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Jennifer Taylor, UW-Madison Center for Integrated Agricultural Systems

Jeremy Foltz, UW-Madison Program on Agricultural Technology Studies

University of Wisconsin-MadisonJanuary, 2006

Pasture use in theWisconsin dairy industry, 1993-2003

This report was funded in part by grants to CIAS from USDA-CSREES and the Wisconsin

Milk Marketing Board and was published following a joint effort between two UW-Madisonorganizations:

The Center for Integrated Agricultural Systems (CIAS) is a research center for

sustainable agriculture in the College of Agricultural and Life Sciences, University of

Wisconsin-Madison. CIAS fosters multidisciplinary inquiry and supports a range of research,curriculum, and program development projects. It brings together university faculty,

farmers, policy makers, and others to study relationships between farming practices, farm

profitability, the environment and rural vitality. Go to www.cias.wisc.edu or call

608.262.5200 for more information.

The Program on Agricultural Technology Studies (PATS) is an applied research andextension unit housed in the College of Agricultural and Life Sciences of the University of

Wisconsin-Madison and linked with Cooperative Extension Services. PATS is a joint

program of the Department of Agricultural and Applied Economics and the Department of

Rural Sociology. Go to www.pats.wisc.edu or call 608.265.2908 for more information.

Additional data was provided by:The Center for Dairy Profitability develops, coordinates, and conducts effective inter-

disciplinary educational and applied research programs emphasizing business management,

human resource management, production systems, finance and marketing systems that

enhance dairy profitability. Go to www.cdp.wisc.edu or call 608.263.5665 for more

information.

The Wisconsin Agricultural Statistics Service (WASS) is a cooperative function of the

Wisconsin Department of Agr iculture, Trade and Consumer Protection and the U.S.

Department of Agriculture National Agricultural Statistics Service. WASS provides quantita-

tive data on crop, livestock and dairy production in Wisconsin. Go to www.nass.usda.gov/

wi/ or call 800.789.9277 for more information.

Publication design and layout by Ruth McNair, CIAS.This report is printed on recycled paper.

Photo credits:pages i, ii, iii, 1, 14,15 —Paul Daigle, Marathon/Lincoln County Grazing Projectcover, pages 2, 7, 16—Ruth McNair, CIASMap credit:Larry Cutforth, Madison, WI

TTTTTable of contentsable of contentsable of contentsable of contentsable of contents

Executive summary.............................................................................i

Introduction.......................................................................................1

Grazing definitions—What is managed grazing?........................................2

Scope of grazing—Farm numbers, cows and milk production .......................3

Financial performance—Is managed grazing profitable?.............................7

Satisfaction—Are graziers happy with their lifestyles?..................................9

What grazing looks like—Characteristics of farms and farmers....................11

Implications ......................................................................................15

Appendix A .......................................................................................17

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Executive summaryExecutive summaryExecutive summaryExecutive summaryExecutive summary

Managed grazing is a business model that can be usedas part of a sound strategy to provide a steady milksupply for Wisconsin. As farm numbers continue todecline and herd sizes grow in an effort to maintainthe state’s milk production and processing sector, itbecomes increasingly important to know whatfactors contribute to successful dairy enterprises. Asrecently reported in Pastures of Plenty (Kriegl andMcNair, 2005), a decade of study has shown thatmanaged grazing farms have been consistentlyprofitable. What do these farms look like? Are theysimilar to or different from other types of Wisconsindairy farms?

This report summarizes statewide information aboutWisconsin dairy producers who use pasture andmanaged grazing as feeding and farm managementtools. By placing their farm operations in context, itwill become possible to envision how grazingenterprises can contribute significantly to the healthof the dairy industry and rural communities. Notethat environmental impacts are not discussed in thisdocument as research addressing grazing-relatedenvironmental issues such as nutrient management,water quality and species diversity is ongoing andwarrants a separate report.

While managed grazing is sometimes perceived asoutside of mainstream agriculture in Wisconsin,graziers are more similar to other dairyfarmers than they are different. In terms ofage, farming background, household income, off-farm work and technology use, dairy farmers usingmanaged grazing are, on average, not strikinglydifferent from many farmers who operate moretraditional dairy and cropping systems.

Data collected by the UW Program on AgriculturalTechnology Studies (PATS) from 1993 to 2003 (seeAppendix A) shows that farm size, rather than othercharacteristics, is the primary difference betweengraziers and non-graziers in Wisconsin. The othermajor findings are that graziers earn similarhousehold incomes with half the number ofcows, have less debt, and are more satisfiedwith their overall quality of life than othertypes of dairy farmers.

In sum, Wisconsin graziers are equally or moreprofitable than other dairy farmers in the state.Farmers succeeding with managed grazing usually doso with moderate herd and farm sizes, little hiredhelp and only slightly more off-farm employmentthan non-graziers. A typical grazing farm is a smallbusiness operation run by a single farm family.Wisconsin also has a variety of support mechanismsin place to assist beginning farmers and farmerstransitioning to grazing.

Thus, discussion of stabilizing and possibly increasingmilk production, stemming the decline of farmnumbers and preserving working lands in Wisconsinshould include a managed grazing dairy enterprisemodel.

DefinitionsFor this report, Wisconsin dairy farmers are dividedinto three categories based on feeding management.

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The following definitions are fully explained in themain text on page 2 and presented here in brief:

Management intensive grazing (MIG), ormanaged grazing, is a system in which dairyfarmers rely on pasture as the primary source offorages for their milk cows during the grazing monthsand move these cows to fresh pastures at least once aweek. The farmers who practice it are graziers.

Conversely, stored feed dairy farm operations donot rely on pasture for any part of the forage rationfor their milk cows. Mixed feed refers to dairyfarm operations that feed primarily stored feed, butobtain part of the forage ration for their milk cowsfrom pasture. These farmers rotate their cows tofresh pasture less than once a week. The managedgrazing and mixed feed categories togetherwill be referred to as farms that use pasture.

