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Riverview Dairy’s Bold Expansion: The Future of Dairy Farming in Eastern North Dakota

Uncover the transformative potential of two sprawling dairy farms in eastern North Dakota, poised to reshape the state’s livestock sector. Could this monumental shift redefine the future of local agriculture?

North Dakota’s dairy industry horizon is set for a dramatic shift. Two major dairy farms planned for eastern North Dakota by Riverview Dairy, based in Morris, Minnesota, could quadruple the state’s dairy cow population. The proposed 25,000-cow farm in Traill County and 12,500-head farm in Richland County aim to rejuvenate the state’s declining animal agriculture sector. Currently, North Dakota has about 10,000 dairy cows across 24 farms. These projects represent a significant boost, promising new growth, employment opportunities, and technological advancements.

Revitalizing a Declining Dairy Sector: North Dakota’s Fight to Rebound Amid Regional Growth

North Dakota’s dairy industry has declined for decades, with only 10,000 dairy cows and 24 farms remaining. In contrast, South Dakota has seen a significant resurgence in dairy farming. Under former Governor Dennis Daugaard, South Dakota’s dairy cow population nearly doubled from 96,000 in 2000 to 187,000 in 2023, according to the U.S. Department of Agriculture. This comparison underscores North Dakota’s challenges in revitalizing its dairy sector while neighboring states advance in livestock industries.

Riverview Dairy’s Bold Expansion: Transforming the Dairy Landscape in Eastern North Dakota

Based in Morris, Minnesota, Riverview Dairy plans to build two large dairy farms in eastern North Dakota. The Traill County site southeast of Hillsboro will house 25,000 dairy cows and cost an estimated $180 million. The second farm, located north of Wahpeton in Richland County, will accommodate 12,500 cows at an estimated $90 million. The Traill County farm is expected to create around 100 jobs, while the Richland County site will generate 45 to 50 jobs, significantly boosting the local job market and community.

A New Dawn for Eastern North Dakota: Riverview Dairy’s Economic Promise 

The proposed dairy farms by Riverview Dairy signal a significant economic boost for eastern North Dakota, specifically in Traill and Richland counties. The 25,000-cow dairy farm in Traill County and the 12,500-head dairy in Richland County mark a transformative shift in the local economy. In Traill County, the new dairy is set to create about 100 jobs. At the same time, in Richland County, it will generate around 45 to 50 jobs, bringing economic stability and growth to these communities and fostering a sense of hope for the future. 

Jim Murphy of the Traill County Economic Development Commission called this development a “once-in-a-lifetime event for any community.” Local land renter Randy Paulsrud, initially concerned about losing farmland, now sees great potential in partnering with the dairy. “I’m on board with it,” Paulsrud stated, noting his eagerness to sell feed and buy manure for fertilizing nearby fields. His visit to Riverview’s existing dairy operations left a strong impression. “Oh man, it was clean,” he said, expressing his enthusiastic support for the project. 

The economic ripple effect of these dairy farms goes beyond just job creation. Increased demand for locally sourced feed ingredients like corn and alfalfa hay, along with byproducts from nearby ethanol and processing plants, promises to spur growth in auxiliary agricultural sectors. Riverview Dairy’s expansion could catalyze regional economic development, reaffirming North Dakota’s commitment to revitalizing its dairy industry.

Community Reactions: Balancing Optimism and Skepticism

The proposed mega-dairies have generated mixed reactions in eastern North Dakota. Leslie Viker, who is related to the landowners near Hillsboro, is optimistic. “I think this is going to be great,” she said, supporting the economic benefits. Conversely, Rep. Dawson Holle, a local farmer, is cautious. “I’m very concerned when it is a corporate farm that is coming in, not a family farm,” he stated, emphasizing worries about corporate agriculture overshadowing family farms. This division highlights the complex dynamics as residents weigh economic opportunities against traditional farming and local ecosystems. Some see a future full of promise, while others remain skeptical, balancing hope with caution.

Legislative Shifts: Governor Doug Burgum’s Vision for Modernizing Livestock Operations in North Dakota

Loosening restrictions on corporate farm ownership for livestock operations was a key objective for Governor Doug Burgum entering the 2023 legislative session. This shift aimed to attract significant outside capital for modern livestock operations, transforming the state’s agricultural policy. The legislation made it easier for large-scale operations to establish themselves in North Dakota. 

