized we could not get them just-in-time like we did when we ordered monthly, we had to change how we did things because it was going to be six months until the next order came in. The same can be said for pumps and other things we need to work on. The list of parts we are waiting on just keeps growing. Ear tags are another example. We put an order in for new ear tags six months ago knowing the delays that existed, and fortunately they arrived just-in-time, but that was with a 6-month order lead time.”

Looking to the future, Weaver feels that there will still be a place for dairies of all sizes in the industry if they can fill a niche market.

“For small farms, changes in the marketplace will continue to make dairy farming challenging,” Weaver said. “The trucker shortage is not helping the situation. As soon as you can get to a tanker load capacity, your life gets easier. I think small farmers are going to need to find a niche and be able to process and market their milk, whether it is processing and bottling their own milk or starting a cheese plant, there are opportunities. The challenge is still that at some point it becomes a matter of efficiency in the marketplace. Niche markets will always exist for those that can fill them.”

Weaver also feels the industry needs to do a better job at innovating and marketing.

“The industry has typically focused on commodity cheese and commodity gallon jugs of milk. Different packaging and product offerings can go a long way,” Weaver said. “There is pressure from plant-based products, and we have lost some market share because we are not innovating. At the end of the day, dairy milk is by far the best way to get protein and energy. We need to find a way to develop the product and packaging that consumers are asking for.”