Grazing dairy farmsManaged grazing is an important and dynamic part ofthe Wisconsin dairy industry. Managed grazingwas practiced on about 23 percent ofWisconsin dairy farms, or about 3,900operations, as of 2003. Another 21 percent ofdairy farms were mixed feed operations, bringing thenumber of dairy farms using pasture in the state to anestimated 7,416 farms. While the total number ofdairy operations dropped steadily from about 30,000in 1993 to 16,900 in 2003, the number of dairyfarms using managed grazing increased rapidly in theearly 1990s and remained a consistent 22 to 23percent of the total from 1999 to 2003 (Fig. 1,page 3).

In 2002, managed grazing farms were aboutthe same acreage as mixed feed operations,but stored feed operations averaged 150acres more per farm. From 1993 to 2002, theaverage size of managed grazing and mixed feedfarms decreased slightly to 245 and 277 acresoperated per farm, respectively. During the same

time, the average size of stored feed operationsincreased by about 75 acres per farm, from 350acres to 426 acres (Fig. 8, page 11). Farms usingpasture were most numerous in the South West, WestCentral, North Central and North West CropReporting Districts, where between 46 and 68percent of dairy farms used pasture for their milkcows (Fig. 2, page 4). Graziers made up 30 to 37percent of the dairy farmers in the South West, WestCentral and North Central Districts, which are thesame regions where managed grazing has been usedthe most in Wisconsin since the early 1990s.

Milk cows on pastureFarms using pasture devoted an average of 35 acresof pasture per farm for milk cows, with managedgrazing operations using more than mixed feedoperations. In sum, approximately 136,000 acres ofpasture were used by dairy graziers and another122,500 acres of pasture were used on mixed feedoperations in Wisconsin in 2002. These are roughtotals, and likely underestimate the actual acreage asfew large grazing operations were surveyed.

In 2002, 26 percent of Wisconsin’s 1,265,000dairy cows used pasture as part of their feedration. About half of these cows were fed usingmanaged grazing. Consistent with having the mostfarms using pasture, the South West District also hadthe most dairy cows using pasture—50 percent. TheNorth Central, the West Central and the North West

Districts followed with 44, 33 and 28 percent ofdairy cows, respectively, obtaining forage frompasture (Fig. 3, page 5). These four districts also hadmore dairy cows on managed grazing farms than theother five districts in Wisconsin.

Wisconsin graziers had the same number ofcows as mixed feed farm operators, but fewerthan half as many cows as stored feedoperators. The average herd size on a managedgrazing farm in 2002 was 48 cows, up about 7 cowsper herd from 1993. The herd size on mixed feedfarms remained fairly steady during the decade andaveraged 49 cows in 2002. Meanwhile, stored feedoperations trended toward larger herd sizes, growingfrom an average of 58 cows per herd in 1993 to 108cows per herd in 2002 (Fig. 9, page 11). This averagewas pushed up by the relatively small number oflarger herds. Seventy percent of stored feedoperations in Wisconsin in 2002 remained at fewerthan 100 cows (Fig. 10, page 12).

Farmer characteristicsFarmers who practiced managed grazingwere similar to other dairy farmers in termsof age, farm background and years offarming experience. On average, the primaryoperator of a Wisconsin dairy farm was 48 years old,grew up on a farm and had 21 years of experiencemanaging the farm he or she currently operates.Graziers as a whole were not significantly different inthese respects; they were slightly less likely to comefrom a farm background and the most intensivegraziers were, on average, two years younger thanother dairy farmers.

Technology and laborTechnology use by graziers was appropriateto their management systems. Graziers werenearly as likely as stored feed farmers with similarlysized operations to use farm production records andmilking parlors, both of which can improve laborefficiency and herd management. Graziers were the

least likely to use rBST or TMR machinery,consistent with their smaller herds and use of pastureas the primary forage during the grazing season.

Graziers and mixed feed farmers were lesslikely than stored feed farmers to hire non-family labor. About 9 percent of graziers and 18percent of mixed feed farmers hired regular non-family employees compared with 33 percent ofstored feed farmers. Farms with 200 or more cowsaccounted for most of the paid employees, averagingsix per farm. On dairy enterprises with under 100cows, less than one full-time equivalent employeewas hired for the year.

Production and performanceAbout 23 percent of the state’s milkproduction in 2002 is estimated to have comefrom cows on pasture. Eleven percent was frommanaged grazing operations and 12 percent was frommixed feed farms. Milk production per cow ongrazing farms was usually lower than on other typesof dairy operations. For 2002, graziers reported anaverage of 17,500 pounds per cow annuallycompared to 18,200 pounds per cow reported bymixed feed farms and 20,700 by stored feed farms.However, graziers’ average cost of production waslower, yielding more profit per cow and perhundredweight of milk than other types of dairyfarmers.

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In terms of financial performance, graziersreported total family income for 2002 in thesame range as stored feed and mixed feedfarm households. On average, Wisconsin dairyfarm households of all types reported incomes in therange of $35,000-$49,000. This included the family’sshare of net farm income as well as off-farm wagesand any income from other sources. Thus, graziersearned average family incomes similar tothat of stored feed operations with less thanhalf as many cows.

Wisconsin dairy farmers earned 80 to 88percent of their household income fromfarming. On average, graziers received only five toeight percent more of their household income fromnon-farm sources than other dairy farmers. Amongall types of dairy farm families, steady off-farm work,usually by the spouse of the primary farm operator,contributed an average of 11 to 14 percent ofhousehold income. Dairy farm families worked offfarm mainly for health insurance coverage, to offsetlow milk prices and to supplement farm income.

Another indicator of financial performance was thedebt load carried on dairy farms. Twenty-seven

percent of graziers reported no farm debt asof January 1, 2003, up from 22 percent in1993. About 20 percent of stored feed farmers wereout of debt, the same as ten years prior. Twenty-fourpercent of graziers carried debt loads of under 10percent of the total value of their farm assets,compared with 19 percent of mixed feed and 18percent of stored feed operators (Fig. 5, page 8).Overall, graziers reduced their debt loads during thedecade, with 15 percent fewer graziers in 2003having debt over 40 percent of the total value of theirfarm assets.

