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Published January 17, 2013, 04:59 PM

Foreign dairies eye SD

The state could be an ideal place to relocate.

By: David Rookhuyzen, Pierre (S.D.) Capital Journal

PIERRE, S.D. — In the mid-1990s Wim and Nicolien Hammink decided to move their dairy operation — not across the road, but across the Atlantic.

They were running out of room in the Netherlands.

“We had a rented farm of 50 cows, but the future looked not bright for us,” Nicolien says.

One of their three sons wanted to join the business, but expansion was impossible with high land prices, crowding from larger farms nearby and a government-imposed quota system that meant steep fees if they produced too much milk.

They originally planned to move to Wisconsin, where Wim had interned years before, but they found it too crowded. On the east and west coasts, it was the same story. Farther south was too warm for the cows.

But just to the west Hammink says they found a place with land at the right price, a good milk market, decent feed prices and friendly people — South Dakota.

Today, the couple runs a 2,400-cow dairy in Bruce, along with a side business of promoting the state and building the infrastructure for other dairies making the same move they did.

The Hamminks’ experience is not unique. They are just one example of foreign dairies opting to immigrate to South Dakota, mostly along the Interstate 29 corridor, because of near-perfect dairying conditions in the state and lack of land or government quotas back home.

David Skaggs, a dairy development specialist with the South Dakota Department of Agriculture, says there are currently 23 herds, or 20,350 cows, in the state belonging to transplanted foreign farms. In the past 10 years, about 35 dairies relocated to South Dakota from other parts of the country, Canada and Europe, he says.

The simplest reason South Dakota looks appealing to these farms is because there is so much available land, especially compared to Europe, Skaggs says.

“They sell their land by the square foot when you can come out here and buy 160 acres,” he says.

Restrictions

A foreign dairy looking to expand not only comes up against land restrictions, but often quota restrictions where any milk produced above a pre-determined amount for the dairy is subject to levies.

If the owner of a 120-cow dairy operation has a brother who wants to join the business, that owner could pay thousands of dollars per cow just to raise his production quota. It’s often cheaper to move here, where that brother could wind up milking 1,000 cows, Skaggs says.

Hammink, who saw the system in the Netherlands and other parts of Europe, doesn’t remember it fondly.

“I hope it never comes here,” she says.

Professor Alvaro Garcia, an extension dairy specialist at South Dakota State University, says the state also attracts dairies because it can support a large cow population. Abundant grains, corn, alfalfa hay and soybeans, thanks to a processing plant in Volga, means the area can easily produce enough feed for the dairies’ cows.

South Dakota is also good because of the weather, which is similar to northern Europe. Cows prefer a colder environment and produce well during the winter months here, Garcia says.

But the concentration in the eastern part of the state is about more than climate and corn — quality of life is of major concern to immigrating farmers, he says.

While all dairies have investors and employees, Garcia says he can only think of one that isn’t a traditional family-run business.

Many are young families and want to be near larger population centers for good education and colleges. That historically has led those families to choose the I-29 corridor, he says.

“If it’s just a corporation they can set up where they want,” Garcia says.

To promote these advantages, Skaggs and others from the agriculture department travel to trade shows and events such as the World Dairy Expo, held annually in Madison, Wis., to speak with attending dairies.

Hammink and her husband also have joined the push. They have gone to immigration shows in Europe, conducted tours of their dairy and helped others considering the move with permit and immigration requirements, she says.

But immigration has slowed down in the past several years. Garcia says one reason is an increase in the cost of feed as the price of corn and soybeans has gone up.

Skaggs says a combination of unrest and unstable markets in Europe and the fear of the fiscal cliff and the expiration of the 2008 farm bill domestically may have warded off interest.

But it isn’t a permanent setback. There are already dairies from the Netherlands and Quebec lined up to look at land next year, he says.

“I see next spring folks from Europe looking to come over,” Skaggs says.

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