Nebraska: The Next Dairy Frontier - Kris Bousquet

In this episode we sit down with Kris Bousquet, Executive Director of the Nebraska State Dairy Association.  We discuss the tremendous opportunities that exist for dairy production and processing in Nebraska, as well as technological innovation in the dairy industry, human capital challenges and the construction of a $165 million milk processing facility in Seward, Nebraska.  

Transcript

SPEAKER_00 0:02

Nebraska. It's not just a place, but a way of life. It's 93 counties that are home to innovative individuals, caring community, and a spirit that runs deeper than its purple story. It's a story that should be told. Welcome to 93, the podcast.

SPEAKER_01 0:25

Welcome to 93, the podcast, where we talk about Nebraska, its communities, its number one industry agriculture, and the folks who make it happen. I'm Mark Folson, your host for today's episode, brought to you by Nebraska's law firm, Rembolt Latke. Milk, cheese, yogurt, butter, and of course, ice cream. Delicious, nutritious, and straight from the heart of Nebraska's farms. These dairy staples do more than fill our plates, they power our bodies, support our communities, and represent a vital piece of Nebraska's ag economy. And behind every glass of milk or scoop of Rocky Road is a story of hard work, innovation, and local pride. Today we're churning up a conversation with Chris Bosquet, Executive Director of the Nebraska State Dairy Association, to talk cows, cream, and the future of the dairy industry right here in the Cornhusker State. Chris, thanks for joining us.

SPEAKER_02 1:20

Yeah, I appreciate you inviting me on.

SPEAKER_01 1:22

So where are you originally from?

SPEAKER_02 1:24

Originally, I grew up just outside of South Sioux City, Nebraska. So uh my family has you know operated a uh farming operation, agricultural operation, very diversified uh outfit.

SPEAKER_01 1:37

Dairy.

SPEAKER_02 1:37

Dairy uh is the primary focus. That was the bread and butter, I guess, if you will. Uh they they also run some uh conventional, you know, beef animals, cow calf pears. I think they got a couple hundred ahead of those now, and uh farming operation, uh row crops, corn soybean, alfalfa, you know, and then they also have a trucking company. And so growing up it was uh it was a lot of work.

SPEAKER_01 2:02

So so what uh county is that?

SPEAKER_02 2:03

Seventy County. Okay, Dakota, Dakota County. Do you have your CDL license? I do not. I I was really close of getting it at one time, but then uh life just kind of took me away from the farm and and now I'm working in this role, and so I didn't really need it anymore.

SPEAKER_01 2:19

So where did you attend college?

SPEAKER_02 2:21

I went to University of Nebraska, uh, spent my whole time on East Campus. Uh my major was applied science. So it's a really fancy way of saying diversified agriculture. Um, you know, my original goal was to go back home and take over the family farm. And uh, you know, uh wanted to get a very diversified outlook on being able to run an ag enterprise eventually. And uh, you know, life throws your curveballs. And so eventually ended up here and uh working for the Nebraska State Dairy Association. So still working at AG and uh yeah, just really passionate about what I do.

SPEAKER_01 2:58

So as the executive director of the Nebraska State Dairy Association, what do you do?

SPEAKER_02 3:03

Fan, everything. Uh, you know, I'm uh I'm a guy of a one-man show virtually. So registered lobbyists, do all the lobbying on behalf of the dairy association. Um, you know, ran a couple bills this year doing uh more legislative policy work, but majority of my job when I got hired is specific to growth and development. So um the dairy industry is a very consolidated world. There's not a lot of opportunities to sell your milk. And when uh when consolidation happened, that just kind of eliminated a lot of potential outlets for farmers to grow. And so when I when I came over uh to the NSDA in 2018, the farmers gave me a direct vision of, you know, we need to grow this state. We need to create some competition for our milk uh because selling to one market is just uh, you know, basically another foot in the grave. It's just you need people in your state fighting or at least being competitive to buy your product, or else, you know, they basically the market that you're with just names their price and you're stuck with it. And so uh it's a very difficult, complex world the dairy industry is. I don't think people realize how complicated. Matter of fact, I don't know if you know Neil Moseman at all, but I know him well. So Neil, Neil's got this saying the only uh the only other industry that's more complicated than dairy is sugar. And uh I don't know anything about sugar, but if it's more complicated than dairy, that's surprising to me. But so that that's my uh my directive, I guess, from the board of directors is to really focus on growth and development and recruit dairy farms as well as processors, and that turns into a chicken and the egg conversation, you know, that a large-scale processing facility isn't gonna come in and drop a couple hundred million dollars if they're not guaranteed that the milk is gonna be there when they're done with construction. And so you kind of have to try to create this scenario where, hey, you know, uh dairy processing LLC, you know, your milk's gonna be here. Here's the farms that we've got lined up, or, you know, hey, actus nutrition in Norfolk, thanks for investing, you know, 80 million into that plant. Uh we're gonna line your milk up. And so that that's the where I deal with a lot of producers trying to get them to come to the state of Nebraska and help them understand why it's important. And so there's a lot of things that we've done to try to track that. But uh outside of you know, uh growth and development and lobbying, it's general PR. Um, you know, we've we've dealt with a lot of random things over the case uh since I've been with the NSDA. I mean, you got the floods uh where it was you know 500 miles to pick up one load of milk, which is unheard of. And then we have bird flu recently. That that was definitely a curveball that our industry had to navigate. And so you kind of have to be a jack of all trades.