Satisfaction and outlookMany factors contribute to a family’s decision tofarm, including how farming fits with their lifestyleand goals, the skills and background of the operatorsand many other qualitative assessments. In 2003,about two-thirds of dairy farmers reported beingmoderately satisfied with their quality of life, while21 percent of farmers were dissatisfied. Stored feedoperators were more likely to be ‘very dissatisfied’than graziers. Conversely, graziers were morelikely to report being ‘very satisfied’ thanother dairy farmers, with 15 percent of thegraziers being ‘very satisfied’ (Fig. 6, page 9).

acres operated 245 277 426number of milk cows 48 49 108

milk production (lbs./cow/year) 17,500 18,200 20,700

age of operator (years) 48 47 49operator farm background (% yes) 85 90 91

operator experience (years) 20 20 22

hire regular help (% of farms) 9 18 33household income range (annual) $35,000- $35,000- $35,000-

$49,000 $49,000 $49,000no farm debt (% of farms) 27 28 20

Snapshot of Wisconsin Dairy Farms, January 2003(Averages* in each category; actual farms vary)

Managed grazing Mixed feed Stored feed

*the average refers to the arithmetical mean

When asked how their quality of life changed overthe previous five years, only about a quarter of dairyfarmers reported it had gotten better, while 31percent said it had gotten worse. The survey wasdistributed in 2003 following particularly low milkprices in 2002 and 2000. Graziers, especially themost intensive, were the least likely to say that theirquality of life had gotten worse. No matter what theirfarm management style, dairy farmers were lesssatisfied overall than in past years. Eighty-threepercent of dairy farmers said that they were ‘verydissatisfied’ with the price they received for milk and60 percent were ‘very dissatisfied’ with their netfarm income.

About a third of dairy farmers expected to befarming for four to ten more years and some wereoptimistic enough to say they would continuefarming indefinitely. Graziers were more likely thanstored feed operators to indicate they could farmindefinitely. Yet among all dairy farmers polled,41 percent said they planned to discontinuedairying in three years or less.

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Wisconsin dairy grazing at a glance (2002)

• Forty-four percent of dairy farmers feed pasture to milk cows.

• Managed grazing is practiced on 23 percent of dairy farms.

• Twenty-six percent of the state’s 1,265,000 dairy cows use pasture as part of their feed ration.

• Twenty-three percent of the state’s milk production comes from cows on pasture, with 11percent from farms using managed grazing.

• Milk cows use at least 258,500 acres of pasture.

• In the South West Crop Reporting District, 68 percent of dairy farms and 50 percent of milkcows use pasture.

• Eighty percent of the household income of graziers comes from farming.

• Graziers are more likely to report being ‘very satisfied’ with their lifestyle than other dairyfarmers.

While the number of retirees may differ from thisprojection, a dramatic decline in farm and farmernumbers may be coming. One concern is that if themilk supply drops, the Wisconsin dairy processingindustry—already operating at about fifteen percentless than full capacity—may decline. This would leadto the loss of dairy processors, jobs and supportinginfrastructure.

Wisconsin dairy farmers have a strong record ofenvironmental stewardship, active participation intheir communities and growing interest in value-added products. It is clear that the $21 billion dairyindustry plays a vital role in the well-being of thestate. As farmers of all management types struggle tomaintain their viability, business, policy, educationaland research sectors need to cooperate in thedevelopment and promotion of profitable andsustainable dairying systems. Managed grazing is onepath to strengthening Wisconsin’s dairy sector.

Management intensive rotational grazing, MIG, grass-based or pasture-based farming … by whatever nameyou call it, managed grazing has spread throughoutthe state and is now an established practice on manyWisconsin dairy farms. There are grazing networks,equipment suppliers, researchers and consultantsacross Wisconsin who provide information andinfrastructure for grazing operations of all sizes andtypes. However, questionsand misconceptions aboutgrazing remain. Doesmanaged grazing pay as wellas conventional dairying?Aren’t graziers a verydifferent population fromother dairy farmers? Whatabout milk productionfrom pasture—it’s only adrop in the bulk tank ofWisconsin’s total milksupply, right?

These questions and morewere addressed byexamining ten years ofsurvey data from theProgram on AgriculturalTechnology Studies (PATS)at the University ofWisconsin–Madison (seeAppendix A). In contrast tothe conventional wisdomabout graziers, the use ofhigh quality pastures as afeeding and managementtool in Wisconsin is notlimited to a few atypicalfarmers.

Nearly one-fourth of Wisconsin’s milkproduction comes from farm families usingpasture. Their dairy farms are much liketheir neighbors’ farms of similar size, exceptthat they use pasture. And graziers makemore money per cow and have lessenterprise debt than other dairy farmers.Let’s take a closer look.

IntroductionIntroductionIntroductionIntroductionIntroduction

1

Management intensive grazing (MIG), ormanaged grazing, is a system in which dairyfarmers rely on pasture as the primary source offorages for their milk cows during the grazing monthsand move these cows to fresh pasture at least once aweek. The farmers who use this management systemare called graziers. Dairy cows, heifers, beef cowsor stockers, sheep, poultry and other animals can befed successfully using managed grazing. Werecommend that ‘managed grazing’ be used as theterm of choice and that the above definition beapplied consistently to dairy enterprises that use thissystem in future studies and publications.

On the opposite end of the spectrum, stored feedfarm operations do not use pasture for any part ofthe forage ration for their milk cows. These have mostoften been referred to as ‘confinement’ farms whencompared with grazing farms. The problem withusing the term confinement in this manner is that,

for the purposes of a managed grazing discussion, itrefers only to confinement feeding and not toconfinement housing. Housing practices often getfolded into discussions of confinement versus grazingapproaches; however, they are distinct from the feed-based definitions used to categorize farms in thisreport. Thus, stored feed refers to the exclusivefeeding of harvested feed and does not distinguishbetween housing practices, nor does it specify thatcows are always inside.

