SHAREMILKING AGREEMENTS PROVIDE ENTRY INTO DAIRY INDUSTRY
Agricultural Economics & Community Development
Wayne Prewitt
Regional Director
UNIVERSITY OF MISSOURI
Walker
Abstract
Missouri has gained national attention as grazing dairies have increased in number and size. This increase has led to young people expressing interest in returning to or joining the dairy industry. Those wanting to start a new dairy find it difficult to acquire the necessary financial backing to be successful. The equity necessary to leverage and create a family sized dairy is beyond the reach of many young people. Sharemilking agreements allow new dairy farmers to enter the industry and help dairy owners find and keep motivated workers, because they create a path for future dairy ownership. There are typically two levels of sharemilking, the low level sharemilker is where the sharemilker provides only the necessary labor to harvest the milk which is typically a 20% share of the milk. A high order sharemilker is the 50:50 agreement, where the sharemilker provides the cattle, equipment, labor and management for the farm. It gives an incentive to older dairymen to reinvest in their facilities knowing the dairying business can continue generating returns as their move toward and after retirement. The sharemilking educational effort include papers, PowerPoint presentations, case studies and spreadsheets designed to assist in the development of sharemilking agreements. There are currently three sharemilking agreements in place representing 1500 grazing dairy cows in Southern Missouri. As the dairy industry continues to attract young people, sharemilking agreements will allow our grazing dairy industry to expand by creating jobs at the dairies and milk processing plants.
Authors: Prewitt, W.
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Prewitt, W. Agriculture Business Specialist, University of Missouri Extension, Missouri, 64772