SPEAKER_01 6:05

Uh how did bird flu impact the dairy industry?

SPEAKER_02 6:09

Luckily in Nebraska, it really didn't affect it much. So we kind of saw, and it's probably a reason for that is because I think our industry is fairly small. We're ranked about 25th in the nation for herd size. And so we don't have a ton of animals leaving or coming into the state, and at least dairy-specific animals. And so we did have some tracking uh requirements that were done, uh, required by the Department of Agriculture, just so they can track movements of cows and where they're going and how they're coming in. And there was some pre-screening and testing requirements for anybody moving animals outside of the state to confirm them negative for bird flu. But man, if you look at across the country, uh California got hammered. And I mean, their milk production dropped significantly, and you know, they just it's a it's a high morbidity illness, but not a high mortality in incident. And so it's not as um detrimental to the industry as it is to the poultry sector. I mean, poultry, the poultry industry, if they get H5N1 or bird flu virtually, boy, it's catastrophic. I mean, they lose their entire flock. And so we're pretty fortunate. It, you know, it hits it. If a farm were to hit it, get it, it'd be about a two-week time frame uh where it seems like the wheels are falling off and animals are really sick with respiratory and fever issues and uh you know, backing off on feed intake and water. And uh, you know, so a lot of really intense care for those sick animals, but eventually they work their way out of it and get back into production. And so that's kind of what we're seeing now. There's still a lot to learn about bird flu, but overall the market really didn't change. Um, you know, we it's just been it's been crazy, uh, the market really recently. But yeah, bird flu was just uh just another curveball that our producers had to manage.

SPEAKER_01 8:15

How would you describe the current state of the dairy industry in Nebraska?

SPEAKER_02 8:20

Oh man, we are it's really strong, I would say, right now. It's probably the strongest that I've seen it. Um if you go back, you know, a a couple years ago, milk price was really, really bleak. Uh I mean, farmers were getting 15, 16 bucks a hundred weight, and they were just trying to scrape by. And and a majority of producers, their break-evens about sixteen dollars a hundred weight. I mean, it could be more depending on you know how much debt you're carrying or or whatever. So it's not abnormal to see, you know, sixteen to eighteen dollars a hundred weight. Um, but recently, uh over the the last couple years across the United States, the dairy industry has really exploded. There's been over nine billion dollars worth of investment in new processing capacity in the United States. And we've been fortunate enough to experience that in Nebraska. And that's, you know, as as I mentioned earlier, was my number one priority. Uh and it all it all is happening because of market indicators from overseas. So if you look at the European Union and New Zealand, they're if combine their dairy exports, that's over 51% of the world's dairy exports is from those two countries. And New Zealand isn't making any more land, and they've got some pretty restrictive laws over there specific to you know animal units on acreage, and and they're the environmentalist and the animal welfare activism is starting to reach a point where they're being limited on their ability to expand. And that is is feeding over from Europe. Uh, the European Union is experiencing the same thing. I don't I don't know if you've seen you know the traffic jams, if you will, of tractors driving down the street in Belgium and you know, farmers getting overregulated. And so when you look at at exports, the pressure from the environmental extremist organizations in those countries and the in the anti-agriculture legislation that's being enacted, their growth has has really stymied. It's kind of plateaued, if you will. Now we'll see a 1% tick here, you know, half percent hit tick there. That's kind of seasonality issues, but virtually all of the growth with if you're a global dairy company and you're seeing kind of the unrest towards agriculture-based enterprises in Europe and New Zealand, you're thinking, where am I going to invest to grow my business? And you're you can't not look at the United States of America. And when you look at the United States, you're like, okay, where's the feed? Where's the water? Where's the pro-government? Where's all of the tools that we need to make sure that we have our milk supply, as well as, you know, just a regulatory environment that's going to be profitable for our business. And Nebraska is really up there. I mean, if you're not looking at the middle of the United States where there really isn't a whole lot of people that you know that you can build facilities that are going to be efficient enough to supply your business, I mean, I don't know. Texas is running out of water, Oklahoma is kind of the same situation, Kansas is looking at some water issues as well. And Nebraska, it seems like it's positioned to be, you know, the next dairy frontier because we've got all the resources. I mean, one of the biggest things when I go around the country talking to dairy farmers about moving to Nebraska, when I tell them that we're the number one state for irrigated acres, their eyes light up. I mean, having the control over your feed supply is one of the most important things to a dairy farmer. And uh, and we have it. I mean, we have it. We're we have the most control over that than any other place in the United States.