Mixed feed farms obtain part of the forage rationfor their milk cows from pasture, but mostly usestored feed. Graziers often supplement their cows’nutritional needs with varying amounts of storedconcentrates or additional forages such as cornsilage. Mixed feed farmers, however, rotate theircows to fresh pasture less than once a week andpasture is not the primary source of forages for theirmilk cows.1

Finally, we will talk aboutmixed feed and managedgrazing farms together asoperations that usepasture. For example,in order to estimate thetotal number of acres ofpasture used for milkcows on Wisconsin dairyfarms, we added theresponses of graziers andmixed feed farmers. Thisclassification is based onusing pasture for milkcows; any of these typesof dairy farms may usepasture for dry cows,heifers or steers.

Grazing definitions—What is managed grazing?Grazing definitions—What is managed grazing?Grazing definitions—What is managed grazing?Grazing definitions—What is managed grazing?Grazing definitions—What is managed grazing?

1 Previous publications from the Program on Agricultural Technology Studies refer to mixed feed farms as ‘non-intensivegrazing’ operations.

Scope of grazing—FScope of grazing—FScope of grazing—FScope of grazing—FScope of grazing—Farm numbers, cows and milk prarm numbers, cows and milk prarm numbers, cows and milk prarm numbers, cows and milk prarm numbers, cows and milk productionoductionoductionoductionoduction

2 Ostrom, M., and D. Jackson-Smith. 2000. The Use and Performance of Management Intensive Rotational Grazing Among WisconsinDairy Farms in the 1990s. UW-Madison PATS.3 Paul Daigle, Marathon County Conservation, Planning and Zoning Dept., and Brian Pillsbury, Natural ResourcesConservation Service. April, 2005. Personal communication.

Figure 1. Use of management intensive grazing on Wisconsindairy farms (1993-2003)

The 2003 Wisconsin Dairy Farm Poll (PATS) and2004 Wisconsin Dairy Producer Survey (WisconsinAgricultural Statistics Service, WASS) provide themost recent statewide statistics on dairy farms usingpasture in Wisconsin. Except where indicated, thedata in this report comes from PATS surveysbetween 1993 and 2003; the 2003 PATS surveycollected some data from 2002 and some from 2003.As only dairy farms were surveyed, the number offarms, animals and acres of pasture used by beef andother livestock operations are not included. Dairyfarmers’ use of pasture for heifers and steers also wasnot addressed. These topics will be presented infuture reports.

How many grazing dairy farms?During the 1990s, increasing numbers of Wisconsindairy farms used managed grazing, even as the total

number of dairy farms continued to decline. In theten years that have been surveyed, thenumber of management intensive grazingfarms increased from 7 to 23 percent of thedairy operations in the state (from 2,200operations to 3,900 operations) while the totalnumber of Wisconsin dairy farms dropped fromabout 30,000 in 1993 to 16,900 in 2003 (Fig. 1).

Since 1999, the percentage of graziers has heldsteady, possibly because enterprises using managedgrazing are not going out of business as fast as otherkinds of dairy farms. Previous survey work showedthat new dairy farm operators were more likely touse managed grazing than dairy farmers as a whole.2

Recently, the state added grazing specialists and puthundreds of farms into grazing management plans,indicating that farmer interest in using improved

pastures was strongthrough 2005.3

Mixed feed farmsaccounted for 21percent ofWisconsin dairyfarms in 2003,bringing the totalnumber of farmsusing pasture toapproximately7,400 or 44percent of allWisconsin dairyfarms. This is upfrom 37 percent in1993, showing thateven as dairy farms

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modernize and expand, the use of pasture for milkcows is important to an increasing number offarmers.

The Wisconsin Agricultural Statistics Service (WASS)reports that about 14 percent of Wisconsin dairyfarms used “intensively managed rotational grazing.”This lower figure is not directly comparable to thenumber of graziers identified by the PATS surveys.

Each percentage is an average for the entire districtand does not show county by county variation.

Figure 2. Percent of farms using pasture for milk cows byCrop Reporting District, 2002

The questions were phrased differently by eachorganization4 and managed grazing was not definedby WASS. Those who identified themselves as usingintensively managed rotational grazing in the WASSsurvey were likely a group of more intensive grazierssimilar to the 13.8 percent from the 2003 PATSsurvey who rotated their cows every four to six daysor more. When looking at grazing in general, therewas closer agreement between the organizations. In

1996, a WASS producer surveyshowed 48 percent of Wisconsindairy farmers had milk cowsgrazing some pasture, similar tothe 44 to 50 percent identified byPATS between 1995 and 2002.

Where are the 7,400 farms usingpasture located? Figure 2 showsthat in 2002, the South West CropReporting District (CRD) had thehighest percent of farms (68 %)with milk cows on pasture usingmanaged grazing or mixed feeding.Pasture use was also high in theWest Central (57%), NorthCentral (57%) and North West(46%) Districts. The portion offarms using managed grazing ishighest in three of these districtswith 30 to 37 percent of the dairyfarms in the South West, WestCentral and North Central regionsusing managed grazing.

4 WASS 2004 Dairy Producer survey asked: “Do you use intensively-managed rotational grazing?”; PATS 2003 Wisconsin

Dairy Farm Poll asked “During the 2002 grazing season, did you rely on pastures for at least part of the forage ration for any

of your milking cows? a. If so, were pastures the primary source of forages for your milking herd during the grazing months

of 2002? b. How often did you usually move your grazing milk cows to fresh pastures (or a new paddock)?

Key Finding: In 2003, nearly one-fourth of all Wisconsin dairy farms usedmanaged grazing. Combined with mixed feed farms, 44 percent of allWisconsin dairy farms used pasture.

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Large numbers of stored feed and managed grazingoperations are located in the North Central and WestCentral Districts, indicating that these managementstyles can and do coexist. Cooperation benefits bothtypes of dairy farmers. For example, graziers oftenpurchase feed or hire custom harvesting from nearbyfarms, while stored feed farmers have benefited fromcontracting with their neighbors to raise their heiferson pasture.5

How many acres are used for grazing?Both the PATS and WASS surveys found significantacres in pasture. As a managed crop, WASS foundthat pasture ranked first in acreage in 2000.Comparing pasture production to mechanicallyharvested crops, WASS data showed that more acresof pasture were grazed by all livestock than harvestedfor any other crop, including hay or corn for grain.6

PATS found that roughly260,000 acres of pasturewere used by Wisconsinfarmers as feed for theirmilk cows. About half of thispasture was intensivelymanaged: approximately136,000 acres by the PATSdefinitions or 115,000 acresaccording to WASS.7 Again,these numbers are minimumsand did not include pasturegrazed by heifers, beef cattle orother types of livestock.Determining the numbers ofacres used by these enterprisesis an important next step.