State Representative Mike Beltz, R-Hillsboro, supported this change, crediting it for drawing Riverview Dairy’s investments to Traill and Richland counties. The Legislature also passed a bill to enhance infrastructure projects supporting agribusiness development, presenting road and utility improvement opportunities around the new dairy sites. 

Agriculture Commissioner Doug Goehring mentioned that Riverview’s structure as a limited liability partnership would have allowed its operations even without the legislative changes. However, the new law showed the state’s readiness to welcome large livestock projects. Not all legislators favored it; concerns about corporate entities encroaching on family farms were raised. State Rep. Dawson Holle expressed unease about the rise of corporate farm structures over family-owned farms.

Environmental and Infrastructural Challenges: Can North Dakota Sustain the Demands of Mega-Dairies? 

The proposed expansion by Riverview Dairy has sparked discussions about North Dakota’s capability to manage these large-scale operations’ environmental and infrastructural demands. Todd Leake of Grand Forks County questions whether state regulators have the necessary resources to enforce environmental regulations for concentrated animal feeding operations. These concerns reflect broader anxieties about water usage and waste management. 

Amber Wood, executive director of the North Dakota Livestock Alliance, acknowledges the challenges but remains optimistic. She believes the dairy industry’s growth will concentrate along the I-29 corridor, where infrastructure for milk processing and livestock feed from local ethanol and processing plants is more accessible. 

Legislative actions aim to support these developments through road and utility improvements. For instance, the Traill County dairy will connect to North Dakota Highway 200, which recent legislative initiatives have facilitated. 

Environmental considerations also play a significant role. The Traill County site will need about 700,000 gallons of water daily, highlighting the necessity for sustainable resource management. Riverview Dairy plans to use advanced manure management systems, separating liquids for fertilizer and solids for bedding. This method minimizes environmental impact, but effective state oversight is crucial for compliance and ecosystem protection.

Riverview Dairy’s Innovative Operational Features: Climate-Controlled Barns, Efficient Milking, and Strategic Nutrition 

Riverview Dairy plans state-of-the-art features for their new farms. Martha Koehl explained that cows will live in climate-controlled barns, ensuring optimal conditions year-round. Milking machines will run 22 hours daily, with the remaining two hours for cleaning, maximizing productivity and hygiene standards. 

The cows’ nutrition will include corn and alfalfa hay, enhanced by beet pulp and soybean from local plants like the American Crystal Sugar beet plant in Hillsboro and new soybean crushing plants at Casselton and Jamestown. This supports local agribusiness and ensures a nutritious diet for the livestock. 

Innovative waste management will also be implemented. Liquid manure will be piped to fields as fertilizer, while solids will be dried and reused as animal bedding. This sustainable approach underscores Riverview Dairy’s commitment to environmental stewardship and operational efficiency in North Dakota.

Water Management and Sustainability: Riverview Dairy’s Closed-Loop System 

An essential resource for large dairies is water, which needs 28 to 30 gallons per cow daily, Koehl said. That amounts to around 700,000 gallons per day for the Traill County site and 350,000 gallons for the Richland site. 

Riverview Dairy employs a closed-loop system to enhance sustainability. Extracting water from manure solids reduces freshwater dependency and mitigates waste. The recovered liquid is used for irrigation, promoting water conservation, and boosting agricultural productivity. The dried manure solids serve as bedding material, minimizing waste and improving farm hygiene. 

Incorporating byproducts from local ethanol plants and sugar beet processing facilities into the cows’ diet underscores Riverview’s commitment to sustainability. These feeding practices utilize available agricultural byproducts, reducing reliance on traditional feed sources and fostering a circular economy in the region.

The Bottom Line

The proposed Riverview Dairy projects in eastern North Dakota signify a transformative moment for the state’s dairy industry. With an addition of 37,500 dairy cows, North Dakota’s dairy cow population could quadruple, promising job creation and economic growth. However, these benefits come with challenges. Environmental sustainability, water management, and stringent regulations are crucial hurdles. The balance between expanding corporate farming and preserving family-owned farms requires thoughtful community and legislative dialogue. North Dakota’s dairy future hinges on ambitious projects like Riverview Dairy and collective efforts to address these challenges. This moment calls for proactive engagement and a commitment to nurturing the dairy sector for future generations.