SPEAKER_01 12:13

So you go to other states and recruit uh operators to move to Nebraska?

SPEAKER_02 12:17

Yeah. Uh, you know, California, we go out there every year to Larry, to the World Ag Expo. We've got a booth, but we spend a lot of time visiting farmers and networking. And um, we've got a ton of great contacts out there in California and Washington and Oregon and uh Idaho as well. Um, we even went out to Nevada this year, Reno, to a conference uh and two weeks later had a guy from Idaho in Nebraska looking for farms. And, you know, I think the hard part for us is we have so few assets, like like financially, that we're such a small association that being able to get out there and do these things is really difficult for us to do on our own. And so we have to leverage our partnerships. And so, like the Nebraska Corn Board and Soybean Board have been extremely supportive of our effort because they know how valuable it's going to be to them after we bring the industry here and grow it. And so uh if it's not because we're doing it on our own, this is such a team effort across, you know, the ag associations and really even state government to grow the industry. And um so we go all over, you know, the United States trying to recruit producers, and it's been it's been really cool and uh awesome to meet all these different people and and learn about their backgrounds and they're really excited about Nebraska.

SPEAKER_01 13:44

And have you had some success in getting some producers to move from states like California to Nebraska?

SPEAKER_02 13:49

Yeah, I think uh, you know, going back to before before me, uh, there was actually quite a bit. So Todd Tolls is one of them. Uh he was a uh California producer from Chino and moved to Kansas and then he came up to Nebraska and built his terror his dairies here. Um Marty DeHogue was a dairy farmer from from also Chino area. Uh we've got another producer, uh Janet Slagers out by Wood River, uh that that milks you know 4,500 cows out there, um, who has a uh herdsman that attended some of our events and from California as well. I mean, and then we have a bunch of investment up in the Wayne area with MPM Farms, that's a California-based outfit that partnered with local producers to build dairies. And so um, yeah, it's been really successful. And, you know, when you look at the the whole equation about investing in Nebraska, these guys aren't moving their whole families most of the time. I mean, a lot of times it's I'm a I'm a Dutch dairy farmer or a Portuguese dairy farmer, and I have a son that I want to set up for the future. And that individual is gonna come out and run the dairy and be the face and and live in the community. And and so that's kind of what the the model is today is you know, the the individual that built the farm in California or Washington or Oregon, um they're gonna they're gonna set their family up for the future and and get their kids off the ground. And so that's been also really fun to work with these young energetic dairy farmers.

SPEAKER_01 15:24

So you mentioned the complexity of the dairy industry. I seem to recall either an undergrad or law school talking about uh the how the marketing of dairy products, marketing of milk goes, something called milk orders and a New York price and all this stuff. Can you at least let's assume we someone has no knowledge on how the milk, uh the the how it's or the sale orders and the marketing. Explain if you can how that works.