How many cows are onpasture?About 26 percent ofWisconsin milk cows werefed pasture in 2002.Fourteen percent weregrazed using managedgrazing methods. Thehighest concentration of dairy

Each percentage is an average for the entire districtand does not show county by county variation.

5 Kim Pokorny, press release. Professional Dairy Producers of Wisconsin Annual Business Conference. March 9, 2005.

Madison, WI.6 Wisconsin Agricultural Statistics Service, news release, May 3, 2001.7 WASS 2004 Dairy Producer Survey. December, 2004. Madison, WI.

Figure 3. Percent of milk cows using pasture by CropReporting District, 2002

Key Finding: About 26 percent of Wisconsin’s milk cows were fedpasture; 14 percent by managed grazing methods.

cows on pasture was in the South West CRD where50 percent of the cows used pasture, and the NorthCentral CRD where 44 percent used pasture. Thirty-three percent of all dairy cows in the West CentralDistrict and 28 percent in the North West were fedpasture (see Fig. 3 on page 5). Managed grazing washighest in three of these areas, with 21 to 31 percentof dairy cows in the South West, West Central andNorth Central Districts fed pasture as their primaryforage.

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Each percentage is an average for the entire district anddoes not show county by county variation.

Figure 4. Percent of milk produced on farms usingpasture by Crop Reporting District, 2002

How much milk comes from pastured cows?In 2002, dairy operations using pasturecontributed 23 percent of the state’s milkproduction, with managed grazingaccounting for 11 percent of the total. In fourof the nine CRDs, farms using pasture generatedroughly a third of the milk produced in that district.Forty-four percent of milk in the South WestDistrict, 36 percent in the North Central, 30percent in the South East and 29 percent in theNorth West came from pastured cows (Fig. 4). Cows

on managed grazing farmsproduced 16 to 20 percent ofthe milk in the South East, SouthWest and North CentralDistricts.

Farms using managed grazingand mixed feed systemscontribute a significant portionof the state’s milk. As Wisconsinstrives to preserve farms andfarmland, maintain a vigorousmilk supply and processingsector, and revitalize ruralcommunities, farms usingpasture should be an integralpart of the future landscape. Asdetailed in the next section,managed grazing provides acomparable income to otherdairy systems. Graziers canmaintain a moderate herd size,while earning more money percow.

Key Finding: In 2002, dairy operations using pasture contributed 23percent of the state’s milk production, with milk from managed grazingfarms accounting for 11 percent of the total.

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Grazing farms withover 100 and under

100 cows

FFFFFinancial performance—Is managed grazing prinancial performance—Is managed grazing prinancial performance—Is managed grazing prinancial performance—Is managed grazing prinancial performance—Is managed grazing profitable?ofitable?ofitable?ofitable?ofitable?

The success of dairy farms depends on the ability offarmers to stay in business, earn a reasonable incomeand enjoy a good quality of life. No farmmanagement style can guarantee good financialperformance or life satisfaction. Grazing, however,can provide a comparable income to othermanagement systems, and graziers are more likely tobe very satisfied with their overall quality of life thanother dairy farmers.

IncomeWisconsin dairy farmers reported an average totalannual family income8 of $35,000-$49,000 in 2002.This average was the same for all types of dairy farms,although stored feed farms were more likely to be atthe upper end of this range. However, on average,stored feed farmers and graziers cited family incomesin the same range for 2002 despite large differencesin cow numbers, acres operated, hired labor andmanagement style. The average grazier with a herdsize of 48 cows obtained a similar household incometo the average stored feed farmer with 108 cows.

Further evidence that graziers in Wisconsin and theGreat Lakes region are performing as well as or

8 Total annual family income before taxes included the family share of net farm income plus income of household members

from all other sources. Respondents had a choice of eight categories, each one being an income range.9 Kriegl, T. and R. McNair. 2005. Pastures of plenty: Financial performance of Wisconsin grazing dairy farms. UW-Madison CIAS.10 Kriegl defined traditional confinement dairies as having 50-75 cows, a stanchion barn, stored feed and mainly family labor

and large modern confinement farms as having a parlor, free stalls, 250+ cows and dependent on hired labor and stored feed.11 WASS 2004 Dairy Producer Survey. December, 2004. Madison, WI.

better than stored feed dairy operations is presentedin detail in Pastures of plenty: Financial performance ofWisconsin grazing dairy farms.9 This study found thatWisconsin graziers had higher net farm incomes fromoperations per cow and per hundredweightequivalent of milk than both traditional and largemodern confinement farms10 every year from 1996to 2002. In addition, Pastures co-author Tom Krieglnotes that a traditional small confinement farm withaverage management and a moderate debt load canimprove financial performance with managed grazing.Switching to grazing does not require high costinvestments and reduces equipment and machineryneeds. Therefore, farmers can adopt grazing practiceswithout suffering a financial setback during thetransition. Despite these figures, 46 percent ofproducers responding to the WASS survey11 citedfarm profitability as a reason not to adopt grazing.Sixty-two percent of graziers responding to the samesurvey listed farm profitability as a reason to usemanaged grazing.

DebtGraziers were more likely to be out of debt thanstored feed operators, consistent with the lowercapital investments necessary to set up a managedgrazing farm business. In 2003, twenty-eight percentof mixed feed farmers and 27 percent of graziers saidthey had no farm debt, while 20 percent of storedfeed operators reported being debt free. Mostfarmers had moderate farm debts between 10 and 40percent of the value of farm assets, though morestored feed farmers than graziers carried this level ofdebt (see Fig. 5 on page 8).

Key Finding: The average grazier with a herd size of 48 cows obtained aroughly equivalent household income to the average stored feed farmerwith 108 cows.

