Welcome to the Bullvine Podcast, where we cut
through the dairy industry's noise to deliver
the unfiltered truth. Today, we're tackling the
billion -dollar question, should your dairy grow
its own grain or stick to milking cows? New research
from Penn State reveals a shocking 15 % energy
savings for farms that grow their feed. But equipment
dealers won't tell you about the $500 ,000 price
tag or the 15 -year payback period. We'll dissect
the brutal economics, expose the hidden risks
for high -producing herds, and share real -world
case studies from dairies that made grain work
and those that went bankrupt trying. Stick around
to hear why a 650 -cow New York operation calls
grain their secret profit center, while a Wisconsin
farmer says, growing corn nearly sunk us. Plus,
we'll give you a step -by -step tool to decide
if this gamble could save or sink your dairy.
No BS, just the facts you need. Let's dig in.
Welcome back to The Deep Dive, where we try to
wade through all the information out there for
you. Today, we're tackling a question that, well,
it's probably popped up a few times lately. Should
your dairy get into growing its own grain? Is,
you know, a smart move for the bottom line, maybe
even energy independence? Or is it a risky detour?
Yeah, that's really the core issue, isn't it?
We've got some fascinating stuff here. Research
pointing one way, heart economics pointing another.
It's definitely not a simple yes or no answer
you might get from, say, your nutritionist or
banker. We're going deeper. Exactly. I mean,
on one hand, you hear about this Penn State research
showing some, frankly, pretty surprising energy
savings, like up to 15 % for farms growing their
own feed. That sounds great. But then you look
at the price tag on a combine. Right. Suddenly
that 15 % feels a bit different. So that's the
real tension here. Our mission today is to unpack
all of this, the research, the costs, the real
world stuff, and give you a clear picture of
when growing grain might make sense for a dairy
and, well, when it probably doesn't. And it seems
like good timing, too. Our sources say there's
a definite upswing in interest in this idea across
different dairy regions. There really is. And
it's not just out of the blue. Farmers are looking
hard at feed costs, thinking about supply chain
security after the last few years. And that flexibility,
being able to use land for grain or forage, that's
definitely appealing, too. Absolutely. That control
factor is tempting. Like our sources say, you
really got to evaluate your own situation carefully
before jumping in. So, OK, let's start with this
shocking energy advantage the Penn State research
found. Tell us about that. Right. So the good
news. as one source puts it. They found northeast
dairy farms growing their own grain could cut
fossil energy inputs by, yeah, up to 15 % compared
to farms importing all their feed. They compared
farms, same herd size, same milk output, but
different levels of feed self -sufficiency. And
yeah, ones doing both forage and grain on farms
saw that 15 % drop in energy per turn of milk.
Okay, 15%. That's not small potatoes. So where's
that saving coming from? Magic. Not quite magic.
It's mostly about importing way less feed, 71
% less than the study. Think about it. Growing
feed, say, in the Midwest, often relies heavily
on synthetic nitrogen fertilizers. Making those
fertilizers, that takes a lot of energy. Right.
It's not free energy baked into the fertilizer
bag. Exactly. But when you grow grain on farm,
you can leverage your own resources better. Manure
becomes a key nutrient source. Legumes in the
rotation help fix nitrogen naturally. The Penn
State team actually saw nitrogen inputs were
four times higher for the imported corn compared
to their trial farm using manure and legumes.
Four times. Wow, that's a huge difference. It
really is. And it's not just Penn State saying
this. Research out of the University of Wisconsin
-Madison backs it up. They found integrated crop
livestock systems could cut purchase fertilizer
needs by up to 80 percent. And their long -term
trials showed diverse rotations could keep yields
up while cutting input costs, maybe $40 to $70
an acre compared to continuous corn. Okay, so
the energy efficiency side looks, well, pretty
compelling on paper. Less fertilizer, less transport.
But let's bring it back to the farm level, that
15 % overall energy saving. How does that line
up with... where a dairy actually uses energy
day to day. What are the big hogs on the power
bill? That's a really important connection to
make. Yeah. NYSERDA report that's the New York
State Energy Research and Development Authority
broke it down. Ventilation, big one, about 25%.
Lighting, close behind at 24%. Milk cooling,
22%. Vacuum pumps, 17%. Then you get down to
manure handling, water heating. Those are around
4 % each. And actual feeding equipment, only
about 3%. 3%. Wow, okay. So the energy saved
by growing grain is mostly before it even gets
to your farm gate in the production and transport.
But the big energy users on the farm fans, lights,
cooling, aren't directly changed by where the
grain comes from. Precisely. That 15 % reduction
is significant environmentally, for sure. But
it doesn't mean your farm's electricity bill
will suddenly drop by 15%. The savings are mainly
upstream. It's a critical distinction when you're
thinking about your farm's direct operating costs.
