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thesis entitled

Dairy Farm Household SUrvival Strategies
in Michigan's Thumb Region

presented by

Aimee Gabrielle Vieira

has been accepted towards fulfillment
of the requirements for

M.A. Sociology

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DAIRY FARM HOUSEHOLD SURVIVAL STRATEGIES
IN MICHIGAN ’S THUMB REGION

By

Aime'e Gabrielle Vieira

A THESIS
Submitted to
Michigan State University

in partial fulfillment of the requirements
for the degree of

MASTER OF ARTS

Department of Sociology

l 996

ABSTRACT

DAIRY FARM HOUSEHOLD SURVIVAL STRATEGIES
IN MICHIGAN ’S THUMB REGION

By

Aimée Gabrielle Vieira

Dairy farm households respond to their unique access to capital, family labor, and
land within a matrix of local constraints. Prior research on dairying has focused on dairy
activities mainly as a function of cow numbers or acreage; however, these categorization
schemes privilege certain structural aspects of the family farm over others. I explore
alternative categorization typologies based on a longitudinal study of dairy farms in
Michigan’s thumb region. Possible alternatives for understanding the confluential
organization of farm family household and farm business are analyses based on milk
check dependency and family labor utilization. These alternative typologies suggest that a
number of household, land, and capital factors influence the size of the farm, particularly
in cow numbers, rather than the other way around. We should place greater emphasis on
creating multiple typologies to better convey the diversity of farm family experiences,

particularly in research utilized to inform policy makers.

ACKNOWLEDGEMENTS

I wish to thank all those who assisted me in completing this project. Most
importantly, I wish to thank the dairy farm families of Deckerville, Michigan without
whom this project would never have been possible. This research was funded through the
Michigan State University Agricultural Experiment Station.

Professor Harry K. Schwarzweller deserves recognition beyond what I can
possibly give him here for his patience, insightful criticism, and excellent guidance.
Without his support and encouragement, I would not have had the courage to undertake
this work, nor to see it through to completion.

I wish to give thanks as well to the other members of my committee, Steve Gold
and Marilyn Aronofl‘, who were there for me with cheerful and willing support in my
time of need.

Additionally, I wish to thank Pranab Rajbhandari, Elizabeth Ransom, and
Merideth Trahan, all of whom assisted in my defense preparation. My parents, Lou and
Sue Vieira, my spouse, Kevin Curow, and my long-suffering roommate, Karen Hartwig,

also saw me through the difi‘icult times, particularly the last few grueling days.

iii

Table of Contents

List of Tables ......................................................................................................... v
Introduction ................................................................................. 1
The Problem ................................................................................ 6
Methods of Research ..................................................................... 13
Study Site .......................................................................... 13
Field Work Procedures ........................................................... 14
Definitions ......................................................................... 16
Closing Dairy Operations ................................................................. 19
Closing Small & Medium Dairies .............................................. 21
Closing Large Dairies ............................................................ 22
Expectations in 1988 .............................................................. 23
Alternative Categorization Typologies .................................................. 26
The Milk Dependency Typology ................................................ 26
The Labor Categorization Typology ............................................ 32
Supplemental Labor Farms .............................................. 39
Family Labor Capacity Farms ........................................... 4O
Excess Family Labor Farms ............................................. 41
Substitute/ Supplemental Labor Farms ................................. 42
Children & Takeovers - The Future of the Dairy ....................................... 44
Operator Transitions ............................................................... 45
Concluding Remarks ....................................................................... 48

List of Tables

Table I. Structural Variables by Acreage Size Classifications ................................. 9
Table II. Structural Variables by Herd Size Classifications ................................... 11
Table 111. Structural Aspects of the Dairy by Milk Check Dependency ..................... 29

Table IV. Structural Variables by Employment and Labor Kinship Classifications. . . ...38

Introduction

Farm businesses and the farm family households that operate them are
interdependent, with the character of each influenced by the other. There are many
ways that families can relate to their farm enterprise, and modifications that can be
made to the farm enterprise so that it might better articulate with the resources and
needs of a farming family. How do we take account of this great diversity in how
farm businesses and farm households are interrelated in their organizational structure
within a particular farming sector like dairying?

