Milking Profit
by Nick Levendofsky, KFU Executive Director
If I’ve learned anything in life, it’s that there is never a truly perfect time to visit a dairy farm, but the day I chose to visit and interview Jason Schmidt at Grazing Plains Farm might have been the most imperfect. That was the day he was trying to do his farm taxes and ran into issues with the tax software and ended up on-hold most of the morning.
Luckily, Jason had an intern who was handling milking that day, so he had time to get things resolved, which gave me plenty of time to walk around the farm and take in the beautiful, springlike weather. The Schmidts have a flock of sheep penned up near the house, so I went over and made a friend in a chubby, little lamb, who then found a gap in the fence and decided to join me on my walk. After getting the lamb back in, I made my way up to the dairy barn where chickens were pecking and strutting, the farm dog was looking for belly scratches, and barn cats kept multiplying before my eyes. The cows were out in the pasture just northeast of the barn, awaiting the next milking later that afternoon.
Jason was able to resolve his tax software issue and he and Miriam Goertzen-Regier joined me in the granary that now doubles as a picnic spot, complete with tables, a propane heater, and a mini fridge stocked with beverages. The walls of the granary are adorned with old metal signs, tools, and car tags from long gone farm vehicles. The constant clicking of an electric fencer ticked in the background. It’s the perfect place to relax after a hard day’s work, or in this case, talk about the farm, cheesemaking, and dairy policy.
Jason Schmidt’s Ukrainian Mennonite ancestors settled this land in the 1870s. His great-grandparents purchased the family farm he resides on from an aunt and uncle back in the 1890s. His grandparents started their Grade B dairy here in 1937 and farmed until the 1970s when his parents established their Grade A dairy in 1976. Since 2011, Jason and his family have been the fifth generation to farm this land.
After high school, Jason didn’t think he would come back to the farm. “I had itchy feet and liked to travel overseas, so I got a degree in international development and did apprenticeships and internships through various volunteer programs after college,” he said. “That’s when I realized how much I loved farming.” Slowly, through graduate school while studying grazing management, he learned a way of farming that was different from his parents’ through apprenticing with grassfed ranchers in Colorado, along with alternative sustainable agriculture ideas he gathered during that time. He came back to the farm in 2009 with those ideas while his wife Carol was in law school at Washburn University. Jason started working for the Kansas Rural Center and got more connected to the sustainable agriculture and grazing world in Kansas.
During those years in Topeka, Jason traveled to the farm weekly, helping his parents, renting ground, and slowly getting his foot in the door. His parents worked out a transition plan where he would buy out the dairy over five years. In 2011, Jason and Carol rented a house, and after the buyout, his parents moved across the road. Jason’s father took over the crop farming in “retirement” and Jason took over the dairying and grazing. “I came back, always with the dream of transitioning the dairy to more managed grazing,” he said. “I always managed a good portion of the farm semi-organically, but still use some herbicides on the crop and antibiotics on the cows. My goal has always been to move toward 100% grazing, organic, and renewable energy on the farm,” he said. To that note, the Schmidts installed solar panels in 2016 that power both the house and the farm, which covers about 50% of their electric usage.
Schmidt is currently milking 70-75 head of crossbred Jerseys. He crossbred his parents’ Holsteins with Jersey over the last 10 years, mainly because he wanted to do something different. “Holsteins require lots of inputs to pump out all that milk. I wanted to go with a lower input system and more aggressive grazer that was more efficient and held up on pasture,” he said. He adds that he’s always known the commodity milk market is a dying marketplace for the small dairy, hence the dream for a direct marketing component. Twice a year, Schmidt reaches out to all the organic dairy cooperatives in the U.S., but no one seems interested in picking up his milk. He currently sells his to Dairy Farmers of America (DFA), the largest dairy cooperative in the U.S., and the only marketing option for most of the dairies in the state.
The direct marketing component of Grazing Plains Farm started as a conversation among friends Miriam and Ryan Goertzen-Regier in 2013 and the topic kept coming up over time. Miriam handles the cheesemaking at Grazing Plains Farm and says the food science side of cheesemaking was always interesting to her. She had been helping a local grocery store develop recipes for pepper nuts and was ready to move on to something else. In the summer of 2018, Ryan and Jason were at a Farm and Food Council meeting where the idea of cheesemaking came up again. Miriam was looking for a transition point to an opportunity to be involved in something that would provide food within her community. “I was making cookies, but you can only feel good about making cookies for so long,” she said. “Then people start telling you, ‘Your cookies are addictive!,’ which I think is a compliment, but what am I doing for the health of my community?” That fall, she started coming to the farm to pick up a few gallons of milk at a time, sterilizing the kitchen, and working on recipes.
“It was like pulling teeth getting everything lined up,” Miriam noted. “We weren’t quite ready to build on-farm yet, so we rented a space in town.” Jason added, “We had a couple ‘false starts’ at first but overcame the challenges.” Now, everything is done on-farm. “I was amazed we were able to pull it off on a shoestring budget and get licensed,” Schmidt said. “There were logistical challenges. The first six months were difficult. There were things we’d never done before and never will do again – starting from scratch and jumping through hoops.” Schmidt adds that there are raw milk dairies that never do get licensed, and he sometimes thinks that would be a nice alternative, but wholesale markets are about 70% of total sales, and they just couldn’t do that as a raw milk dairy.
Those wholesale accounts are delivered on a regular basis and marketing is constant. The holidays (November-December) are the higher retail months and January-February are slow for most retailers. At the time I was visiting the farm (early February) Jason noted that it was time to make a push for new retailers and markets. “We had two restaurants in Wichita buying 50% of everything we produced, then they hit a financial and managerial bump, so we had to reconfigure.”
Schmidt and Goertzen-Regier use about 10% of the milk for cheese, and they know they need to expand, but they also want to know it will work. There is a strong desire to get out of the commodity milk market, and it’s their hope that cheese will provide an off-ramp to commodity sales. “The problem is, we’re just doing good to break even with cheese as well,” Schmidt said. “Especially once inflation hit, we’re probably losing less money on the commodity side ve