There were also more graziers with debt under 10percent of asset values than either stored feedoperators or mixed feed farms. According to Kriegl,managed grazing operations in Wisconsin have abetter handle on costs, which may allow them toservice debt more effectively than other types ofdairy operations.

As a group, graziers were able to pay down theirdebts between the 1999 and 2003 surveys. Therewere fewer graziers with debts over 40 percent ofasset values in 2003 (18%) than in 1999 (24%) or1993 (33%). During the same time, the number ofgraziers with debt under 10 percent of asset valuesincreased. The number of stored feed operators withthe highest debt loads was lower in 2003 than in

1993. The same number of stored feed operationswere debt free in 2003 as in 1993.

Seventeen percent of stored feed farmers and 18percent of graziers had debts over 40 percent of assetvalues. This may reflect the long-term trend of tightmargins for dairy farmers and suggests that enteringfarmers or those who are financially stressed maycarry greater than desirable debt loads, regardless ofmanagement strategy.

In sum, managed grazing has the potential forprofitability, with less debt and more productiveassets (cattle and land) than other types of dairyfarming. The graziers who are most successful payattention to all financial parameters, including

incomegeneration,operating expensecontrol and debtcontrol, and theymanage theirfarms carefully.12

Figure 5. 2003 Debt levels on Wisconsin dairy operations

Amount of debt

Per

cent

of f

arm

s

12 Kriegl and McNair, Pastures of Plenty.

Debt level as a percent of farm asset values

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Satisfaction—Are graziers happy with their lifestyle?Satisfaction—Are graziers happy with their lifestyle?Satisfaction—Are graziers happy with their lifestyle?Satisfaction—Are graziers happy with their lifestyle?Satisfaction—Are graziers happy with their lifestyle?

As in past surveys, graziers were more satisfied withtheir lifestyle than other types of dairy farmers.Quality of life benefits have often been expressed atgrazing conferences and pasture walks, although whatfactors contribute to this sentiment are now beingexplored in more detail by UW and CIASresearchers.13 As of 2003, most of the dairy farmerssurveyed were neutral towards or somewhat satisfiedwith their family’s quality of life; however, satisfactionamong all types of dairy farmers was down comparedwith past years. Without a specific definition, thissubjective assessment can vary substantially for avariety of reasons, including market fluctuations,personal health, labor issues, finances and so on. Inparticular, the low milk prices of 2002 and 2000 mayhave contributed strongly to the dissatisfactionexpressed by farmers in the 2003 survey.

Nonetheless, in 2003 graziers were less likely to be‘very dissatisfied’ than stored feed farmers and more

likely to be ‘very satisfied’ than other farmers (Fig. 6).Data for the most intensive of the managed graziers(those who moved their cows once a day or more)was looked at as well, since they often express strongsatisfaction from their lifestyle. While too small agroup to represent on the charts, the most intensivegraziers were also the most likely to be ‘verysatisfied.’

These trends were also reflected in farmers’indications of how their quality of life had changedover the past five years. The bulk of respondents saidtheir quality of life had remained the same, while 31percent of the dairy farm families said it had gottenworse. This feeling seemed to sweep across all dairyfarm categories, though management intensivegraziers were less likely than others to rank theirquality of life as dramatically worse (Fig. 7, page 10).Specifically, 83 percent of respondents said they were‘very dissatisfied’ with the price received for milk

Figure 6. Overall family quality of life among Wisconsin dairy farmers, 2003

13 Sarah Lloyd, research assistant, UW-Madison Rural Sociology department and CIAS.

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Key Finding: Across all categories of dairy farmers, 41 percent of thosepolled said they will discontinue dairying in three years or less.

and 60 percent were ‘very dissatisfied’ with their netfarm income.

In response to a new question posed in the 2003survey, graziers were not more likely than othertypes of dairy farmers to take vacations of two ormore days away from the farm enterprise, despiteciting a better quality of life as one of the mainbenefits of using managed grazing. Anecdotally, theyhave said that grazing improves the quality of theirfarm work rather than the amount of time away fromthe farm. Dairy farmers who switched to grazing alsosaid they had more flexibility in their work schedules;they could bring young children along while doingfarm chores or get to family and community events.

When asked about future plans, about a third of dairyfarmers expected to be farming for four to ten moreyears. Furthermore, 30 percent of graziers and 21percent of stored feed farmers felt that they wouldcontinue farming ‘indefinitely.’ Since graziers are, onaverage, only about a year younger than their storedfeed counterparts, perhaps more of them felt theycould farm longer with a pasture-based system.

Across the board, however, 41 percent of farmerspolled said they will discontinue dairying inthree years or less. While farm operators may havechanged their minds since filling out the survey, ifthis figure is even close to accurate, dramatic changesare in store for Wisconsin’s dairy industry.

Figure 7. Change in family quality of life over past five years, 1998-2003

What does a typical Wisconsin grazing farm looklike? Do graziers have land to grow row crops? Howmany cows do they have compared withother dairy farmers? We will continue touse PATS data from 1993 to 2003 toaddress these questions.

Farm sizeOn average, graziers and mixed feedfarmers in this study managed farms thatwere similar in size, with farm sizedecreasing between 1993 and 2002 (Fig.8). Graziers operated an average of 245acres, including 133 acres of cropland in2002. Many of them raised their ownsupplemental or winter feed.

Mixed feed farms operated about thirtymore acres of cropland than graziers in2002, for a total of 277 acres per farm.

In contrast to farm operations that usedpasture, the stored feed farmers operatedabout 75 more acres in 2002 than in1993, averaging 426 acres per farm. Thisincluded 336 acres of cropland per farm.Alfalfa and corn for grain accounted fortwo-thirds of the crops grown, byacreage, on all Wisconsin dairy farms.

Herd sizeThe average number of milk cows perWisconsin dairy farm increased from 54in 1993 to 82 in 2002. Stored feedoperations accounted for most of thegrowth in herd size.