Right. Okay, so the energy piece is complex.
That leads us to this fundamental point the sources
kept hitting. Milk comes first. Sounds obvious,
maybe. It sounds obvious, but it's easy to lose
sight of. You're a dairy farmer. Your main job,
your core business, is making milk efficiently.
Everything else should support that. So the question
is, does adding a whole grain enterprise truly
help you make milk better or more profitably?
Or does it pull resources your time, your people's
time, your capital? Away from the cows. Yeah,
I can see that. Especially where high -quality
forage is king, you wouldn't want to compromise
your haylage quality because you're stretched
too thin trying to manage grain crops, too. Exactly.
You need to be honest. Do you have the land,
the time, the labor to add grain acres without
messing up your forage planting and harvesting
schedule? If things are already tight, adding
another big job could cause problems everywhere.
Right. Can't chase the grain dream while the
forage harvester sits idle or the cows are waiting.
Okay, this leads us straight into the scary part
for many. Equipment costs. This isn't just about
buying a bit more seed, is it? Not even close.
Forget just seed. Fertilizer. Herbicide costs.
You're talking major capital. Specialized stuff.
Combines. Grain planters. Drills. They're not
cheap. These storage bins. Maybe dryers. You
need people to run it all. More labor. And the
land itself. If you put 200 acres into corn for
grain, that's 200 acres. not growing forage or
maybe not rented out, that's a real cost, the
opportunity cost. Absolutely. So yeah, the energy
savings are nice to talk about, but the economics,
way more complicated. The sources suggest that
often growing your own grain only really pencils
out financially when commodity prices are high.
When they drop, you might wish you'd just bought
it. It really makes you ask, if I have, say,
half a million dollars to invest, where does
it make the biggest impact? A new combine. Or
maybe better bedding or parlor upgrades? That's
exactly the critical question. Okay, let's dive
into some of those numbers. University of Minnesota
Extension laid out some typical costs. A new
combine. Yeah, I saw that. $300 ,000, up to half
a million bucks. Yeah. And depreciating $20 ,000
to $50 ,000 a year. Ouch. And that's just the
combine. A corn planter. $80 ,000 to $150 ,000.
Grain drill, maybe $40 ,000 to $80 ,000. Then
storage bins priced per bushel, maybe $1 .80
to $2 .50 a bushel capacity. Handling gear, augers,
conveyors, another $25 ,000 to $80 ,000. Ed and
maybe a dryer, $40 ,000 to $150 ,000 there too.
So for a medium dairy, maybe 150, 300 cows trying
to grow even just... half their grain, you could
easily be looking at over half a million dollars
in capital. And that's before fuel, maintenance,
labor. Exactly. It adds up incredibly fast. And
this ties into that Penn State extension warning
about false efficiency. You think you're saving
energy or being self -sufficient, but you create
this huge financial burden with the equipment,
maybe straining other parts of the operation.
Grain growing can definitely fall into that trap.
Okay. So you bite the bullet, you buy the iron.
When does it actually start paying you back?
Cornell looked at this break -even stuff, right?
And it varies a lot. Hugely. Depends on your
farm size, what equipment you might already have,
and crucially, what grain prices are doing. For
a smaller place, maybe 50, 100 acres of grain.
Cornell figured the break -even corn price might
need to be $5 .80 to $7 .25 a bushel. And the
payback could be 15 plus years if you bought
all new gear. 15 years. 15 years. Wow, that's
a long horizon. Does it get better for bigger
farms? Yeah, it does improve with scale. Medium
farms say 100, 250 acres of grain. Maybe breakeven
is $4 .75 to $5 .60 corn. Payback might drop
to 8 to 12 years, get up to 250 plus acres. Breakeven
could be $4 .10 to $4 .80. And maybe you see
a positive ROI in 5 to 8 years. Scale is definitely
key. Right. And these numbers assume buying everything
new. If you've already had some gear or use the
custom operators, it could look better. For sure.
If you can use existing planters or drills or
rely on custom harvesting, that cuts the upfront
investment significantly. But you still have
storage costs, handling costs, and with custom
guys, you're relying on their schedule. Can they
be there exactly when you need them? That's a
risk too. This whole thing just screams opportunity
cost, doesn't it? If you have that capital, is
grain gear the best use for it on a dairy? That
is the million -dollar question. Exactly. Limited
capital. Where does it give you the best return
for improving milk production, your core business?
Is it the combine? Or is it new freestalls, better
ventilation, a more efficient parlor? Things
that directly touch the cows in the milk check.
That NYSERDA energy pyramid idea seems relevant
here. Analyze first, then efficiency upgrades,
then big capital projects. Makes total sense.
