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Case Study 7: Dairy

About the farm

Don and Lucy are tenants on a 20-acre farm. They had been leasing land in the neighbourhood and had initially just rented pasture for their Jersey cow, but when the opportunity came up to live on a nearby farm, they jumped at the chance to move nearer to their cow and into a diverse community.

They are new to farming and new to dairy, but they have handled the uphill learning curve very well, and their business is thriving. The pair also grow vegetables for additional income, but the focus of this case study is on their single cow. This is their third year in business. They purchased the cow at the beginning of her first lactation, and then last year they bred her and she gave birth to a male calf. They have bred her again, and this year they are hoping for a female calf so they can have another dairy cow.

Farm Marketing

Don and Lucy face major legal barriers to their business, but they believe very strongly in what they are doing, and they have a devoted customer base who are very grateful for their products. The legal problem is that the sale of raw milk and milk products is prohibited in Canada. Only the owner of the cow is permitted to consume the raw milk products. As other farmers in Canada have done, Don and Lucy get around the issue by selling shares in their cow, and having their customers pay a monthly service fee for the milking and bottling. For added security they label all their milk products as pet food because the sale of milk for pet food is not prohibited.

Although they try to keep a low profile with their business, word of mouth has provided them with more customers than they can handle. Don and Lucy sell milk, yogurt and soft cheese.

Seasonal Workload

Tending to the cow and dealing with the milk takes approximately an hour and a half each day during milking. Since there are about seven people living on the farm at any one time, they fortunately can share this duty. The milk goes into a fridge in the market building so the cow shareholders can pick up on their own schedules. Don and Lucy make yogurt and soft cheeses during peak times in lactation, or whenever there is extra milk. This value-added processing requires a significant investment of time because of the sterilization measures and handling.

Farm Finances

A healthy Jersey cow like Don and Lucy's can lactate for 10 months of the year. The cow will start lactating at age two, and will peak at age eight. Jersey cows can be milked until they are about 14 years old. The lactation cycle looks something like this: for three months she'll yield seven gallons per day, over the next five months she'll average five gallons per day, and the last two months of her cycle she'll average three gallons per day. They figure it costs about $8 a day to feed her a special high protein hay and grain in addition to her access to the pasture.

Although technically they aren't selling the milk, they estimate its value at $10 per gallon. They have 21 share-holders in the cow who pay $50 each, and then $40 per month in maintenance fees. In exchange they get a gallon of milk per week, or a lesser amount and some yogurt and cheese. Their annual gross from dairy is approximately $15,000, while their net is closer to $8,000. Their big expenses are the feed, and vet bills. In future they plan to start growing more of the feed themselves, and to learn some of the more basic veterinary procedures, like estimating their cow's estrus cycle. They described the challenge of living remotely with a single cow. It is expensive to bring in a vet for the yearly artificial insemination - the cost is $180 per visit, regardless of the result.

Assets

The couple paid just over $1000 for the cow. They use sterilized buckets for milking and sterilized jars for bottling the milk. They don't have any specialized equipment, and they have no plans for significant expansion. They are fortunate to live on a farm with lots of outbuildings for hay storage, refrigeration space, a commercial kitchen and a market building, so their initial investment has been minimal.

Why this business works:

The owners of the land where Don and Lucy operate felt that "their farm was begging for community", and so they invited Don and Lucy, along with a host of apprentices to help enrich the farm with their energy and labour. The farm already had a busy farm stand that had been thoughtfully stocked and maintained, so that it was a popular stop for the neighbours. Their milk adds a popular draw to the stand that contributes to the farm.

The scale is also a factor in the success because it's small enough to operate under the radar, and to compliment an existing farm with all the facilities to support it. It is a delicate balance to maintain, especially with the legal pressure. However, because it is an operation with integrity and good intention, it is a cause for celebration.

written by Robin Tunnicliffe, edited by Barbara Joughin

Last Modified: October 10, 2014