SPEAKER_02 15:46

Yeah, so there's a there's a funny joke out there that there's like two people in the world that understand milk marketing. Uh one guy, he's dead, and we're still trying to find the other one. And so it's just really complex. But so there's four different classes of milk. So class one, class two, class three, and class four. Class one is fluid milk, so you know, milk you drink out of a glass. Class two is yogurt, uh, so eat with a spoon. Class three is cheese, uh cut with a knife, and class four is butter spread on bread. So all of those and butter and powder. So all of our in most of the United States, it's made up of federal milk marketing orders. So each federal order uh has its own location differential. So there's either a premium or a deficit price attached to your location. And that's based off of back when they created the federal orders, they had too much milk around milk plants. And so they wanted to incentivize people to get farther away. But the only way that they could do that is by adjusting the price to give those guys a little bit of a premium to cover the cost in freight. And so that's how our industry is kind of designed, is based off of that. It was the center of the US milk market, I think it was in like Euclair, Wisconsin. And then the location differentials were built off of that market. There was so much milk in that region that you know they wanted everybody to get away from it. So if I'm a dairy farmer and living in Nebraska, I'm in Federal Order 32, um, and I sell my milk to dairy farmers of America, out of their footprint of all their milk in this region in Federal Order 32. However much milk goes into class one, let's say 25% goes class one, 25% goes class two, you know, on down the board. That's how your milk price is devised. So it's called a blend price. And a majority of our farmers, that's their base price, is the blend price. So if they sell 25% of their milk in class one, that value is coming out. And then the same thing with all the other markets. But also the farmers get paid off of butter fat, protein, and uh other solids, so the components of their milk. Volume is a big deal, so they get paid per hundredweight. So every per hundred pounds of milk sold is how they derive their value. So the differences in those class prices or those volumes going into those different classes make up your class price or your blend price. And then you get premiums on top of that for more butterfat, protein, or other solids. So farmers can manipulate their feed supply to give them more butter fat or protein. And the Federal Order also reports a butterfat and protein price. But based off of your market, you may be in a market that you know is more cheese-based. And so your cream or your butter fat is highly leveraged. Or uh you're in a powder market like the Norfolk Actis facility, and they want to incentivize protein as much as possible because more protein and milk, the more product that they have going out the door. And so their pricing is differentiated based off of their need, the local plant need. And so um that's kind of in a nutshell how to do it, how it works. Uh, I could get into a lot more stuff, but it's it's super complex.

SPEAKER_01 19:27

It seems maybe I'm wrong. Would it be better if the federal government wasn't didn't play a role in this and then the free market just generally governed what the prices were, or would that actually be a detriment to the produ producer?

SPEAKER_02 19:42

So we actually had over this past year or a couple years, um we had a a big USDA uh hearing where we went and we re m we re revamped uh the federal milk marketing order and we changed some pricing structures and and make allowances and A bunch of different things. And so that process actually helped me understand the importance of federal orders pretty significantly. There's different there. I mean, there's areas in the United States that don't have federal orders and operate just like that. California was one of those states up until a few years ago. But when you look at what they do, uh, I mean, as far as you know milk check transparency and things like that, the federal order has some value, in my opinion. Um, and reporting, you know, it if if we had uh a closed off system, milk plants could set the price whichever way they want, and you just get stuck with it and you have no idea how much profits they're making or how much your milk should be worth. And so there is some value there. And the other thing that's that's important about the federal order is it also makes sure that we have milk on the shelf. And so if you're a class one plant and and you're a milk marketing cooperative and it's in the middle of summer, and class one prices are going down because they don't have the demand because school's out, and you want to take your milk and sell it into the highest value point, then that may be a cheese market. And so now the the fluid milk plant doesn't have any milk to process because everybody's taking their milk away. And so the federal milk marketing order actually subsidizes the class one market to make sure that it's always full. So it's typically the higher value market traditionally. So we always have milk on our shelves in the schools and and uh and on our store shelves. And so uh there is a need, in my opinion, of the federal milk marketing order. And there's a lot of subtle things that they do that keep things going for the American economy.

SPEAKER_01 21:47

Is your association strictly dairy cattle, or do you have goat producers as well?

SPEAKER_02 21:51

You know, if if you want to be uh we're dairy cattle.

SPEAKER_01 21:55

We I don't think we have any goat members, but so that's simply because of the volume that's required of milk from a goat compared to a cow?

SPEAKER_02 22:02

The goat, the goat milk industry is very difficult. I mean, uh there's not a ton of consumption in goat. And so typically in goat milk, so typically what you're trying to do is create cheeses or soaps or things like that with with your product. Now there are markets out there that there's routes that actually run across the United States where uh if a producer is a goat uh milker, then they'll freeze their milk, and then along that route, they'll stop and pick it up and bring it to their plant, and then they'll unthaw it and make it into whatever they want. But those are you have to have a lot of milk and a lot of goats in one region to make that work uh because they don't want to stop if it's you know, if you're milking 50 goats and you know you're only picking up a little bit, it's not that worth it to them. So we don't have a huge thriving goat dairy industry or a dairy goat industry in Nebraska, but it is strong, I would say. I mean, I mean, we have the national goat, dairy goat show going on right now in the Grand Island.

SPEAKER_01 23:00

Where yeah, okay.

SPEAKER_02 23:01

Yep, yep. So that's kind of cool to see.