Go for the low -hanging fruit first. Better bedding,
improved ventilation, those investments directly
impact cow health and production. Money tied
up in a grain drill isn't directly making your
cows more comfortable or productive. And the
example they gave of variable speed drive on
a vacuum pump. Saves significant energy, potentially
pays back much faster than a whole grain enterprise.
Exactly. Those targeted efficiency gains within
the dairy itself often offer quicker, more certain
returns than launching a whole new farming venture.
Okay, let's switch focus to the cows themselves.
High -producing herds and homegrown grain. The
sources suggest that can be tricky. It's not
just about growing it cheaply. No, definitely
not. Think about commercial grain suppliers.
They blend grain from lots of sources. That gives
them incredible consistency in the nutritional
profile. It also dilutes any potential issues
like mycotoxins from one specific batch. Achieving
that same consistency on farm with smaller batches
is just harder. And those high -end cows pushing
90, 100 pounds or more, they're sensitive, like
that producer said. Even small energy swings
in high -moisture corn can mess them up. Totally.
They have way less wiggle room nutritionally.
And storage becomes absolutely critical. You
can't just pile it in an old shed. You need proper
drying, aeration, monitoring to prevent spoilage
and quality loss. That loss is called shrink.
Shrink. Right. That's moisture loss, spoilage,
pests. And the Wisconsin research said typical
losses can be, what, 4 % up to 15 % for corn?
Yeah, depending on storage and management. Even
a few percent shrink at today's prices adds up
fast. It eats away at any savings you thought
you had. So you need the capital for good storage,
and you need the management time to actually
keep that grain in top condition. Okay, we've
painted a challenging picture, but it's not impossible,
right? The sources did mention some success stories.
Dairy's making it work. What's their secret?
Yeah, absolutely. There are successful examples.
Michigan State Research looked into this. One
model is the large -scale integrated dairy, like
that 650 Cow Farm in New York. They farm 1 ,800
acres. over a thousand of that in grain. A big
part of their success is just scale. They can
justify owning the big equipment, multiple combines,
trucks, etc. Makes sense. Economies of scale
kick in. What else? They have a dedicated grain
management team, almost separate from the dairy
side. It gets the focus it needs. They've invested
in modern storage with monitoring. Their equipment
is sized right, so grain harvest doesn't delay
forage harvest. They use a specialized crop consultant.
And crucially, they track grain as a separate
profit center. That farmer said they treat it
like its own business unit, comparing costs directly
to market prices. Right, treating it like a distinct
business. Okay, what about the other example,
the mid -sized farm in PA? They had a different
approach. Yeah, the 320 cow dairy. Their success
comes more from partnerships. They share equipment
and expertise with neighboring grain farms. This
avoids that massive upfront capital cost. They
focus mainly on corn, buy other grains. They
use custom harvesters, but have agreements that
prioritize their timing. So collaboration is
key for them. What else works? Flexibility. They
can decide late in the season whether to chop
a field for silage or harvest it for grain, depending
on needs and conditions. That's huge. They also
have relationships for emergency grain purchases
if needed, and they do intensive soil testing
to maximize manure nutrients. They figure their
production costs are usually 15 -20 % below market,
and that silage flexibility is a big win in dry
years. So clearly no single recipe for success.
Scale helps. Partnerships help. but both need
serious management and planning. Now, you mentioned
regional differences and maybe a research gap.
That 15 % energy saving in the Northeast, that
might not apply everywhere. Exactly. The Penn
State study was, well, in Pennsylvania, a big
chunk of their energy saving came from not trucking
grain all the way from the Midwest. If you're
already in the Midwest or another major grain
area, that transportation energy saving disappears.
Your potential advantage is much smaller, maybe
zero. Right. Depends where you're starting from.
Yeah. And even Penn State noted that while their
system using on -farm fuel production lowered
energy inputs, it needed more land and might
not actually save money at current fuel prices.
Again, energy efficiency doesn't always equal
economic efficiency. They aren't always the same
thing. Michigan State also compared specialized
areas versus diversified ones growing feed. What
did they find? It was interesting. They looked
at about 246 farms. They found that under 500
acres, the farms specializing in milk production
buying most feed actually had an 11 % higher
return on assets than the diversified farms growing
lots of grain. But that advantage -vantage for
the really big farms, over 500 acres, suggests
that at large scale, the grain economics can
work. But for smaller to mid -size, specialization
often paid better. So for many folks listening,
focusing intensely on milk production might be
the smarter financial play, according to that
study. Okay, let's try to boil this down. When
might growing grain actually make sense? What
are the green lights? Okay, based on everything,
favorable conditions would include having significant
excess land, Truly beyond your forage needs,
already owning some key grain equipment helps
a lot. Having management who actually knows grain
farming or access to good specialists. Being
located far from grain belts, like the Northeast
example, where transport costs are high for purchased
feed. Having the scale maybe two plus acres per
cow to make equipment ownership viable. Having
good modern storage at the capital to build it.