Individual dairy operations are not socially isolated entities; they are closely
associated, and inextricably linked, with family households, local community
contexts, a particular marketing and collection system, a labor environment, a
climatological region: a virtual web of interconnecting opportunities and constraints
(see also Carlin & Saupe, 1993; Goldschmidt, 1946). So how do we
comprehensively study the range of organizational types of dairies in order to look at
these opportunities and constraints in a manner that can produce timely information
without unduly reducing the experiences of dairy farm producers to a single mean or
median figure meant to be indicative of the whole range of experience?

In many agricultural studies, size or scale of operation is the primary variable
used in creating a typology for analyzing variations within an industry. However, I
will explore other variables which suggest viable alternative categorization schemes

which help make sense of the confluential organizations of farms and farm family

households. There is probably good reason to focus on size as a major organizational
variable, as it can indicate indirectly the level of capitalization, help in estimating
total farm income, as well as total farm labor requirements, etc. Certainly size does
matter, but is it the only reasonable structural indicator of the organization of farms,
and in particular, family dairy farms?

While farm size in acres indicates capitalization level to a degree (some farms
rent more land than they own), what it really indicates is a certain perspective on the
part of the farm household, as they have chosen to work a certain quantity of land,
given their goals for the farm within the set of contextual constraints. Given the
nature of the data gathered in this study, it is impossible to talk about the results
without aggregating information, but in aggregating, assumptions are made that the
variety represented is either not important (raw aggregates), or important within
some sort of categorization scheme. I will construct categorization schemes which do
not depend on size or scale of operation as an explanatory variable.

This longitudinal study focuses on Deckerville, a single dairy farming
community in Michigan's agriculturally dependent thumb region. My aim is to take
account of the range of household and farm level organizational variations within a
single context of essentially similar macro-level opportunities and constraints. This
range of adaptations serves to highlight how the fortunes of farm and family are tied
together over time, within the conditions of a locality. While the particular range of
micro-level adaptations to the macro-structure in this dairying community cannot be

assumed to be indicative of the dairy industry on a national or even state-wide level,

it can be seen as suggesting directions for future research as well as issues for
consideration by policy makers.

Active, surviving dairy farms are allocating family resources within local
constraints to meet the needs of both farm and household units. I seek to understand
how the goals and organizational characteristics of the farm household and the farm
operation are interrelated within a particular context (as suggested in Evans & Ilbery,
1992: Flora, 1981: Janssen et al, 1993: Schulman & Cotten, 1991).

Within my study community, dairy farm families are organized in many
different ways. I will consider especially what I regard as some of the dominant
organizational variables and which, I hypothesize, are influential in establishing the
distinctive organizational characteristics of these family dairy farms. I'll consider
especially: differing uses of available family labor; practices of hiring non-family
labor; mixing dairying with other agricultural enterprises; and jointly operating a
dairy with another related household. Through a series of analytic typologies based
on structural variables, I develop an understanding of how the means of production
(focusing especially on land and labor) are utilized differently by farm families with
disparate resources at various life stages.

Defining family farms can be exceedingly difficult, and might not make
sense, given the small percentage of farmland that is operated by non-family
corporations in the United States today (Perez, 1994). For my purposes, a family
farm is an agricultural enterprise where ownership and managerial responsibilities

are both combined within a kinship grouping of one or more households, and at least

some of the operating labor is provided by family members. Given this definition, all
of the dairy farms within my study area are family farms.

F arnilies, and family based businesses, be they farms or other enterprises,
fulfill many needs. Given that I am interested in how family dairy farms organize and
utilize family resources, I will assume that the primary focus of a family dairy will be
economic survival, while recognizing that a family might persist in dairy farming
even when it is uneconomic to do so, for non-economic reasons. Additionally, I
assume that these families have some reason to operate a dairy and will attempt to
find a way of organizing their resources that makes it economically feasible to do so.

