By Dick Hagen
The Land Staff Writer
September 26, 2008 03:16 am
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As a member of the nine-state Midwest Dairy Association corporate board charged with allocating about $20 million worth of milk checkoff funding, Ron Rinkel of Hillman deals with some sizable dollars.
Rinkel, a 600-acre, 100-cow dairy farmer, said Minnesota generates about $8 annually through a 10-cent-per-hundredweight checkoff. The MDA — which includes Minnesota, North Dakota, South Dakota, Nebraska, Iowa, Illinois, Missouri, Arkansas and Oklahoma — also collects 5 cents per hundredweight for national dairy promotion efforts. Wisconsin has its own program, as does California; these two states are tops in U.S. milk production.
The Rinkel dairy operation is on a twice-a-day milking schedule with rolling herd averages of about 16,000 pounds. “We like family life,” he said. Three times-a-day milking is “OK for bigger operations that mostly hire their milking labor, but it’s a real challenge.”
“We’re pretty diversified,” said Rinkel, who raises steers up to about 800 pounds, then sells them off as feeders. “My son does some trucking. We do all our own maintenance, plus some dozer and excavating dirt work.”
The state of dairy today
Rinkel’s take on today’s Minnesota dairy industry?
“Dairy farming the past two to three years is probably the best it has been for many, many years,” he said. “We were sitting on that $9 milk price for so long, even though cost of production was in that $11 to $12 range. Now we’re at $15 to $16 production costs but with the various component premiums (protein, butter fat) prices are almost $20.
“It’s a good living. And here in the northern states, we have great feed production capabilities so we have some advantages over other areas.”
Twenty years ago there were about 1,200 dairy farms in Morrison County. Today, Rinkel said, there are only about 340 dairy farmers in the county; those 340, however, are producing more milk than those 1,200 did 20 years ago.
He said dairy exports have about doubled in the past five years, and in the United States, per capita fluid milk consumption is actually up for 2008 after declining in previous years. The biggest winner for the dairy industry is cheese, which continues to chalk up yearly gains in per capita consumption. Rinkel said dairy exports could hit $4 billion this year compared with just over $3 billion in 2007.
Strong dairy product demand worldwide, combined with tight supplies and a weak U.S. dollar are the key drivers prompting dairy exports. Plus dairy imports are declining. The dairy trade surplus, the difference between exports and imports, through the first nine months of fiscal year 2008 is $755 million.
Youth, ethnic marketing
In this era of obesity and cholesterol concerns, is the dairy industry holding its own?
“Dairy products actually are winners in this obesity battle because of the tremendous overall health value of most dairy product items. The culprit is lack of exercise,” Rinkel said. “We’ve taken a tremendous amount of exercise out of our school systems. Phy-ed classes aren’t even in the curriculum of many schools today.”
Directing education information to schools is a growing effort within the MDA, as is partnering with various organizations that have special appeal with youngsters. Rinkel said the MDA’s work with the Minnesota Vikings, the Minnesota Twins and McDonald’s, as well as on-going efforts with Schwan’s Foods to develop new food projects utilizing dairy products with appeal to younger people.
Efforts to market “ethnic” dairy products are also in place.
“We have a constantly changing ethnic population in Minnesota. And that means our research efforts are constantly changing also,” Rinkel said. “We do lots of ‘taste-testing’ research to identify the special foods that are definitely ethnic oriented. Because of the growing Hispanic population in Minnesota we’re now producing cheeses specially flavored to appeal to their taste.”
Fair deals for milk
Reflecting on Minnesota State Fair history, Rinkel recalled when the original Minnesota Milk booth was on Machinery Hill and the offer was 5 cents for all the milk you wished to drink. It bumped up to 10 cents, then 25 cents, then 50 cents and today it’s $1 for that cup of milk that never empties.
Considering the costs of other beverages (most were $3 or more) at the fair, Rinkel said that $1 milk cup is still a great value.
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Photos
Ron Rinkel