SPEAKER_01 23:04

Yeah.

SPEAKER_02 23:04

But we we don't represent any goat farmers right now, but we would be happy to if they wanted to jump in.

SPEAKER_01 23:10

You mentioned you ran some legislation this past session before the Nebraska legislature. What would you say are the biggest policy issues that the dairy industry currently faces?

SPEAKER_02 23:20

So the the bill that we ran last year was specific to freight. So as I mentioned earlier, we have a huge problem with logistics. Um, with the consolidation of the industries or the industry in Nebraska, farmers have gotten a lot farther away from their milk plants because they've closed down. And now we got to send our milk. If if I'm in Wood River, Nebraska, I have to send my milk to Omaha. And so we just have a lot far whereas whereas before I was sending my milk to Ravenna. You know what I'm saying? So significantly shorter distance. All of our producers are facing that challenge. I mean, if you're if your family farm is located um in one location and that's where all your assets are, and now all your markets are 200 miles away, that becomes an issue. I mean, that that cost of freight will never change. It'll only go up. And so what we did this year was we worked with the Department of Transportation to pass a bill that would basically create a permit program for milk haulers. So, as you know, during tive harvest time frames, grain farmers can go above and beyond the posted weights uh and they have an exemption because they're hauling a commodity. So that was something that we were kind of eyeing as a possibility of maybe having a raw milk exemption. Uh, when we got the bill into the legislature, we got slapped with a$2 million fiscal note. And so we kind of realized that well, there's we need to do something different here. So logistics and inefficiencies are something that we got to try to find because these guys are trying to survive really. And with freight going up, uh it's really difficult. So we we eventually got uh LB561, which was an overweight permit program for raw milk haulers, to go up to 107,500 pounds uh on the appropriate distributed axle ratio. Uh so bridge law all still exists. Those uh so now we can haul, I think on a on a 2,000 cow dairy, it it cuts seven loads per month off of their freight because they can haul that much more milk per load. So that's gonna help significantly. Uh, we also testified on uh an e-verify bill that um would have required employers of 25 uh employees or more to be participating in the e-verify program. Um in our industry, it is so extremely difficult to find labor, qualified labor, uh, which I know is a difficult conversation to have across hospitality and restaurants. I mean, you name it, everybody's struggling. So we felt that, you know, the e-Verify program or any really limitations on us being able to fill these critical roles was a significant problem specific to animal welfare. You know, it's not so much that our businesses aren't going to be profitable. It's more or less we got to be able to take care of the cows. And if we can't milk our cows or feed our cows or provide the right veterinary uh, you know, uh care to our animals, then that's a significant problem, animal welfare problem. And so uh Senator Kalth had a bill that would have required everybody over 25 employees to participate in the verify program. And we just felt that that was a barrier. Um, you know, we're already participating in all of the requirements for the federal government on you know, onboarding employees and vetting them and getting the appropriate documentation. And so we felt that that was one more thing, and uh that would have prevented our ability potentially to hire the the people that we need. But, you know, outside of that bill or you know, the overweight, overweight milk bill, I think labor and immigration has been our number one uh marching point as far as legislatively recently. I mean, we we participate, uh, the the chamber and OTOC and and these other organizations have have come together to create this coalition around labor and to talk about hey, we all came to an agreement. It's like 70 or 80 organizations across the state of Nebraska that came to an agreement on some specific terminology that we know that this is extremely important. Um we want to find solutions to make sure that we can staff and appropriately run our businesses. And we want to the border to be secure, but we also need a workforce program that is functional. Uh, if you look at the visa programs out there right now, dairy farmers have a really difficult time of of actually making those work.

SPEAKER_01 28:10

It's because it's seasonal, right?

