professional dairy managers of pa annual members meeting

November Issues Forum

Professional Dairy Managers of PA Annual

Members Meeting


Kurtland Farms“Our Top 10 Milestones”Tim Kurtz

Kurtland Farms


2006 – Profit Team Start

CDE Initiative 125 Cows Prompted by Frustration Need for Outside Resources

and Guidance Quality of Life Important!


2007 – Developed 3-Year Strategy

Dairy Alliance Initiative Five-week Hands-on Workshop SWOT Analysis Need for Business Plan Benchmarking Cost of Production


Needed Answers

What is the long-termviability of dairying in this community?

What is the long-term profitability of current facilities?

What are the bottlenecks & limiting factors? Is there enough land? What are other options for the farm?


Immediate Action Steps

Short Term: Ventilation, Sexed Semen, 3X milking,

Written SOPs, Amino Acid ration balancing, Shot program

Long Term: Becoming involved in dairy

industry organizations Vital to gain additional

perspective


2009 – Began Expansion Exploration

Involved Lending Institution,Engineering Consultant, & Construction Company

Environmental grant availability??? Building site was obvious Extremely tight budget Grants seemed only hope Had to be permitted but not guaranteed


2010 – Denied Waiver

Required Land Development Plan Added Considerable Cost Lesson learned: Need highest

level of experience on team Jeff Ainslie consulted Started 2-year process of designing economically

viable facility Numerous trade shows, workshops, phone calls,

emails and consultations


2011 – Transformation Team Start

Focused on challenges Assisted with engineering &

permitting costs Penn State Extension Feasibility &

Cash Flow Analysis Brought clarity and credibility Brought new level of energy


2011 – Operation of Satellite

Adjoining Dairy Opportunity for additional cows and feed availability Employees stayed with operation Allowed for more specialized employee

responsibilities

Allowed Us to Keep Replacements & Streamline Labor Force

Within 3 Months of 3X Milking, Added 15 # Per Cow Per Day

2011: Began Relationship With Different Construction Company

May 2012: Manure Storage

& Processing Grant Approved!


June 2012 – Began Relationship With New Bank

Financing MostChallenging Part of Project

Always Kept Open Lines of Communication Explored All Options

September 2012: Began

Construction

Best possible environment


Is It Worth the Investment?


Item Cost

Expansion/Construction Cost:

-- Soft Costs (Engineering, Permitting, Environmental)

$50,000

-- Barn & Milking Equipment Costs $2,070,000

-- Miscellaneous Costs $40,000

Subtotal $2,160,000

Environmental/Manure Grants $866,653

Grand Total $3,026,653

220 Cow Robotic Free Stall Barn, Manure Storage & Processing -- Start

Up: 3/18/13 Goal: 7.8 million lbs. of milk per yr

Does Not Include

Cattle Or Start-Up

Costs


Robotic Milking: A Natural Fit

Voluntary milking gives cow more flexibility and lowers stress

Labor skills even more important

Enhances positive consumer attitudes


Composted Manure Solids

• Manure recycled via press separator and compost drum

• Clean, comfortable stalls are deep bedded

• Environmentally responsible• Additional revenue stream


Precision Advantages

• Accuracy of information• Detection of abnormalities• Analyzable data• Production Efficiencies


Too Much Information?

• Need to decide what information is needed, when it is needed and where to find it• Monitor on a broader level • Investigate attentions in

more detail

Cows have averaged 85 pounds per day for past six months

in robotic barn.


Healthy Cows=ProfitTeamwork=Success

• Many skill sets needed.

• Appeals to next generation

• Mission statement values: Profitability, Quality of life, Stewardship, Having Fun, Honor God


Future?

• 100% robotic • Transition to next

generation of ownership

PATIENCE, PERSERVERENCE, PERSISTENCE!


Jeff AinslieTransformation Team Member

Site Planning / Permitting / Engineering


Kurtland Farms - Take Homes

Lenders talk about the 3 (or now more) C’s of credit

In the quest to construct a new dairy facility, we should be talking about the Four P’s:

1)PLANNING2)PATIENCE3)PERSEVERANCE4)PERMITTING


PLANNING

No offense to the builders -- but the details of the barn can wait until a landowner knows what he or she can do where on their property.


PATIENCE 7/15/10 Timeline Discussed @ Kurtland

July August September October November December January February March April May Oct

NMP DONE

EQIP application DONE - BE SURE EXTENDED

CDE planning grant DONE

CDE Digester Grant App DONE - OTHERS?

CDE Digester Grant Dec ***

Construction Budget Update?

Feasibility update ************************

Stormwater Plan (Twp)

Site Specific Storage Design

E+S Plans

Water Quality Part II

Credit Ownership Determination

PENNVEST Application *****

PENNVEST Determination******

OR

Wetlands +/or Nutrient Credit Proposal to DEP *****

DEP Determination*****

Construction (?)

Milking Date (GOAL) XX

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FY 2010 FY 2011KURTLAND FARM - ROBOTIC DAIRY COMPLEX


PERSEVERANCE

PENNVEST: 4th try was a charm! Caernarvon Sewer Authority /

Lancaster CD / others…. Berks Conservations District came

through

PERMITTING It is involved…and likely to get more so… It is complicated…and likely to get more

so… It is different for every project at every

location... It is costly in more ways than one….


Kurtland Farms - Take Homes

PLANNING Headlock dimensions can wait – confirm what

you can do on your property, and what regulations will apply to you

PATIENCE “My excavator is ready….we’re starting in a

month” – unfortunately, you are probably not… PERSEVERANCE

Stick with it and work with people that will help you get there

PERMITTING It’s a reality – but take the time early on to

learn what rules and regulations actually impact you and your project


Fulton Bank PerspectiveFrom Lamar King


Agricultural Lending in 2013

Communicate with Your Lender Prepare/Budget/Understand Your

Financials 5 Cs of Credit

Capacity (Cash Flow) Capital Character Conditions Collateral

professional dairy managers of pa annual members meeting

Documents

construction slide

options slide

day slide

additional perspective

new level of energy

robotic milking

x milking

barn milking equipment