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 versus the cheese side, but the cheese side gives me more satisfaction than sending milk down the road,” he adds.

One way Schmidt markets his farm and cheese is through social media – Instagram, to be exact. “Like everything, I could do such a better job of utilizing it (social media),” Schmidt notes. “I’ve seen others do well with social media building their business. I know there are strategies like ‘post this on this day, post that on that day,’ have a strategic plan, etc. I’ve always just used it as my personal, fun place.” He notes that during the holidays, Facebook and Instagram posts helped drive sales. He estimates 2/3 of the followers are people he doesn’t even know. “It is and has been a very helpful tool for retails sales and for people finding the farm as well,” he adds. “People want to hear and buy into the story of the farm and the cheese.”

Jason and Miriam have looked at other dairies doing similar things, but those farms are struggling, too, and only make money from agritourism. “The cheese creamery size I dream of growing to and the cheese creamery that’s producing cheese that’s three times more in value than mine is barely breaking even,” Schmidt said. “Am I chasing the economic model that’s just as bad or worse than commodity milk? That really knocked the wind out of my sails.”

Schmidt has reason to be concerned about the future of small dairies in the U.S. According to a January 31 article from The Guardian, two decades of misguided U.S. dairy policies centered around boosting milk production and export markets have hurt family-scale farms and the environment while enriching agribusinesses and corporate lobbyists. The average American dairy turned a profit only twice in the past two decades despite milk production rising by almost 40%, according to analysis by Food and Water Watch (FWW). Nationally, the total number of US dairy farms fell by more than half between 1997 and 2017, while the average number of cows per farm increased by 139%, according to analysis of USDA data. More than 70% of US milk is produced on farms with at least 500 cows, with the largest dairies boasting herds of more than 25,000.

The late celebrity chef and author Anthony Bourdain once said, “You have to be a romantic to invest yourself, your money, and your time in cheese.” “Romantic” is likely not the word that comes to mind when one sets foot in Grazing Plains Farms’ farm store and creamery and looks over the equipment and available cheeses, but it works for their operation and clientele. Current available cheeses include cheddar in various forms, Havarti with dill and with caraway at Christmas, Elbing, cow’s milk feta cheese, and fromage blanc – a soft, tangy, spreadable cheese – either at the farm store, numerous shops, or online at their website.

Tilsit was an early cheese that was popular with locals but production had to stop because of aging challenges. It came from an encounter Goertzen-Regier had with a professor at Bethel College who recommended its production. According to the professor, Tilsit was developed by Mennonites in Prussia in the 1700s, and Goertzen-Regier was able to find a recipe online from a YouTuber in Australia. Most recipes come from a book, and she adapts them for the region and equipment. She notes, “I look for something that works well with our equipment and fits the tastebuds of south-central Kansas. I think about what people want like mozzarella and cheeses that are harder or aged a little longer, like for the winery down the road.”

“A goal of ours would be to have a complement of cheeses that we can sell for a lot and some that are more economical, cheeses that yield a lot and some that don’t, cheeses that take more labor to offset those that are easier to make,” said Schmidt. “We had initially hoped to steer away from cheeses you can go to the store and buy, but there is a market for it. I didn’t want to just be another ‘cheddar creamery,’ but that’s what people like, and that what my kids eat,” he adds. “Our very limited infrastructure doesn’t allow us to do really fancy cheeses. It would be fun to do a Swiss cheese or brie, but we don’t have the aging environment for that.”

As far as solutions to the challenges facing family dairy farmers, Schmidt notes, “It’s way too easy to simplify it down to one or two things. Global forces, economic realities, lobbying efforts from agribusiness, monopolies, and price fixing. It’s a real mess,” he notes. “In a dream world, there would be production quotes, floor prices, and a meaningful safety net for small farmers. Dairy Margin Coverage (DMC) vastly improved in 2021, but in 2022, there was very little money made and inflation caused many problems. The U.S. dairy industry hates Canada’s system, but Canada is protecting their small dairy farmers. We are not. It’s overproduction and they call it market capitalism, and to me, that’s B.S.”

Two years ago, Schmidt pushed DFA to do a special order that would look into ways to support small dairy farms by helping support specialty niche markets. DFA pushed back and said, “We have to treat everyone the same.” The problem is, they aren’t. “They are building massive dairy plants in western Kansas on top of finite resources like the Ogallala Aquifer, supporting that infrastructure while doing nothing for the little guy,” Schmidt said.

Climate change is also top of mind for Schmidt. He is constantly dreaming and experimenting with practices like continuous cover, no-tillage, etc. “There are lots of failures,” he notes, “but the cows graze the failures.” Schmidt didn’t use any nitrogen fertilizer last year and did lots of interplanting crops into thinning alfalfa stands for nitrogen. “I’m always experimenting,” Schmidt says, “I just wish I was rewarded for experimenting and rewarded for attempting to store more carbon and create more resilience. There are plenty of people who talk the talk, but it’s hard to walk the walk.”

To learn more about Grazing Plains Farm and to purchase cheese, go to www.grazingplains.com or stop by the farm outside of Newton. All sales at the on-farm store are on the honor system, just keep in mind that they’re open dawn to dusk Monday-Saturday and by appointment only on Sundays.