Key Takeaways:

  • Massive Expansion: Riverview Dairy plans to build two mega-dairies in eastern North Dakota, significantly increasing the state’s dairy cow population.
  • Job Creation: The projects are expected to generate approximately 145 to 150 jobs, bolstering local economies.
  • Economic Impact: Combined project investments are estimated at $270 million, indicating a substantial financial infusion into the region.
  • Community Reactions: Local residents express mixed feelings, balancing initial skepticism with optimism about economic benefits.
  • Legislative Support: Recent legislative changes facilitate outside investment in livestock operations, reflecting a shift in North Dakota’s agricultural policies.
  • Environmental Considerations: Concerns about the state’s ability to regulate large-scale animal feeding operations remain, highlighting the need for robust environmental oversight.
  • Sustainability Practices: Riverview Dairy’s operations include climate-controlled barns and innovative manure management systems, aimed at minimizing environmental impact.

Summary:

North Dakota’s dairy industry is set to undergo a significant transformation with two major farms planned by Riverview Dairy, based in Morris, Minnesota. The 25,000-cow farm in Traill County and the 12,500-head farm in Richland County aim to revive the state’s declining animal agriculture sector. Currently, North Dakota has about 10,000 dairy cows across 24 farms, but these projects represent a significant boost, promising new growth, employment opportunities, and technological advancements. The proposed farms will create around 100 jobs in Traill County, while the 12,500-head farm in Richland County will generate 45 to 50 jobs. Increased demand for locally sourced feed ingredients and byproducts from nearby ethanol and processing plants will spur growth in auxiliary agricultural sectors. Riverview Dairy’s expansion could catalyze regional economic development and reaffirm North Dakota’s commitment to revitalizing its dairy industry. Community reactions to the proposed mega-dairies have generated mixed reactions, with some optimistic about the economic benefits while others are cautious about corporate agriculture overshadowing family farms. Legislative actions aim to support these developments through road and utility improvements, and Riverview Dairy plans to use advanced manure management systems to minimize environmental impact.

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May Dairy Margins Soar to $10.52 per cwt: No Indemnity Payments for Third Month Despite High Feed Costs

Explore the factors behind May’s exceptional dairy margins reaching $10.52 per cwt amid elevated feed prices. What were the consequences for indemnity payments, and how are dairy producers faring as a result?

The Dairy Margin Coverage (DMC) program has demonstrated remarkable resilience, showcasing a robust dairy market as May’s margins soared to $10.52 per cwt—the highest since November 2022. Despite escalating feed prices, the absence of indemnity payments for the third consecutive month underscores the industry’s ability to weather economic challenges and emerge stronger. This should reassure stakeholders about the stability of the dairy industry. 

USDA’s Agricultural Prices Report Highlights Robust Dairy Margins Amid Rising Feed Costs

MonthIncome over Feed Cost ($/cwt)
May 2024$10.52
April 2024$9.60
March 2024$9.50
February 2024$8.90
January 2024$9.20
December 2023$9.30

On June 28, the USDA National Agricultural Statistics Service (NASS) released its Agricultural Prices report. This report helps calculate the feed costs used to determine the May Dairy Margin Coverage (DMC) program margins and indemnity payments. The information provided by NASS shows essential trends and changes in the dairy industry and is a valuable resource for stakeholders. 

In May, income over feed cost was $10.52 per hundredweight (cwt), the highest margin since November 2022. This high margin indicates an excellent economic situation for dairy producers despite the ongoing rise in feed prices.

May’s Feed Cost Analysis Reveals a Multifaceted Picture of Rising Expenses Across Key Feed Components 

Feed ComponentPriceChange from AprilChange from May 2023
Alfalfa hay$276 per tonUp $16Down $41
Corn$4.51 per bushelUp 12 centsDown $2.03
Soybean meal$388.65 per tonUp $30.97Down $34.93

May’s feed cost analysis reveals rising expenses across key feed components. Alfalfa hay averaged $276 per ton, up $16 from April but $41 lower than last year, reflecting complex market dynamics. 

Corn prices rose to $4.51 per bushel, an increase of 12 cents from April but down $2.03 from May 2023, highlighting broader market changes. 

Soybean meal cost $388.65 per ton in May, up $30.97 from April but down $34.93 from last year, indicating decreased cost pressures compared to the previous year. 

Total feed costs, calculated using the DMC formula, reached $11.48 per cwt of milk sold, a 58-cent rise from April. The strong milk market has helped dairy producers maintain favorable margins despite higher feed costs.

May Marks a Robust Rebound in Milk Prices, Led by Upper Midwest States’ Surge

StateMay 2024 Price ($/cwt)April 2024 Price ($/cwt)Change ($/cwt)
South Dakota23.0019.40+3.60
Minnesota22.9019.50+3.40
Iowa22.8019.60+3.20
Wisconsin22.7020.00+2.70
Florida24.8024.800.00

The U.S. average all-milk price for May rose to $22 per cwt, the highest since January 2023 and a notable rebound. This $1.50 increase from April is $2.90 higher than last year, highlighting a more robust market for dairy producers. 

