Bankers still have faith in dairy

After years of planning, Dan and Kari Dvorachek fulfilled a life-long dream of starting their own dairy this month. It took over a decade of hard work, strict financial planning, and lastly a business plan that a banker would approve even in these most difficult economic times. Everything came together this July when the Dvoracheks got financing to go ahead to purchase and renovate an 86-tie stall facility which also features 90 free stalls for heifers and dry cows.

Over 14 years ago, Dan started out as a herdsman for Manitowoc County dairy producers Randy and Rosalie Geiger (the parents of associate editor Corey Geiger). Two years ago, Dan, and his wife, Kari, became partners in the operation when they purchased 50 milk cows, along with some young stock and continued to house their cattle at the Geiger farm. From that point, the Dvoracheks began to build equity as their herd continued to grow. Late last December, an opportunity to purchase a dairy farm just three miles away presented itself.

That's when the planning went full steam ahead as the Dvoracheks met with a team of advisors who guided the young couple through the many steps needed to develop a workable business plan that would lead to the renovation and purchase of the facility. On Labor Day weekend, friends and family gathered for the final step of the plan which involved moving some 70 head of cows and 50 heifers. Equipped with a pair of trailers that held a total of 10 head per trip, the Dvorachek herd was calmly moved in five short hours. As the herd settles in, the new farm owners will make additional purchases to fill up their barn.

Attached to the blog are a few photos from moving day. The first two photos show the herd leaving their old farm; photo three shows Kari Dvorachek, while photo four shows her husband, Dan, at the new farm. The final two photos show cows at the new operation.

There is no place to hide financially

As Hoard's Dairyman editors, we have the opportunity to provide leadership to various dairy-related organizations. This week, one such organization held a conference call to discuss the best places to invest money. It is the same question everyone is asking given the current economic climate.

Market investments have been tracked in the U.S. since 1825. During that time, only two years have faired more poorly than 2008's performance . . . 1931 and 1937. Both of those years were during the Great Depression.

There were only two basic places to invest last year where people didn't lose wealth — cash and CDs. Everything else was a loser. Today’s historic low interest rates are no accident. We have reached the point where the government is basically telling people, "Pull your money out of the bank and invest it in something because we want money to move and get the economy flowing."

These historically low interest rates are great news for borrowers. One person on the conference call reported locking in a 15-year mortgage at 4.375 percent last Friday. Those were previously unheard-of rates.

One major mortgage house told us that the wait on mortgage phone lines was 1-1/2 hours. That's the good news. The bad news is 80 percent of the people on the line were interested in refinancing, while only 20 percent were new home loans. At least it is a start. Many market analysts predict the economy will continue to spiral down until home prices stabilize and the market excess is sold off. Unfortunately, it may be 2010 before we reach that point, analysts predict.