SPEAKER_02 28:12

Yeah, it's all seasonal. And you know, you can't bring a guy in for nine months, and by the time you get him trained up, you know, you have to send him home. Yeah. It doesn't work. And so we've been advocating for years that we need reform here. And you can just imagine what that conversation's like in Washington right now, especially. But I think we might have an angle. I think I think Trump realizes uh at least some of his rhetoric that he's been putting out about, hey, we need to take care of our farmers, uh, you know, restaurant hospitality, you know, we need to make sure that there's been some tweets, and I I don't know how else you get a statement out of the out of the White House, but there's been some tweets that have said, you know, like, hey, uh basically he's gonna let the farmers be the ones that vouch for him. And and that's kind of what some of the things that I've been hearing out of the the the federal policy uh lobbyists is there's some programs that could be coming now that the big beautiful beautiful bill is passed, there may be some movement. When you talk to our elected officials, they're thinking, man, it may not happen until after the next election. So that's somewhat worrisome, but we're very much in favor of a year-round workforce program, whether it's let's just let's just call it like it is. I mean, there's a lot of people in this state that are that are really good people and they go to work every day and they're family-based and they're they're focused on being good members of the community. If those are the type of people that we want, which I in my opinion it is, then we need to create a program that gets them legal, not not citizenship, but legal. Like let's let's figure out a way that we can document them, get to know, like make sure that who they say they are is actually who they are, but also get them on a five-year work visa. If if that farmer has known that person for 20 years and they've worked on their farm and become family members, uh, then then let's figure it out, you know. And that's that's all that we we really care about. We, I mean, we obviously want a secure border, but we want a workforce program that works. And so we've been working religiously with ABIC, American Immigration Business Coalition. Uh, we have uh some very passionate farmers that are on our board of directors that are super involved in in hosting meetings on their farms with our elected officials, a federal delegation. Um, and so that's probably one of our biggest legislative priorities right now, regardless of state uh policy federally, that that is number one.

SPEAKER_01 30:47

So one of the biggest issues, if not the biggest issue, that uh Nebraska agriculture faces is the shortage of human capital labor. Uh in the dairy industry, how has technology helped address that? Has has there been innovation as far as the type of systems that are in place that reduce the number of employees that you need?

SPEAKER_02 31:07

Yeah, absolutely. Um the hard part about robotics or that technology is that it's really expensive. It's really expensive. I mean, you have to be able to justify the savings and labor on the investment of the technology. And that that's really where right now it's a little bit difficult. So we have a lot of uh, I think we've got five dairy robot dairies, uh robotic dairies, fully robotic in the in Nebraska right now. They're unbelievable. If you ever want to see one, let me know.

SPEAKER_01 31:41

Aren't they on like a turntable or something? The cows go in as a stanchion, or how's it work?

SPEAKER_02 31:46

So that the what you're describing is a rotary parlor. Uh a robotic dairy is basically they have a free stall barn. So it's uh it's an enclosed environment, temperature controlled virtually, fans, you know, sprinklers, the feeds pushed up to them. They go and do whatever they want. And when they want to get milked, they walk inside this little robot room and it milks them, it gives them a little snack, a little protein. They eat that, they get milked, and they go back and they lay down or they go eat and drink water. Like it's it's unbelievable. I mean, it is the the perfect environment for a milk cow, in my opinion. It's there's no stress, there's no noise, there's no flies. I mean, it's unbelievable. The robotic or the uh the rotary parlor is much more different. So the the the animal housing facility is similar. They just don't have the robots, the the milking robots in them. And then typically there's an individual that brings those cows up to a holding pen and then they walk on to the rotary parlor. Now they are getting pretty advanced in today's society with rotaries. So they'll and a lot of times they'll have uh a robot that actually sprays the udder to disinfect it. And then there's even a robot that'll come along and scrub the udder to clean it off of any foreign debris. And then there's also a robot, I don't know if they've perfected it yet, but that'll attach the milking machine. And then so that basically takes away three people from your parlor. Whereas, you know, you would have normally had to pay three different people to do that job. Now you don't have anybody calling in sick, or it's as long as the machine works, you're good. But so farmers are getting really uh tactful about where they make those changes because going back to the visa program, a lot of the the terminology in those H2A H2B visa programs, you can't use those guys to melt cows. And so, how do you fill the roles on your farm that are critically needed, but still, you know, utilize the visa programs to make it work? It's it's just a conundrum. It really is. So robotics and technology is significantly advancing. Um, I think but expensive, very expensive. Um, I I don't know if there's another industry, agriculture industry out there that's using technology like the dairy is. I mean, if a if a if a milk cow walks into a robot barn, they're weighed, their temperature is recorded, their rumination, how long they've been laying down, how long they've been walking, like there's thousands of data points that are offloaded into a into a system, and the algorithms are set up to where if there's a deviation in production or any of their metrics, then it triggers uh a notification to your phone, and you can go out and treat that cow before she even gets sick. It's unbelievable the tools that we have now to make sure that our animals are taken care of. It's it's unbelievable.

SPEAKER_01 34:53

So recently it was announced that there is a$186 million milk processing facility being constructed in Seward, Nebraska. How did that project come about and what impact do you think it'll have?

