Daley Farms Dairy

Post Bulletin file photo

WINONA — “We’re denying economic progress here in Winona County.”

Marcia Ward said the animal unit cap in Winona County is hurting business, particularly the dairy business.

The prime example, said Ward, one of five Winona County commissioners, came earlier this year when the Winona County Board of Adjustments refused to grant a waiver to Daley Farms in its request to expand to nearly 6,000 animal units, well beyond the county’s 1,500 AU cap.

Winona County is losing its dairy industry faster than the Minnesota average, according to the 2017 Census of Agriculture county-level data released on May 30.

Counties across the state have seen not only a drop in the number of dairy farms, but a drop a specific sector of the dairy industry: farms with 199 or fewer cows. That trend has particularly hit Winona County.

Since 2007, Winona County has lost nearly half its dairy farms — 94 of 212 — with herd sizes 199 and fewer, but among that same group of farms, it lost 8,105 cows, or 55 percent of the animals on smaller dairies.

Meanwhile, the larger dairies in Winona County have stayed somewhat steady and even grown. The number of farms with herds from 200 to 499 dairy cows held steady at 32 from 2007 to 2017, and even saw an increase in the total number of cows, from 9,050 to 10,096, an 11 percent jump. And the largest dairies, those of 500 cows or more, increased from seven farms to 10 with the number of cows going from 5,590 to 7,312, an increase of 30.8 percent, according to the census reports.

Ward said more so than the number of dairies, the impact the industry has on the local economy is measured in the number of cows. And that’s where the animal unit cap is causing damage to the county’s economy, particularly in rural communities that rely on a healthy agriculture economy. Ward said the cap, which has been in place for more than 20 years, was designed to help keep small dairies viable by restricting the larger dairies from becoming too big. But that, she said, hasn’t happened.

“Obviously, by the numbers, we’re losing those smaller dairies,” she said. “So it’s not been effective, no. There are too many other factors that determine who is going to farm, how they’re going to farm.”

In fact, all the cap has done, she said, is stymie any potential growth because the nature of the dairy industry is geared toward larger farms that can take advantage of the economies of scale in an ag sector that lives on thin margins.

While Ward and fellow rural commissioner Steve Jacob have said they’d like to revisit the animal unit cap and explore whether it’s a law in the county that makes sense, not every member of the Board of Commissioners agrees.

Commissioner Christine Meyer said while her “heart goes out to farmers in general and dairy farmers specifically” due to everything from a weak ag economy to natural disasters that have impacted farms in recent months, she’s not convinced lifting the animal unit cap is the answer.

“I would want any action Winona County might take to help farmers to actually be helpful, and I’m not convinced that the animal unit cap is the place to start,” Meyer said.

At a county board meeting in March, Meyer said she proposed convening a committee to look at the issues facing farmers in Winona County, but that committee should take a broad look at all parts of the ag economy, not just dairy and the animal unit cap.

Meyer said she spoke with several small dairy farmers, and they told her as more large dairies enter the local economy, they squeeze out the smaller dairies.

“The additional argument they presented to me was that as the milk supply increases, which would likely happen with expansion of larger dairies, this would lower milk prices even more,” she said. “In addition, they said that milk processors might drop several small dairies when they picked up expansions of a single larger dairy.”

But Shelly DePestal, one of the owners of Daley Farm, said it’s that kind of thinking that has led Winona County to account for 81 percent of the dairy cows lost in the state of Minnesota since 2012.

And the problem is getting worse, not better. Since 2017, she said, she’s heard anecdotal evidence of at least 2,000 more cows being lost in the county.

“People don’t want to jump through all those hoops,” DePestal said, referring to the animal unit cap and the business climate for large dairies in Winona County. “They’re not even going up to the animal unit cap because of all the people who will throw stones at you when all you want to do is run a business.”

While the issue with Daley Farm might be decided one way or another after July 17 when the Daleys’ appeal of the Board of Adjustments decision in February will get its day at the Minnesota Court of Appeals, the rest of the county still lives under the animal unit cap.

Ward said that the dairy industry is made up of independent businesses, and the Daleys, who are at the heart of the fight in Winona County, are a family farm and independent business.

“It used to be you could live off the land,” Ward said. “But today, you have to have cash flow to pay your taxes. We don’t take chickens to pay your taxes.”

And the loss of dairy cows is a loss of tax revenue across the county, she said.

“That’s major dollars,” Ward said. “If we let some other industry just leave Winona County, there’d be a major uproar.”

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