Graziers increased their herds from anaverage of 41 to 48 cows per farm overthis decade (Figure 9). Mixed feedoperations averaged 49 cows in 2002, the

What grazing looks likWhat grazing looks likWhat grazing looks likWhat grazing looks likWhat grazing looks like—Characteristics of farms and farmerse—Characteristics of farms and farmerse—Characteristics of farms and farmerse—Characteristics of farms and farmerse—Characteristics of farms and farmers

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Figure 8. Average number of acres operated perWisconsin dairy farm

Figure 9. Average number of milk cows perWisconsin dairy farm

same as in 1993. During the same time, stored feedoperations nearly doubled their average herd size,

from 58 cows in 1993 to 108 cows in 2002. Much ofthis increase has come from more herds in the 50 to200 cow categories and a reduced number of farmswith fewer than 50 cows. Eighty-one percent of alldairy farms in Wisconsin had herds of fewer than 100mature cows (milking and dry) in 2002, indicatingthat moderate-size farms remained the bulwark of thestate’s dairy production capacity.

In 2002, 54 percent of mixed feed farmers and 61percent of graziers in Wisconsin maintained herds offewer than 50 cows, down from 72 and 80 percent in1995. Nearly half of stored feed farms had 50 to 99cow herds, the same as in 1999 (Fig. 10). There wereabout 15 percent more graziers with 50 to 99 cowsin 2002 than in 1995.

Only five percent of herds that used pasture for theirmilk cows in Wisconsin had 100 or more cows, andabout 12 percent of stored feed farms had herds of200 or more. One managed grazing herd of over 400cows was part of the 2003 PATS survey, although it isknown that there were additional graziers in this sizecategory in the state. In New Zealand and elsewhere,grazing herds of roughly 150 to 300 cows areprofitable single family operations, indicating thatmanaged grazing can accommodate varying herd

sizes. Wisconsin graziers give many reasons formaintaining relatively smaller herd sizes than theirstored feed counterparts, including the number ofacres of pasture utilized, labor decisions andprofitability.

Operator characteristics—Who is usinggrazing?Beyond the types of farms that they run, is thereanything strikingly different about farmers who usemanaged grazing systems? The short answer is no. Atfirst glance, Wisconsin graziers are of similar age,experience and farming background as other dairyfarmers in the state.

Specifically, the average age of the primary operatorof a Wisconsin dairy farm in 2003 was 48 years old.This was the same across grazing categories, withgraziers as a group neither substantially older noryounger than other farmers. On average, graziersstarted farming at 23 years old, the same as mixedfeed and stored feed farmers.

The lack of overall age differences indicates that noparticular generation favored grazing. However, sincethe use of managed grazing has been promoted as anentry method for beginning farmers and for people

with a non-farm background, wechecked the distribution of ageacross grazing categories. Someslight differences showed up. Themost common age category forstored feed farmers was 50 yearsold, 45 for mixed feed farmers and40 for graziers. There were alsorelatively more graziers who wereeither 25 years old or 65 or moreyears old, whereas the number ofstored feed farmers clustered moretightly around the average of 49.There were also minor differencesin the years of experience of the

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Figure 10. Herd size distribution among Wisconsin dairy

operations, 2002

primary farm operators. Stored feed farmers had, onaverage, two and a half more years of experience thangraziers, though there was a lot of variation withinboth categories. There were relatively more grazierswith just five and ten years of experience than storedfeed farmers.

Like the majority of Wisconsin farmers, grazierstended to come from farm backgrounds. Slightlyfewer graziers grew up on farms (85%) than storedfeed (91%) or mixed feed (90%) farm operators.Nearly two-thirds of all Wisconsin dairy farmersoperated family land previously owned by theirparents or their spouse’s parents.

Overall, many Wisconsin graziers had traditionaldairy backgrounds, but managed grazing has alsobeen used as a start-up strategy by younger or lessexperienced farmers. Past reports on beginningdairy farmers indicated that 30 percent usedmanaged grazing. The primary challenges for allentering dairy farmers, whether or not they hadfamily farm backgrounds, were controlling debt,generating income and sticking it out through thedifficult early years.14

Grazing management—How do graziers uselabor and technology?Graziers were likely to select farm managementpractices and technologies that made sense for theiroperations. For example, graziers kept productionrecords on individual cows and used milking parlorsat a frequency more similar to stored feed operatorsthan mixed feed operators. In fact, when comparingfarms of 25 to 99 cows, graziers were nearly as likelyas stored feed operators to keep farm productionrecords and use a milking parlor (Fig. 11).

Milking parlors are particularly appealing to grazierswho wish to maximize labor per cow or perhundredweight of milk. There are now plans andtechnical assistance available for low- and moderate-cost milking parlors.15 In addition, grazing networksprovide opportunities to tour the farms of grazierswho have built low-cost parlors and obtaininformation about technology and managementissues.

On the other hand, graziers were the least likely touse total mixed ration (TMR) machinery. This isconsistent with their greater reliance on pasture and

relatively smaller herd sizes.

Both graziers and mixed feed operatorswere less likely to use rBST than storedfeed operators. Herd size is a likely factorin this decision and graziers often place lessemphasis on maximizing milk production.In addition, rBST has been a controversialtechnology which some farmers havechosen not to adopt regardless of theirproduction strategy.

Wisconsin dairy farms rely primarily onfamily labor. About nine percent of graziershired additional year-round help, compared

14 Barham, B., et al. 2001. Nurturing the Next Generation of Wisconsin’s Dairy Farmers. UW-Madison CIAS. Frederick H. Buttel, et

al. May 1999. Entry into Wisconsin Dairying: Patterns, Processes and Policy Implications. UW-Madison PATS.15 Dave Kammel, agricultural engineer, Center for Dairy Profitability.

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Figure 11. Technology usage on Wisconsin dairy farmswith 25-99 cows

with 18 percent of mixed feed farmers and a third ofstored feed operators. Graziers and mixed feedfarmers were somewhat more likely to work off farmthan stored feed operators, though typically theirwages only contributed three to seven percent moreto household income than the off-farm wagesof stored feed operators. Forty percent of spouses ofall types of dairy farmers worked off-farm, withmixed feed operations using this strategy the mostfrequently. The top reasons given for off-farm work were to provide healthinsurance coverage, offset low milkprices and supplement farm income.