SPEAKER_02 35:06

That has been we've been working on that project, I think, since 2020, and it's 2025. You know, I mean, these things are marathons trying to get these things off the ground. Um, we've had tons of other projects that we've worked on that haven't come come to fruition, but you know, it all started uh a few years back, uh, you know, working with Todd Tolls, uh, who's the CEO and the owner of Tolls Dairies. Todd and Todd had a vision of doing something really incredible. I think it started out as maybe a like a chip of some sort of made of milk fat that's called mana. Uh, I don't know.

SPEAKER_01 35:45

It's a biblical thing where manna from heaven.

SPEAKER_02 35:48

Yeah. So he was gonna he was gonna develop this product called manna. And you know, over over talking with him, um, you know, it eventually morphed into we're gonna make fluid milk. And that was really because of TJ, Todd's son. So TJ, uh about my age, 34, 35 years old, uh, has a has a son named Zane, and found it really difficult to find milk products that fit in a diaper bag and are shelf stable and don't have a bunch of junk in them. And so that was really where things kind of took off was they knew they wanted to create this this vertically integrated opportunity, but they didn't know what was the right fit. And that's how Move, their new beverage, their fluid milk beverage was developed. Um, and so we kind of we supported those guys really from the product formulation stage. You know, we worked with the University of Nebraska and had taste testings done, and we went to the athletic department and tried it on all their athletes and got feedback on how that worked and you know what they thought that the the product felt to them. And and we worked with Dave Ellis when Dave, the the sports nutritionist, was here and and now we're working with the new staff. But Dave helped provide input on hey, you know, this is the proper formulation. And the Kansas City Chiefs were even involved in their dietitian. But going back to the the the direction of move, TJ wanted to make sure that this product was developed specifically for kids. And I don't know if you've how much experience you have with like the the uh the beverage industry, but it is unbelievably competitive. Like if you go out, like go to a gas station and look at all the beverages, it's insane. And so breaking into the beverage industry, especially dairy, where you know it's been a bunch of big companies for a long time that have controlled the space has been really difficult. But they're they're starting to see traction. Uh, they've got a high protein beverage now that is uh geared towards kind of the Ozempic Wagovy crowd. But um over the years, we had to compete for the project at the same time. So we were supporting them and helping them get off the ground. Our team, our Grow Nebraska Dairy team, which consists of AFAN, the NSDA, uh Department of Economic Development, Nebraska Public Power District, Department of Agriculture. I mean, we have a ton of team players that supported this project through the from day one, really until now. And so um when it came down to it, we knew Todd was getting close to wanting to pick a site, and we rallied the troops and uh we had an amazing site visit. Seward as a community is unbelievable. John, I don't know if you know Jonathan Janks.

SPEAKER_01 38:44

Jonathan Jenkins has been a guest on here, and he is a wonderful blessing to the state of Nebraska and the Seward community.

SPEAKER_02 38:51

I I can't say enough good things about Jonathan. Just his professionalism and the way that he handled the site visit with the Tolls family and their business. It's I don't I don't think I've been on one that's gone as well.

SPEAKER_01 39:05

Yeah, Seward needs to lock him down on a long-term contract.

SPEAKER_02 39:08

Lifetime contract. I'm telling you. I mean, that guy is special. And uh and that the hit his organization of that site visit was what pushed the the project over the edge and secured it. He had the University of uh Concordia and you know, all of the major players in the community, pet source, the big businesses, uh other, you know, churches, you name it, were were at the event to say, you know, we may not be directly involved, but we're gonna support you when you come here. And in talking with Todd afterwards, he's he said, and of all the other sites that I've seen, across Nebraska, across Wisconsin, across any other state, that is the most welcomed I have ever felt. And he goes, I've lived in I've lived in Nebraska for 20 years, and I I had no idea that. That I could feel this, you know, from a community so close to me. And and that that was what did it. And, you know, that's what we've tried to do as the Grow Nebraska Dairy Team is just develop this welcoming, you know, organized professional uh recruitment effort. And I think, you know, with Jonathan's help, that is really kind of what pushed things over the top.

SPEAKER_01 40:21

What's the estimated time frame for construction?

