- Real Estate
- Food & Drink
July 5, 2018
This piece is presented by Howalt+McDowell Insurance, a Marsh & McLennan Agency LLC company.
In observation of National Dairy Month in June, we followed Drumgoon Dairy to see what it takes to run its operation.
The way David Elliott’s eyes light up when he talks about his family’s dairy farm 17 miles south of Watertown, you’d never guess that working on the farm wasn’t part of his career aspirations.
“I went to school to be a psychologist. But now I talk to cows instead of people,” he said with a chuckle.
The oldest of Rodney and Dorothy Elliott’s three children admits it was quite a shock to hear his family was moving from Ireland to South Dakota to start a dairy operation.
David, who was 14 when the family decided to relocate to South Dakota from Northern Ireland in 2006, said getting involved in the operation hadn’t been an option until recently.
The Elliotts ran a small dairy in Ireland with no room for expansion because of restrictive government regulations. Frustrated by a lack of options to grow and enticed by a marketing campaign the South Dakota Department of Agriculture had been using to target foreign dairy operators, the family decided to leave Ireland to pursue the dream of expanding the dairy.
And so, Drumgoon Dairy was established near Lake Norden. What had been a 140-head milking operation in a densely populated tourist area in Ireland became a 1,400-head herd on the sprawling plains of South Dakota.
Dorothy, who had been a nurse in her overseas life, took over administrative responsibilities. Rodney transitioned from caring for and milking the cows himself to managing a staff of employees.
As for David, he finished high school and went off to college at Dakota Wesleyan University in Mitchell to pursue a profession outside of the dairy world.
Dreams of expansion realized
It was Rodney’s dream in Ireland to expand his dairy operation. His dream in South Dakota was to grow enough to give his children the opportunity to come back to the farm.
At a time when a lot of other dairies are going out of business, the Elliotts have weathered fluctuating milk prices to be in a comfortable position to continue to grow. An expansion in 2008 increased the size of the herd, and in 2010 Drumgoon Dairy began raising its own heifers. The newest addition was completed in 2015 and grew the milking operation to 4,500 cows housed in two separate facilities.
Cows are milked three times a day by crews in rotating 12-hour shifts. It takes 10,000 man-hours of labor a month to keep the dairy running smoothly.
During June alone, 450 calves were born into the Drumgoon Dairy operation. The dairy’s livestock consumed 4,500 tons of food, used 200 million gallons of water and produced 9 million pounds of milk.
Big numbers like that soon became more than Rodney could manage on his own and lured David home. As the operations manager, he oversees maintenance, feed management and supply chain and also has day-to-day interaction with the staff.
It’s a role he’s clearly well-suited for, calculating numbers and recalling statistics from the top of his head. But his interest in psychology remains evident. His favorite aspect of working on the dairy? The people.
Many of Drumgoon Dairy’s employees are from Central America. David has day-to-day interactions with the staff and even organizes a Drumgoon Dairy soccer league team.
“Human capital is one of our biggest challenges,” he said. “There’s always more cattle, but people are hard to find. Our employees have an incredibly high level of professionalism. They take a lot of pride in what they do and are more skilled at taking care of the animals than some veterinarians.”
With growth comes new risk
Recruiting and retaining qualified, reliable employees is only one of many challenges Drumgoon and other dairies must overcome as they grow.
Allen Schlenker, a risk management consultant with Howalt+McDowell Insurance, a Marsh & McLennan Agency LLC company, said the insurable risks of a dairy farm are every bit as complex as a major manufacturer. But as the size and sophistication of operations have grown, a lot of dairy farmers haven’t taken the time to ensure their insurance coverages have evolved accordingly.
Dairies are big business – to the tune of a $2.7 billion economic impact on the state – according to SDSU Extension.
“Today’s modern dairies have outgrown the local farm insurance agency. They need better coverages, more resources and dedicated expertise,” Schlenker said.
In South Dakota, farmers aren’t required to carry workers’ compensation coverage. This historic holdover on the books was meant to provide small family farms the economic and administrative ease necessary to operate feasibly. Though dairy farms such as Drumgoon technically fall into this exemption, their 50-person staff is far from what the spirit of the law intends.
“Without proper coverage, these large-scale operations are putting themselves at a grave risk in the event of a catastrophic loss,” Schlenker said.
Cybersecurity is another serious issue.
“We monitor and track everything on computers,” Dorothy Elliott said. “Herd health, human resources, production — the technology resources we have today are so much more sophisticated than even five years ago.”
Schlenker said the agribusiness sector in particular is behind on cybersecurity readiness compared to other industries.
“We surveyed over 1,000 executives from small to middle-market organizations across North America and found that 31 percent of agribusiness leaders ranked themselves as not-at-all confident in their organization’s ability to manage, respond to and recover from a cyber incident.”
No signs of slowing down
As Drumgoon looks to continue to expand, David said the next step is more mechanization.
“We are constantly looking for ways to become more efficient, to reduce our environmental impact and to provide better care for our cows.”
The mechanization of milking is yet another exposure Drumgoon Dairy has to adapt to.
“Marsh & McLennan Agency opened our eyes to some of the risks on the farm that weren’t covered originally,” Rodney said. “Their experience with agribusiness clients and other industries and clients enables them to proactively protect us against potential exposures.”
With plans to add more livestock to the operation, Dorothy said she would like to dispel the notion that smaller is better.
“It’s like comparing a one-room schoolhouse to modern education facilities. Our size allows us to take better care of our herd; the health and happiness of our animals is key.”
One of the ways the Elliotts are helping outsiders learn about the modern dairy farm is through social media. Drumgoon Dairy has more than 10,000 followers on Facebook.
“I saw what others were doing on social media and thought I could entertain and teach people who aren’t involved in agriculture,” Rodney said. “Apparently, I was right!”
As Dairy Month concluded, the Elliotts vowed to continue doing what they are most passionate about this month, next month and many months after that – “Feeding the world and keeping them healthy,” David said, smiling.
They moved from Ireland, employ most of their staff from Central America and are helping build a South Dakota industry. We go inside Drumgoon Dairy for a look at what it takes.