Expansion-minded dairy producers find plenty of reasons to turn forage harvesting chores over to custom operators. Yet custom operators shouldn't assume they — or their competition — will have that business forever, says Dick Kraus.
“Some dairy producers try working with a custom harvester for awhile and then go back to doing the work themselves,” notes Kraus, an Elkhart Lake, WI, custom operator and former president of the Wisconsin Custom Operators Association. “Reasons vary with individual farmers.”
Sometimes, as dairies grow, Kraus says, producers have additional capital and labor available for a harvesting enterprise. In other cases, they might determine that there are tax advantages to owning their own equipment or that they can get a deal on good, used forage harvesting equipment. And sometimes, they're simply not satisfied with the service provided by a custom operator.
“Some of these dairy producers may eventually decide to return to using services provided by a custom operator,” Kraus says. “But others may never return.”
Several dairy producers who decided to bring forage harvesting back in-house say they wanted to regain control over forage quality. One 800-cow Midwestern dairyman says he was generally satisfied with his custom operator's track record for showing up when scheduled.
“But that's not the same thing as having them here at the best time for harvesting the crop,” explains the producer, who went back to harvesting his own forage two years ago. “A lot of times, they'd show up, cut our haylage and then go to another nearby farm to finish chopping. Then, because they had equipment in our area, they would want to come back here to chop right away.
“Several times, they chopped when it was too wet and we ended up with high butyric acid levels in our feed. We figure just a 6" layer of stringy, smelly material in a 12'-high bunker can easily cost you 3 or 4 lbs of milk per cow per day.”
One custom operator “didn't fully understand” the relationship between timely harvesting and top-notch rations, says the New York producer who'd hired him for three years.
“We're extremely picky about our feed and the consistency we wanted just wasn't there,” adds the dairyman, who eventually bought a full line of harvesting equipment. He now milks 1,000 cows. “We ended up with a lot of corn silage that was put up too dry, and a lot of haylage that was put up too wet.”
Jon Orr, of Orrson Custom Farming, Ltd., Apple Creek, OH, strives to become familiar with each customer's feeding program. When possible, he includes a customer's nutritionist in meetings.
“The nutritionist drives a lot of the decision-making on many dairies,” Orr points out. “If you deliver a product that doesn't meet the nutritionist's standards, you can make his job very difficult for the next 12 months.
“If that happens, he'll talk to other nutritionists and other farmers in the area. That will hurt your reputation. On the other hand, if you develop a good relationship with nutritionists, they can be very valuable allies.”
Cost is also a reason dairymen go back to harvesting their own. A Wisconsin producer's custom harvester increased rates twice, by roughly 5% each time, over the six years they worked together. When a nearby, similar-sized dairy suggested an equipment-sharing agreement, the dairyman went for it.
“It wasn't a matter of not being happy with the rates or the increases,” he says. “Custom operators have to make a living, and they have to adjust rates as their costs rise. But as we increased our acres, the total harvesting bill became something we had to take a closer look at.”
The New York producer also cites price as a reason. “At first we didn't really think rates were that big of a factor,” he says. “But then milk prices nose-dived, and the total cost became a much bigger issue.”
Setting rates can be tough, says custom operator Larry Krepline, Reedsville, WI. He works with a farm business management advisor at a local technical school to track operating costs, then sets rates based on their findings. During winter, he also gathers rate information from other custom operators working in his area.
“We don't try to undercut anybody on rates,” says Krepline. “We just want to make sure we're staying competitive.”
Frequent equipment breakdowns eventually became too much of a frustration for one Wisconsin dairyman. He stopped using his custom operator after three years.
“We would run our equipment side by side and it seemed like their equipment broke down a lot more often than ours,” says the producer, who currently milks 2,000 cows. “We weren't directly billed for the time their equipment wasn't running. But we still had our people in trucks and on the packing tractor, just sitting around. That was money out of our pocket.”
Another Wisconsin producer says working with poorly trained or supervised harvesting crews helped shape his decision to harvest his own crops again.
“They had a lot of part-time employees, and we got the feeling that they didn't really care about doing quality work.”
In one memorable episode, a truck rolled over in a bunker silo.
“He backed up too far into the pile and the load shifted,” says the former client. “Safety was the big concern, of course. But we also had to stop chopping for about three hours while we brought in a wrecker to get the truck out.”
Matt Bakke, E&M Ag Service, Inc., Tulare, CA, says he frequently reminds employees that they're representing his business.
“I absolutely hate getting a phone call from a dairy farmer who's upset about one of my truckers driving down his lane or driveway too fast,” says Bakke. “When it happens, I get on that person (employee) right away. If I feel like I'm not getting through to him, I'll send him home for the day without pay.”
One dairy producer pointed out that the least experienced employees always seemed to be assigned to the packing tractor.
“They seemed to think their job was just to get up on the pile and push things around,” he says. “We'd show them how we wanted things done. Just when we thought we had them trained, there would be a shift change and we'd have to start all over again.”
Orr believes custom operators often underestimate the importance of top-notch packing.
“We make it a point to put our very best employee in the packing tractor,” he says. “It's that important. We can do a great job of chopping and kernel processing. But if the person doing the packing messes up, feed quality — the thing the dairy producer is most concerned about — suffers. All the other great work we did won't mean a thing to that customer.”