Upper Midwest states saw significant increases. South Dakota plunged to $23 per cwt, up $3.60 from April. Minnesota, Iowa, and Wisconsin followed with notable rises of $3.40, $3.20, and $2.70 per cwt, respectively. 

These improvements were driven by a rally in Class III milk prices, reflecting favorable market conditions and positive changes for many dairy producers. This should instill a sense of optimism in stakeholders about the dairy industry’s future.

A Period of Financial Resilience: How Dairy Producers Are Navigating Feed Price Volatility with Robust Margins

Substantial income over feed costs has provided dairy producers with a crucial buffer against volatile feed prices. Despite the increased costs, robust milk prices have maintained positive margins, essential for sustaining operations. This impressive financial resilience should instill confidence in stakeholders about the stability of the dairy industry. 

The lack of indemnity payments for the third month in a row highlights the solid financial footing of many producers. Producers have navigated without needing supplemental assistance with income over feed costs above the DMC program’s top coverage level. Year-to-date, indemnity payments for those enrolled in the 2024 program have remained steady at $4,270, indicating a stable period. 

Even with rising feed prices, this sustained period of favorable margins bodes well for the industry. It allows producers to reinvest in their operations and prepare for future market uncertainties. As margins remain strong with predictions for further improvements, the outlook for dairy producers looks promising.

A Promising Horizon for Dairy Margins: Projected Stability and Growth 

The future for dairy margins looks promising. Per the DMC online decision tool forecast on June 28, margins are expected to stay strong, exceeding $12 per cwt for the rest of the year. This positive outlook relies on stable feed costs and a favorable all-milk price, expected to be above $21 per cwt through December. 

October is projected to achieve the highest margin in the program’s history at $13.74 per cwt. This forecast indicates potentially excellent income over feed cost margins, reminiscent of strong financial performance in early 2022. However, market conditions can change, which could affect these predictions.

The Bottom Line

Despite elevated feed costs, the dairy sector maintains resilience with favorable margins and strong milk prices. May 2024’s income over feed cost was $10.52 per cwt—the highest since November 2022. South Dakota led the Upper Midwest price surge at $23 per cwt. This strength has negated the need for indemnity payments, though producers watch market trends closely. Projections suggest continued strong margins, potentially matching 2022 levels. The June margin, to be announced on July 31, will shed more light on the dairy sector’s financial outlook.

Key Takeaways:

  • No indemnity payments for the Dairy Margin Coverage (DMC) program were issued for the third consecutive month.
  • Income over feed costs remains favorable for dairy producers despite rising feed prices.
  • May’s income over feed cost was $10.52 per hundredweight (cwt), the largest margin since November 2022.
  • Average milk price in May was $22 per cwt, representing an increase of $1.50 from April and $2.90 from the previous year.
  • Highest price improvements were recorded in the Upper Midwest states, with South Dakota leading at $23 per cwt.
  • Feed costs have increased across all components: corn, alfalfa hay, and soybean meal.
  • The May DMC total feed cost was $11.48 per cwt, up 58 cents from April.
  • Despite these feed cost increases, strong milk prices have maintained robust margins for producers.
  • Year-to-date indemnity payments are unchanged at $4,270 for producers enrolled in the 2024 program period.
  • Predicted margins are expected to be strong for the remainder of the year, potentially matching 2022 values.

Summary: 

The Dairy Margin Coverage (DMC) program has reached its highest margin since November 2022, indicating an excellent economic situation for dairy producers despite the ongoing rise in feed prices. The absence of indemnity payments for the third consecutive month reassures stakeholders about the dairy industry’s ability to weather economic challenges and emerge stronger. The USDA National Agricultural Statistics Service (NASS) released its Agricultural Prices report on June 28, which helps calculate feed costs used to determine the May Dairy Margin Coverage (DMC) program margins and indemnity payments. In May, income over feed cost was $110.52 per hundredweight (cwt), the highest margin since November 2022. May marked a robust rebound in milk prices, driven by a rally in Class III milk prices, reflecting favorable market conditions and positive changes for many dairy producers. Substantial income over feed costs has provided dairy producers with a crucial buffer against volatile feed prices, maintaining positive margins essential for sustaining operations.

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