by Greg Booher
Ag Journalist, Ledgeview Dairy Consulting Services, LLC.


If you're trying to remember why you grew your business to a size requiring a large staff; you're not alone. This article isn't about the transition from the family operated farm to today's large operations. The article is not going to dwell on the functions of a human resource program. Being up to date on employment law, following the recommended procedures to successful hire and train new employees are critical to the success of your business. On-going evaluation, motivation, employee continuing education and development are also important to your business's financial health.

I do not want to minimize the importance of all these vital employee management procedures but I'm sure it won't be a revelation to many readers that these standard practices don't insure a "staffing panacea". In the last several months, many dairy farms seem to be under an employment siege. It has become increasingly more difficult to find and keep milking labor, professional herdspeople and department heads.


Does this have to be your reality?



If you're trying to remember why you grew your business to a size requiring a large staff; you're not alone. This article isn't about the transition from the family operated farm to today's large operations. The article is not going to dwell on the functions of a human resource program. Being up to date on employment law, following the recommended procedures to successful hire and train new employees are critical to the success of your business. On-going evaluation, motivation, employee continuing education and development are also important to your business's financial health.

I do not want to minimize the importance of all these vital employee management procedures but I'm sure it won't be a revelation to many readers that these standard practices don't insure a "staffing panacea". In the last several months, many dairy farms seem to be under an employment siege. It has become increasingly more difficult to find and keep milking labor, professional herdspeople and department heads.

Does this have to be your reality?

Recently, I have been inundated assisting dairy farm managers through their staffing struggles. But is this the way agriculture staffing needs to be? If we're not being objective, can we fall into the assumption, "this is the way it is?" You may have fallen into this trap if you find yourself feeling consoled when you hear how other dairies in your area are grappling with the same employment struggles. Therefore, I got to wondering if other industries in the upper mid-west are struggling with the same employment issues. Is the dairy labor struggle a result of our industry not treating employees in a professional enough way? Are dairy production jobs relatively low in compensation as compared to the non-agriculture sector? Does our industry have a less than desirable employment perception? To gain insight into these questions, I interviewed two very well managed dairies and one manufacturing plant employing almost 2000 production employees.

Assessment of Top Performing Dairies

I found the two dairies are doing a good job of implementing the standard employment techniques recommended by professional human resource managers. Both dairies are having more difficulty finding people to staff their milking parlors. For several years, it has been typical to have Hispanics stop by dairy farms looking for employment but this has become quite rare in the last year. Both dairy farms indicated it is extremely uncommon for Caucasians to be seeking farm employment. They find it is extremely important to hire people who possess good attitudes. They also ask open-ended questions to determine if the applicant has had positions in their past where they had a "heart or true passion" for their work. It is also important to create a team environment with shared goals and continued coaching is a must. Even then, your best employees will in time, likely leave unless your business can provide continued growth or an ownership opportunity to sustain their enthusiasm for work in your company.

Assessment of a Non-Agriculture Manufacturing Company in East Central Wisconsin

When a company employees some 2000 production employees, they learn to implement the standard HR practices out of necessity, but realize they must develop their own techniques of finding and keeping desired employees. A lack of worker interest in manufacturing has been a problem for industry as they seek dependable employees. This too appears to be a problem for the dairy industry as well. Full time recruitment encourages a continuous flow of applicants for a large manufacturing company which increases the odds of finding the most desirable applicants.

The manufacturing company has been able to reduce their yearly turnover to just 5% by implementing a stick regiment of screening potential new hires and sending them through a rigorous training program. The HR manager I interviewed indicated a high percentage of the 5% leave within a few months of their completing the new hire training. These people often were able to "pull the wool" over the HR managers eyes during the initial interviewing process. These few folks are more likely to have a substance abuse problem and have learned how to mislead the employer during the hiring process.

My industry source of employment information has a very up-beat attitude about the people they are hiring because of the results they are getting. As indicated by our top dairy producers, creating an environment in which employees feel engaged in their personal success leads to business success.

Don't let yourself become negative with your employment wows. Even though you may feel you are being held hostage by employees demanding higher wages; increasing your labor cost per hundred can quickly bury your dairy. Increasing wages must result in increased financial performance. Dan Wenzel of Dairy Business Consulting, New London, Wisconsin, provided a labor analysis from several 1000 cow dairies in eastern Wisconsin. The summary indicates wages, especially for the Hispanic labor force has been quickly escalating in 2015. New milking hires are starting at $10-11.00/hour. The labor cost per hundred pounds of milk produced for dairies harvesting their own feed and raising all their own heifers was $3.48/cwt. in 2014. Those dairies harvesting their own feed but not raising their own heifers was $2.75/cwt. pounds of milk produced in 2014. Dan stresses, "Throwing money at the challenge is not the solution. We must employ people who share management's commitment to the industry. Treat them like professionals with the expectation of driving down your labor cost per hundred."

In contrast, the large manufacturing plant is paying $11.75/hour as a starting wage rate. As far as cash wage goes, it appears dairy farms are paying a competitive starting wage but many farms are not matching the incentives offered by industry. The manufacturing plant pays a $.50/hour night shift incentive and for satisfactory performance, new associates receive a $.58/hour increase every 26 weeks up to a maximum pay grade level. Once an employee successfully applies to an advanced position, it is at this time they will receive full employee benefits.

Consider These Solutions

It's clear the labor cost required to milk cows will be escalating at a faster rate than many farms will be able to tolerate, so we must get more output from every dollar spent on labor. Set both labor cost goals for pounds of milk produced per full time equivalent and pounds of milk produced per hour of labor. For starters, you might calculate how many pounds you are producing per full time equivalent (FTE) you employ. Industry benchmarks are available but are plagued with reporting noise and therefore not extremely useful. A goal of 1.5 million pounds of milk produced per year per FTE based on 2500 hours worked per year per FTE would be 600 pounds of milk produced per hour. These numbers will likely put your dairy in the top 10% of dairy farms in the upper mid-west.

Secondly, production agriculture and agribusiness alike must get the word out to youth about the tremendous career opportunities abounding in agriculture. The need for skilled and unskilled laborers is huge. Careers in production agriculture are now very competitive with other industries with the exception of the benefits offered by non-ag industry and agribusiness. Whether it is a career in agriculture engineering, professional herdspeople, dairy industry support people or agronomics – agriculture careers are desirable and competitive. Let's make an effort to change the perception about agriculture careers.
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6.2.2015