ProductionMilk production averages reported bythe survey respondents in 2002 rangedfrom about 20,700 pounds annually forstored feed operations to 18,200 poundsfor mixed feed operations and 17,500pounds for the managed grazing farms.These numbers are consistent with theexpressed views of many graziers thatthey try to maintain a farm managementsystem that works for them rather thanmaximize production. Over the years,PATS surveys have shown that graziersconsistently produce less milk per cowthan other types of farmers; however,their profit per cow is consistentlyhigher. Many graziers have found that astheir management skills improve, theycan comfortably increase cow numbers,although production per cow maydecrease when herd size exceeds 100cows.16

Most graziers supplement fresh foragewith grain and sometimes otherfeedstuffs to complement the nutrition

16 Kriegl and McNair, Pastures of Plenty.17 Ibid.

obtained from pasture and provide additional returnin milk above feed costs. As Kriegl noted,controlling costs and debt load, as well as optimizingincome, has resulted in the best financialperformance for graziers.17

ImplicationsImplicationsImplicationsImplicationsImplications

18 Mariola, M., K. Stiles, and S. Lloyd. 2005. The Social Implications of Management Intensive Rotational Grazing, An Annotated

Bibliography. UW-Madison CIAS.19 The WSBDF operates in conjunction with the UW-Madison Farm and Industry Short Course and can be reached at 608-

588-2836, www.cias.wisc.edu/dairysch.html. To find out about GrassWorks and regional grazing networks, see

www.grassworks.org. The NRCS grazing specialists can be accessed at www.wi.nrcs.usda.gov/programs/grazing.html. For

the Grow Wisconsin Dairy program, see www.growwisconsindairy.org 15

The steady long-term decline in farm numbers inWisconsin has made the need to maintain or evenincrease the state’s milk supply a priority for thedairy industry. Policymakers, lenders, communitiesand producers need to consider economically,socially and environmentally sound strategies foradding dairy farms. With lower capital investment,reduced machinery and labor requirements, goodprofitability and farmer support networks, managedgrazing can be a successful model for entering dairyfarmers as well as established farmers who switchfrom other systems. If the obstacles to grazingperceived by farmers are identified and addressed,then use of improved pastures may become a keypart of the future success of the Wisconsin dairyindustry.

Whether managed grazing expands as a whole farmmanagement practice for 50- to 250-cow dairy farmswill likely depend on the information farmers haveavailable for decision making, as well as the actions ofagricultural professionals and policymakers. In recentyears, more information on grazing has been madeavailable through published books, articles, magazinesand newsletters.18 Farmers wishing to start ortransition to grazing can turn to educational andtechnical assistance resources such as the WisconsinSchool for Beginning Dairy Farmers (WSBDF),GrassWorks and the Natural Resource ConservationService (NRCS), as well as regional workshops andseminars held around the state. In addition, NRCSoffers financial incentives for implementing grazingpractices, as does the ongoing Grow Wisconsin DairyInitiative.19

What’s next for managed grazing in Wisconsin? Wecannot give a conclusive answer, but we can askrelevant questions whose answers may determinewhat the scope and influence of grazing in the dairyindustry will be in ten to twenty years. As beef,sheep, goat and other livestock enterprises continueto flourish in Wisconsin, the impacts of these pas-ture-based farms need to be assessed as well.

Will managed grazing expand to include more newdairy enterprises, started by people who see the

lifestyle and profitability as reasons to enter farming?With grazing networks and supplies widely available,one of the most significant hurdles faced by peoplewanting to start seems to be finding a farm. Retiringfarmers are often unwilling to relinquish manage-ment control or move off the farm. Developmentpressure and rising land prices are also obstacles tonew farm families trying to rent or purchase a farm.

What are the specific hurdles that keep dairy farmersdiscouraged by economic issues such as low milkprices and rising energy costs from transitioning tograzing? As WASS found in their 2004 Dairy Pro-ducer Survey, farm profitability, putting in fences orwatering systems, and changing their farm manage-ment were the most frequently cited reasons not toadopt grazing. Interestingly, profitability was cited by62 percent of graziers as a reason for using managedgrazing.

What are the issues that influence producers, lend-ers, agribusiness professionals and policy makers asthey consider whether managed grazing can make a

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strong positive impact on the state? They mightinclude: having enough research data about grazingthat is easily read and interpreted; determining theeffects of different production practices on thefarmer, the dairy industry, the environment andsociety; and looking at whether the push for the nextgeneration of farmers to get bigger makes sensewhen ‘economies of scale’ have yet to materializeacross the board for large dairy enterprises.

As groups outside of agriculture wrestle with issuesof land use, the environmental and ecological im-pacts of industrial activities including farming, andthe pressures of population, energy costs and laborissues, it is evident that decisions about farming willnot just be made by the farming community. For thedairy industry, in particular, determining the impactsof managed grazing on rural communities, theenvironment, and the ability of agriculture to attractnew producers, processors and markets will beuseful to the kinds of planning and strategy sessionsthat will shape the picture of Wisconsin farming inthe years to come.

Appendix AAppendix AAppendix AAppendix AAppendix A

Explanation of the PATS data and survey

The 2003 Wisconsin Dairy Farm Poll was conducted by the Program on Agricultural Technology Studies(PATS) at the University of Wisconsin-Madison. Surveys were mailed to 1,694 randomly selected Wisconsindairy farms using the statewide list of dairy farm operations maintained by the Wisconsin Department ofAgriculture, Trade and Consumer Protection. Forty-five percent (762) were completed by active dairyfarmers, i.e., those milking cows on their farm in 2002. Only data from surveys completed by the primaryfarm operator (724) were included.

Statistical significance testing was performed on the 2003 survey data, but is not presented in this reportlargely because there were more similarities between operations than differences.

Similar large-scale random sample surveys of Wisconsin farmers were conducted by PATS in 1999, 1997,1995 and 1993. Additional results from these surveys, as well as details about survey methodology andanalysis can be obtained directly from PATS (for contact information, see inside front cover).

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