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SD Hoping To Milk Dairy Business

March 12, 2014, 9:50 PM by Matt Holsen

SD Hoping To Milk Dairy Business

Got milk? The demand for dairy is on the rise in South Dakota and that's prompting Governor Dennis Daugaard to come up with his own catchy slogan. 

Daugaard has taken to Twitter with the hashtag #getsomemilk2014 in an attempt to get the word out to dairy producers that South Dakota is the place to be for their business.

Happy cows may come from California but their owners may be headed for South Dakota. Daugaard has been recruiting producers from the "Golden State" with promises of no state income or corporate tax.

Here's what he had to say at a recent convention out west courtesy the DairyHerdNetwork:

"I was just talking to a California producer who has a site here in California we're going to be visiting tomorrow, as well as one in South Dakota. He said, I don't pay any income tax in South Dakota, I like that well, but I don't pay any income tax either because I have no net income here," Daugaard said.

Joking aside, a lot of the California dairy producer's struggle has to do with the cost of feed. There's plenty of corn and beans in the midwest while farms in California sometimes focus on other crops.

"The guys out west are feeding the same corn and beans we are, but they have 1,500 miles of freight on it. I think part of the evolution of the industry is going to see more cows where their feed is," Randy Gross said.

After spending time in California and Wisconsin, Gross opened up Prairie Gold near Elkton. He says South Dakota has been a great place to own a dairy business.

"Every part of the country has plusses and minuses. I guess this winter might make you rethink the minuses here but overall we really think the plusses outweigh the minuses of a long cold winter. We like our community. We have great neighbors. It's a great place to raise a family and be in business," Gross said.

Gross operates one of the largest dairy farms in South Dakota with around 3,600 cows and 37 employees. A typical cow here at Prairie Gold is milked three times a day producing 80 pounds of product.

"The economic impact of each dairy cow annually to the state of South Dakota is over $14,000," Walt Bones said.

Bones, former South Dakota Secretary of Ag and farmer, is behind the Governor's push. He says there were 280,000 dairy cows in the state back in 1960 compared to just over 90,000 today.

"Do the math. If we could double our herd, which is the Governor's goal, and add another 90,000 cows, take that times $14,000, you're talking over a billion dollars of economic impact. Huge deal," Bones said.

And there's room for growth. Bell Brands is opening a multi-million dollar cheese facility in Brookings and hopes to be ready for full production this year.

"Whether or not we sell milk to Bell is irrelevant, it's good for everybody that produces milk here. Our milk goes to Land O' Lakes. Valley Queen is a big player. Agropur has got the plant in Hull, IA. There's a lot of options for your milk. Bell Brands being in the area is good for everyone," Gross said.

The I-29 corridor is full of facilities looking for milk and currently, South Dakota producers are only meeting a portion of the demand.

"We only produce about 35-percent of their needs so there's a huge opportunity for South Dakota," Bones said.

According to Bones, last year the state saw 8,000 head of dairy herd growth and 15,000 more permitted. It looks like the state will be milking the business for all it's worth in the future.

The majority of growth in the state right now is from South Dakota producers expanding their operations.

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