SPEAKER_02 40:23

So they're they're moving dirt right now. Uh they're hopeful to be done early 2027. Uh so Q1, Q2, 2027, uh 180 some million dollars. It'll be on the equivalent of milk. It's about 1.8 million pounds of milk per day, which is about 20,000, 22,000 cows worth of milk. Um so we have we have 45,000 cows in the state. So that's half of our state's production is going to go into that plant. And, you know, if you want to break it down into Nebraska used to export 2 million pounds of milk a day because we didn't have the local markets. And now with our growth at dairy and our growth at uh Actus Nutrition in Norfolk, that's a 3 million pound investment. We've got grassland butter plant that's doing an investment uh in increasing their butter churn. Um, you know, there's some other facilities in the state that I can't really talk about that are also looking at investments. And so we've kind of become this milk deficit region now in Nebraska, which is an unbelievable opportunity for dairy farmers. But um 2027, that plant will be off the ground. Uh and then, you know, what we we still need to fill the plant too, which is could be a challenge, but or not a challenge, an opportunity for us as the Grow Nebraska dairy team. So Todd is he's got about a little bit over a million pounds of milk a day in the state. And if you're building a 1.8 million pound plant, you got to figure out where the rest, you know, the other 800,000 or 700,000 is coming from.

SPEAKER_01 41:55

So the welcome mat is out for dairy producers to move to Nebraska.

SPEAKER_02 41:59

Yeah, not just for that project, but for the other ones. I mean, we need more milk. Uh, if if that is a message that I could tell across all the airwaves uh that dairy farmers listen to is we need more milk. And we've got sites, we've got farmers that are excited about bringing dairies in. Because if you're a grain farmer, this is an unbelievable deal. Like you get free manure and you get to sell your product right up right at right here in the stick. And you negotiate the contract, you know what you're getting. It's not I'm I'm selling it at the local co-op uh and I'm taking the price that they give me. I mean, it's it's an unbelievable opportunity. So that's the message that we're also trying to tell is if you're a grain farmer and you're thinking about how do I set my business up for future success and know what I'm gonna get paid and can kind of you know plan and decrease costs, this is this is the ticket. I mean, back a couple years ago when we were looking at nutrient prices that were sky high, we did a cost-benefit analysis on what an arrangement looks like with a dairy farm. And the the farmers that were partnered with the dairy had a$500 per acre advantage over selling your your grain to the local co-op because you don't have to spray your crop. Well, you do have to spray it, you don't have to spread your manure, you don't have to harvest it. Uh the cover crop is typically paid for by the dairy farmer. You've got no freight, you've got no drying expenses, you know, virtually you plant it, you run the pivot on it, and you walk away. I mean, it's it's unbelievable the efficiencies that that are created for grain operators. But so that has been exciting to work with those guys, especially with the corn board and soybean board to help them understand that and and help tell our message. And it's been going really well.

SPEAKER_01 43:56

What's your favorite dairy product?

SPEAKER_02 43:59

Uh man, I love milk. I'm not gonna lie. I love all the sweet stuff too. But you go for whole milk, 2% chocolate, whole? Yeah, whole all the way. My family, they'll drink whole, I mean, till the day I die, if if I if I have any control over it. But when you look at the science behind whole milk, it's undisputable. That's uh, the benefits of of consuming it. I mean, you're you're the human body is designed to to basically break down whole fat. And that's the science has flipped significantly. And now we've got legislation in Congress that's gonna you know implement whole milk in in schools. Uh it's going through the Senate right now. And so whole milk all the way, uh, you know, especially if you put a little Hershey's chocolate syrup in there.

SPEAKER_01 44:45

That's delicious. It really is good. So, Chris, one question we ask all of our guests, and you get one word. What is the one word that to you the best describes the state where you get the honor of being the executive director of the Nebraska State Dairy Association? You get to help recruit dairy producers to Nebraska and promote the dairy industry here in Nebraska. What is your one word for Nebraska?

SPEAKER_02 45:08

Opportunity, I think, is is the word that I think about. Um you you just think about all the things and all the the potential growth opportunities that we have. If you're a processor or if you're a dairy farmer, or if you're somebody who just loves to eat dairy, the opportunity is absolutely out there in the state. And you know, um I think we have we have the as Governor Pillen, we have the people in place. Uh the people are what make the state, but we have the people in place in Nebraska right now to make this thing go. And uh the opportunity is endless. And that's it's our mission, that's our goal. And uh hopefully by growing the industry like we have, it creates opportunity for our dairy farmers as well, which is the main goal for me.

SPEAKER_01 45:59

So Chris, thanks for coming in. If you enjoyed this episode, uh consider sharing it with someone perhaps in the dairy industry who may want to move their production to the state of Nebraska, or anyone else who may find this of interest. And please keep on listening as we release additional episodes on Nebraska. It's great communities, Nebraska's number one industry, agriculture, and the folks who make it happen.

SPEAKER_00 46:20

Thanks. This has been Nighty Three, the podcast, sponsored by Nebraska's law firm, Rembolt Ludkey.