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George Clift and Alan Rhodes have been working with the growing number of dairymen who have been re-locating to the Panhandle either to expand their dairy operations or simply to start anew.
Clift comes from an agricultural back ground and, these days, he’s helping users of agricultural land buy and sell Texas Panhandle property.
Rhodes is an attorney with the Underwood Law Firm in Amarillo and he, too, focuses much of his practice in the agricultural arena.
The surge in the number of dairy farms in the Panhandle is somewhat of a phenomena, and it’s interesting to hear what George and Alan have to say about the trend.
Play and/or download HERE
17:00 minutes
Contact George Clift: george@texpanland.com
Listen to George Clift's take on the rural land market in the Panhandle - HERE
Contact Alan Rhodes: alan.rhodes@uwlaw.com
Click "Continue reading ..." below for a transcript of this interview
TRANSCRIPT
George Clift comes from an agricultural background and these days he is helping users of agricultural land buy and sell Texas Panhandle property. Alan Rhodes is an attorney with the Underwood Law Firm in Amarillo and he too focuses much of his practice in the agriculture arena. Together, they have been working with a growing number of dairymen who have been relocating to the Panhandle either to expand their dairy operations or simply start anew. It is somewhat of a phenomena and it is interesting to hear what they have to say about the trend.
George Clift and Alan Rhodes are joining me today to talk a little bit about what is happening in their part of the state, the Texas Panhandle. George Clift, welcome.
George Clift: Thank you, Ed.
Ed Blackburn: And Alan, thanks for joining us today.
Alan Rhodes: My pleasure to be with you.
Ed Blackburn: Firstly, George, I know you have been working in the land area for a few years now. Will you tell us a little bit more about your background?
George Clift: I grew up in Central Oklahoma and educated in Oklahoma State in agriculture, worked for a large seed company, working with livestock producers primarily, and 10 years ago got involved in the real estate brokers business in the Panhandle of Texas.
Ed Blackburn: With a heavy emphasis on the ag side, right?
George Clift: Absolutely. Yes, our business is pretty much all ag-related.
Ed Blackburn: Alan, you have been practicing law in Amarillo.
Alan Rhodes: Yes, sir, for about 23 years with the Underwood firm. I have got the privilege of working in ag about half the time from pay limit issues to just purchases or sales or family planning for the ag family.
Ed Blackburn: It seems like whenever I talk to someone that is from the Panhandle area, the subject always comes up about a type of immigration that has been taking place there, immigration of dairy farmers. What is going on there?
Alan Rhodes: Since about 2000, we have had continuous influx of farmers both from California, Central Texas and from Europe. It has been a steady growth and right now I think that we are moving a little bit from the Panhandle to the east side of the Panhandle. East farmers like our friendly environment and they like our good resources.
Ed Blackburn: So, it has been going on about six to seven years now.
Alan Rhodes: That is right. I would say that we first came across the line, the New Mexico-Texas state line in the Clovis-Portales-Muleshoe area and that was the first place that this got started cropped up in the Parmer County, say around Friona, and then at the same time we had growth that was starting in Dalhart in Hartley and Dallam Counties. We have also seen it grow toward the east in the last few years.
Ed Blackburn: So, it is really the growth is not from east to west; it is from west to east.
Alan Rhodes: Yes, sir.
Ed Blackburn: Where are these guys coming from? Where are these families coming from? I heard you mentioned that there were some foreign individuals that had been coming over, but where are they coming from?
George Clift: Ed, the primary emphasis initially was that of Central Texas. People are much more favorable climate wise, temperature, humidity, and cow comfort was a big issue. As the population explosion has grown in Central Valley, east of Los Angeles, a lot of those areas have been forced out because of urban sprawl and they have looked at our region to move into. I would tell you that we have had good growth from both areas over the last 10 years. Of course, these operations are production agriculture and so they want to move where their farmers and farm families and inputs to support their dairy operation. Alan, why do you not talk a little about the foreign investors that are coming?
Alan Rhodes: We have had several families that have come primarily from Denmark. For the most part, they are Dutch families that had moved from the Netherlands to Denmark and because they were frustrated with the corporate laws that apply to farming in Denmark, they decided to come here and get big. That allows them to move from a, say, 300 cow dairy in Denmark and when they come here, they are wide-eyed with expectation and plans because they see that they can have 3000 cows or 10,000 cows to about as big as they can imagine.
Ed Blackburn: How many dairy farmers had moved into the Panhandle since the year 2000?
Alan Rhodes: The last number that I saw and this number came through the high ground of Texas was 75 farms that are now up and operating in the Texas Panhandle. If we crept over into eastern New Mexico or western Oklahoma, that number would grow, but let us say 70 to 80 farms are now up and operating in Panhandle.
Ed Blackburn: Well, that is fairly significant I guess that there are others in the making.
George Clift: Well, it appears to me, Ed, that there is going to be about six to eight dairies a year built and that is a number that -- we have got contractors that I think can facilitate that. Obviously, we could build them faster than that, but over the last 10 years we today end up having about 70 or 80 dairies and I expect that to continue to grow in our region.
Ed Blackburn: Well, this obviously has a significant economic impact to that part of the state.
