Milking more than 300 cows with 100.000 partners

The company 'Riverview LLP' has 14 dairy farms and 300 shareholders in the United States, the majority of whom are employees. They now milk 12 cows at 106.000 of the locations and raise their own young stock at 2 other locations. The growth is far from over.

In the United States, too, most dairy farms can still be described as family businesses. The average size is 250 cows per farm, although many farmers milk 100 or fewer cows. However, the larger companies are growing rapidly. And in terms of ownership, that is no longer always via the structure of 1 or a few family members. Increasingly, companies are set up and run with a different financing structure. Riverview LLP (Limited Liability Partnerships) is an example of this.

The company started in 1939 under the leadership of the Fehr family in Morris Minnesota as an arable and beef cattle business. Dairy cattle were started in the 70s and in 1995 a major expansion was chosen. A structure was set up to enable the purchase of shares by employees and neighbors of a new dairy farm to be set up. In practice, these are mainly arable farmers who grow silage maize and alfalfa for the large dairy farms.

A total of 10 cows are milked on 2 farms in Minnesota and 106.000 in South Dakota. The heifer calves are collected at 1 company in Minnesota and are brought to our own rearing company in New Mexico within 1 week. The young stock is transferred between 3 months old and 1,5 years old and pregnant to another private rearing location in Arizona. Then calve in New Mexico as a heifer and come to Minnesota or South Dakota 3 weeks after calving to continue the lactation. This process will soon be simplified; In Arizona there is a major expansion with a second location and New Mexico will be cancelled.

9.600 Jerseys in 1 stable
Louriston Dairy in Murdock is the penultimate company that Riverview started. Since November 2017, 1 cows are kept in 9.600 building. Like all other companies, they are all Jerseys or Jersey crosses. After 2 generations, these are backcrossed with Holstein once. In groups of approximately 1 cows, these animals all pass through the 700-stand carousel twice a day. 2 men take care of the milking. Predip and postdip is done via automatic sprayers. Other personnel, such as the herd managers, are largely from South America, but have minimal HBO training and are specially selected. They earn at least $106 a year, according to Riverview. Milkers earn between $3 and $40.000 per hour.

The milking shift lasts 11 hours and as long as the same milkers are milking; milking 3 times a day is therefore not possible in the current set-up. Riverview, however, does not apply that anywhere, they see little benefit in it. The cows in Louriston produce an average of 29 liters per day with 4,45% fat and 3,40% protein. Those are high fat and protein percentages by American standards. Also, the average lifespan is above 3 lactations, which is also higher than the average. "Longevity, few problems and more cows in 1 barn are the main reasons for choosing Jerseys on our farms", explains Head of Communications Erin Larson. "In addition, all our milk goes to cheese factories, where a higher protein percentage also pays off."

All stables, including Louriston's, are equipped with cross ventilation. To keep it cool in the summer, but above all to keep everything completely closed in the often harsh winters and still create a lot of air movement. The aisles are cleaned with vacuum trucks, after which the manure goes through the tank to a basin, is separated to 60% dry matter and then serves as box cover. The thick fraction that is too much is sold, just like the liquid fertilizer part, to nearby arable farmers.

Special share structure
42 people work at the Louriston location. Some of them also own shares, but the Fehr family still owns the majority. A share costs $2,36 and a minimum of 10.000 must be purchased to enter. Employees who leave are obliged to sell back their shares. Local residents are encouraged to buy shares, but there is a strict selection: investors from further afield are not allowed in.

In addition, aside from old Morris properties, Riverview does not own even one acre of land around their dairy farms. A conscious choice to obtain the feed completely transparently from the surrounding arable farmers. "Agricultural farmers must be able to trust us, they must not get the impression that we are playing them against each other. Hence this strategy," explains Larson.

Cost price and payback time
In recent years, Riverview has set up several new Dairies and their urge to expand has not stopped. In addition to the equity money, the investments come from bank loans. The investment for Louriston was around €45 million. The payback period is estimated at 20 to 30 years. This is based on a cost price of 25,5 cents per kilo of milk that Riverview is currently realizing in Louriston. Since this summer they have been ahead of schedule with a milk price of approximately 34 euro cents. Until this spring, however, the milk price was more often below 3 euro cents than above it for more than 28 years.

Riverview's way of working and expansion is being embraced in many places, because it provides an economic boost in rural America. This is not seen as a purely positive development in every region. The structure squeezes small dairy farms; With the arrival of a 10.000 head herd in 1 barn, factories see their milk supply increase sharply in one go. Citizens are also more than once against the arrival and the local municipality is about issuing a permit. In very dairy-minded South Dakota, Riverview was recently denied a permit. The main reason was that there was a lot of concern about the too large-scale set-up and impact of the company on the environment.

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