A lack of choice land, high costs and drought conditions all await these dairy operations.
Dairy farmers “think they got it tough now,´ said Bruce Johnson, owner of Greeley-based A. Bruce Johnson Associates, which specializes in irrigated farmland and water rights sales. “It’s going to get even worse.”
For starters, dairy farmers need special properties for their operations.
They prefer large, irrigated farms so that they can raise crops that they use for cow-feed. Farms should also face south or east for more sunlight and less wind.
Other considerations include soil type, setbacks from neighbors and distance from groundwater so that dairy cows don’t pollute it with their manure.
“We have a lot of land in Weld County that would fit their needs,” Johnson said. “The problem is that it’s not for sale.”
Greg Feit, a farm and ranch real estate broker for Fort Collins-based Agri-Enterprises Inc., which sells agricultural land, agrees. The firm was successful last year selling land to farmers, but has not had as much land to sell this year, he said.
Realtors are “having trouble keeping inventory right now because farmers are holding onto what they got,´ said Feit, who also is a lifetime farmer and livestock operator.
Whether dairy farmers will be able to find land will depend on “how deep their pockets are,” he said.
Finding land takes a backseat to a whole set of more complicated issues, others say.
“We’re not having trouble finding land and getting stuff done,´ said Tom Haren, owner of AGPROfessionals, a development company that helps dairy farms and other livestock operations establish themselves in Northern Colorado. “The thing is there are a lot of technical challenges once we do. It just takes time and money.”
“You don’t just find a plug-and-play site where you drop in and have everything you need and everything’s perfect and you just start building,” he added. “It just doesn’t happen that way.”
Haren, whose firm has selected sites for dairy farms for 15 years, explained that the process can take years. The company deals with everything from water and utilities to right of ways and easements to working around oil and gas interests.
“In animal agriculture, there’s quite a long checklist that we have of requirements that we have to put together and meet on a specific piece of property to call it a dairy site,” he said.
It remains unclear just how many dairy farmers are moving into the area.
The Weld County Department of Planning Services does not have statistics on the number of incoming dairies because it only reviews those that need special permits.
AGPROfessionals has seen a “very steady flow” during the past two years, Haren said.
Most of the dairy farms in Northern Colorado are located in Weld County; others are located in Morgan and Logan counties, he said. Five dairy farms that the company has helped set up in the area will begin operations this summer.
Still, Johnson said farmers lately have had no reason to sell their high-priced land, especially in light of strong commodity prices and low interest rates. At the same time, dairy farmers that already have bought larger pieces of property have left mostly smaller pieces of land available.
“They’re going to be wanting large parcels,” he said. “So it’s going to be hard to make that acquisition, especially for people moving in.”
Another challenge dairy farmers face is tight water supplies.
Finding irrigated farmland that will allow dairy farmers to grow crops will be difficult because of the ongoing drought, said Terry Wiedeman, an auctioneer and broker associate for Greeley-based Kreps Wiedeman. Otherwise, dairy farmers must buy more expensive feed from others.
“There’s other feed lots and other people in competition for that same feed,” he said. “Finding land to build a dairy is not an issue. It’s finding the water to raise the feed to feed the cows.”
Besides irrigation water, dairy farmers need drinking water for their cows and will have to compete for a limited supply from the Colorado-Big Thompson Project, Johnson said.
“It will be more expensive for them because that’s potable water; you’re competing with people,” Johnson said. “That’s a new use of water.”
The Leprino plant eventually could require as many as 50,000 additional dairy cows in Northern Colorado.