George Clift: Most of these dairies facility wise are going to be from, say, 3 million on the bottom side to 10 million plus on the top side, a big advantage for the local farmer to grow silage and hay and grain. Our region is noted for the cattle-feeding industry and quickly becoming noted for the dairy industry also.
Ed Blackburn: Well, it is a welcome infusion I guess for the Panhandle, which had been suffering a little bit before this new move.
George Clift: That would be correct.
Ed Blackburn: Why are they going to the Panhandle? Could they not be going to other parts of the state?
Alan Rhodes: Well, the environment here is better for a handful of reasons. Weather is great in the Panhandle for dairy farms in the same way that the beef industry has chosen this part of the state. We have low humidity and so cow comfort is something that we can specialize in as we take care of the cows. I guess a happy cow produces more milk. In addition to good weather, we have some big country that remains available and our average size dairy is creeping up and for a while it looked like 2400 cow dairy would be a big average dairy, if you can be both big and average at the same time, but that number is creeping up and we have got plans for 6000 cow dairies going on. On the top side, there is one family that is shooting to have 30,000 cows and milk. The big country that we have also allows people to meet their growth hopes, plans and desires.
Ed Blackburn: Guys, will you tell us a little bit about milk prices? I guess what I am driving at is do milk prices play any part in this formula that is pushing the demand for Panhandle land?
George Clift: Let me make your status, Ed. Alan will obviously have his own thoughts. Obviously, profitability of operation dictates growth. If the milk price is something about $12 to $100 that is paid to the dairymen, most of these dairymen are [unintelligible] breakeven or whatever. If it falls below $12, well let us -- these are big, big operations and anything that is not meeting or breakeven, they have got to dip into their hip pocket. Profitability in this industry has been very positive over the long haul and that is one reason we have seen these families grow where they may have a dairy in Kansas, two dairies in New Mexico, one dairy in Colorado, one dairy in Texas. That is all over the same family. The expansion is driven by profits as much as anything. That would be my answer to that question.
Alan Rhodes: We are exiting a time of low milk price. Futures are much higher than they have been. The industry is gearing up. The profitable producers are trying to add cows right now and position themselves to take advantage of the high milk price that is coming along and we have not had that probably for the last couple of years.
Ed Blackburn: So, those milk prices actually do. They are part of the formula.
Alan Rhodes: Absolutely.
Ed Blackburn: Where does the milk go once it is produced by these guys?
Alan Rhodes: There is a new cheese plant being built at Dalhart. There are plans and talk of the new plant that is being built north of Hereford. A new cheese plant has just been brought online over in the Clovis area. Those are facilities that if they all come together will add a lot of need for milk. The fluid milk, which is the most profitable part of the milk component, is being shipped east mostly is what I hear whether it is Dallas, Atlanta, Florida where the population base is. As we have more product here, we are going to have more cheese plants, more ice cream plants, more other similar processing plants just as seen in the beef industry. The dairy industry is going to bring their processing here to limit their transportation cost.
Ed Blackburn: Well, let me ask another question. How does one measure the size of a dairy operation? Is it measured in acres or cows?
Alan Rhodes: Dairy farms are measured in cows, primarily cows and milk and then you want to make the clarification as to whether or not there is also a young stock operation on site. The best producers will bring their young stock along so that they know the quality of their cows that are entering the herd and they know how to manage that animal.
Ed Blackburn: Well, it leads me to another question. How much land does a dairy farmer need to operate?
Alan Rhodes: A dairy farm can be on 80 to 160 acres if it is a 2400- to 3000-cow dairy. That does not take care of its affluent waste areas and you have got to apply that to affluent water primarily in our area through [unintelligible] sprinkler system. There is also an environmental easement that a farmer has to consider and that is what he does with his solid wastes. A farm, as they develop and as they are fully integrated, needs a few hundred acres of farm land to go along with the dairy facility. In that way, they can manage all their nutrients on the backside of the property.
Ed Blackburn: Well, I have limited knowledge of the dairy business and that is why I ask these questions. It sounds to me like a very efficient use of agricultural land.
George Clift: You come out here. We will take and show you 72 rotary stall where the cows will walk on it and by the time it makes a complete revolution, they are cleaned, there are other things, their milk is taken, [unintelligible] is applied and they back out. [Unintelligible]. It is a state-of-the-art facility.
Ed Blackburn: Another thing that occurred to me is to ask you, do these dairy farmers tend to develop near one another or are they just spread out across all that land up there?
Alan Rhodes: They are spread out today, although we are having some grouping that goes on. They like to have good neighbors and enjoy being close together because they are a very close-knit group of people. As far as nutrient management, they need to be five or six miles apart so they have plenty of room in between them to both acquire their feed, let me get my corn, let me get my wheatlage, let me get my alfalfa so that I do not have much in terms of transportation cost and also let me take my nutrients back to that land, help the crop farmer and help myself in terms of taking care of the environment.
Ed Blackburn: Well, gentlemen, Mr. George Clift, Mr. Alan Rhodes, thank you very much for your time. It sounds to me like the Panhandle has a very bright future ahead of itself and perhaps I can call back in several months and get an update from you.
Alan Rhodes: Feel free, Ed, to do that anytime. Our pleasure to be with you.
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