And, you know, having the right soil and climate.
Plus, enough financial cushion to handle the
learning curve. Maybe some losses initially.
That's a solid checklist. Now, the flip side,
what are the big red flags, the warning signs
that say danger, Will Robinson? Big warning signs.
If you're already struggling to make enough high
-quality forage, if your team equipment, labor,
management is already stretched thin, if your
focus is pushing really high production per cow,
remember that sensitivity issue. If you're in
a major grain region where it's cheap to buy
locally, If investing in grain means not investing
in cow comfort or crucial dairy facility upgrades,
that's a huge red flag. Lack of good storage.
Always struggling to get field work done on time.
And, frankly, having limited financial reserves
to handle a bad crop year or low prices. It really
forces an honest look in the mirror, doesn't
it? At your resources, your skills, your farm's
core strengths. Like the source said, success
here isn't luck. It's about a clear -eyed assessment
of your unique situation. Exactly. Dr. Stevenson
from Wisconsin quoted in the source, summed it
up well. The advantage varies hugely by size,
management, region. He said the winners tend
to be either intensely focused on milk or big
enough to run both milk and grain effectively
as separate, well -managed enterprises. So those
core questions keep coming back. Does this help
my main mission making milk? Do I really have
the capacity for this complexity? Where does
my capital do the most good? Maybe for some,
that 15 % energy saving in the Northeast, if
they have the scale and setup, aligns energy
goals and economics. But for lots of others,
focusing on the cows, optimizing that core dairy
business is probably still the best bet. The
truth isn't always convenient, as we like to
say at The Bullvine. That's spot on. And look,
before you get serious, there are some pointed
questions you absolutely need to ask specific
people. Right. Like your equipment dealer. Don't
just ask the price. No way. Ask for the total
annual cost of ownership depreciation, maintenance,
finance. Ask how many acres they think you really
need to justify that machine. Ask about custom
work options as an alternative. And crucially,
what's their parts and service situation during
harvest? Can they keep you running when time
is critical? Good ones. And your nutritionist.
You need a frank talk. What quality variations
should you expect from homegrown grain? How will
that impact your high producers? What testing
should you plan on? What storage and processing
methods did they recommend for your setup and
your cows? Okay. And definitely your financial
advisor or lender. Yeah. Compare this investment
directly to other uses for that capital on the
dairy side. Calculate your realistic break -even
cost, all in. How does the extra debt affect
your overall financial health, your flexibility,
and what risk management tools... crop insurance
marketing strategies should you use for the grain
side? Okay, let's quickly recap the biggest takeaways
then. One, potential 15 % energy savings in feed
production, especially far from grain belt, but
that doesn't always equal economic savings for
the farm. Two, equipment costs are huge, 300k,
500k for just a combine needs scale. Payback
can be very long, 8 -15 plus years for smaller
farms. Three, Successful integrated farms often
have separate grain management, modern storage,
and are either large -scale or use partnerships
effectively. 4. High -producing herds are sensitive
to grain quality variations. Specialized milk
production is often more profitable under 500
acres. 5. Use those checklists' favorable conditions
versus warning signs to assess your own farm
realistically. Exactly. It's that trade -off.
Energy potential versus financial risk and management
complexity. Penn State showed the energy angle
in one region, but economics depend on your scale.
Setup. Management. Success seems possible at
600 plus cows with dedicated resources, but smaller
farms face big hurdles with costs and ROI. It
always comes back to, does grain growing advance
or distract from making milk? Data often suggests
specialization wins for dairies under 500 acres.
Well, that was certainly a deep dive into the
grain growing question. Thanks for joining us
as we sorted through the pros, cons, and complexities.
It is definitely not a simple decision, and hopefully
this conversation gave you some valuable things
to think about for your own operation. Yeah,
we really hope so. We definitely encourage you
to think about the points that hit home for you
and talk them over with your own advisors, your
lender, nutritionist, consultant. Consider this
discussion just the start. It's a big strategic
question for your dairy's future. So after chewing
on all this, are you leaning more towards the
potential of homegrown grain? Or are you thinking
it's better to double down on optimizing everything
that goes into that bulk tank? The answer, as
we've seen, is really unique to your farm's story.
Until our next deep dive, keep farming smart.
including our exclusive decision checklist and
equipment cost breakdown, visit thebullvine .com.
Before we go, here's your takeaway. Growing grain
isn't about pride, it's about profit. For some,
it's a lifeline. For others, a distraction. Only
your land, labor, and ledger can decide. Next
week, we're exposing how carbon credits are paying
dairies $1 ,200 per cow and why 80 % of farmers
are getting scammed. Until then, this is Hostname
reminding you, In dairy, you don't get what you
deserve. You get what you negotiate. Innovate
or evaporate.