In the selected study site, Deckerville, Michigan, an agriculturally dependent
community, dairying is still very much a family affair where management decisions
are made by family members and not hired managers, as it is in much of the
Midwest, given the historical land settlement patterns (F riedberger, 1988: Neth,
1995). As a family operation, the organization and allocation of family resources to
dairying, to other agricultural enterprises, and to outside employment reflects the
situation of the family as well as the situation of the dairy (Evans & Ilbery, 1992:
Janssen et a1, 1993: Neth, 1995: Schulman & Cotten, 1991). Furthermore, farms
operated as family businesses must be assumed to be attempting to provide an
adequate level of income to fulfill the needs and wants of the household, through a
strategy dependent upon the available resources of that family unit.

How have Deckerville dairy Operators adapted to their local conditions since
1988? Some have stOpped dairying, others expanded. Some have hired more non-

family help, while some have sold out. Others have sought off-farm work in addition

to operating a dairy. All of these variations in their approaches to the economic
uncertainty and vacillations of the dairy industry can be referred to as "adaptive
strategies" (Moen & Wethington, 1992: Pile , 1991). Given the close relationship of
the dairy enterprise with the organization of the household in this community of
family farms, these farm adaptive strategies can also be considered as household
survival strategies. Farm household survival strategies refer to the changing
allocation of variable family resources within the constraints of agricultural
production, off-farm and other job opportunities, and the desires of individual
members to meet material and other needs of the farm, the household, and the
individuals of which these are composed (Gasson & Winter, 1992: Redclift, 1986:
Schwarzweller & Clay, 1991). As such, household survival strategies can be
indicated by structural components of the dairy farm, i.e. size and mix of land
holdings, off-farm employment activities, on-farm hired labor, investment in capital
inputs, changes in herd size, etc. My study seeks to specify some of the various ways
that dairy farm families in Deckerville organize and allocate their household
resources in particular household/farm survival strategies based on a pointed set of

structural indicators.

The Problem

In Deckerville, where soils are good and land used for dairying could
alternatively be used for cash crop production, using size or scale alone to indicate
the organization of the dairy is problematic. For example, a majority of dairy farmers
there also produce some cash crops for sale. What structural variable will we use to
indicate size/scale of the operation? If we divide operations on the basis of the total
number of cows on a farm, we might miss the true size of the farming operation,
particularly if it is also heavily involved in cash crop production. If we instead base
categories of size of operation on the total number of acres operated as a single farm,
we might classify as "large" farms milking only thirty cows. The question becomes,
if we rely on a size categorization, whether or not we are classifying the size of the
dairy or the size of the farm in acres.

This problem of choosing how to measure size and scale can best be
illustrated by presenting three Deckerville cases for consideration. In our study, one
farm owns and operates 760 acres, but only has 32 cows (lactating and dry). While
this farm is Operating a dairy, it is obviously qualitatively different from a
neighboring farm operated by an individual on 98 acres and milking 22 cows
seasonally, as well as qualitatively different in its organizational structure from
another farm on 820 acres, nmning a herd of 375 cows, with five hired hands; but,
depending on how we form our categories, the first farm could be classified with

either the obviously small dairy, or with the obviously large dairy.

Tables I & 11 give overviews of the differences between two different
categorization schemes. Table I shows gives a breakdown of relevant organizational
characteristics when we divide farms into categories based on acreage operated
(regardless of whether or not production from the land feeds dairy stock), and Table
I] show the numbers for these same organizational variables for a categorization
scheme based on total number of cows. Table I splits farms into small, medium and
large categories where the acreage ranges are respectively: less than 250 acres
managed, 250-500 acres managed, and more than 500 acres managed. Table 11 gives
a preliminary classification of dairies as small, medium and large, based on the total
number of dairy cows (milking and dry) on the farm is used to make these
observations. Herd size classifications are based on those divisions made in the 1988
study (Schwarzweller, 1992), where small farm had 45 or fewer cows, a medium
farm had 46 to 80 cows, and a large farm had more than 70 milk cows.

The two different categorizations give very different pictures of what is
happening in Deckerville, and neither gives a clear indication of the likelihood of
takeover. For example, in Table I, we find that half of large farms are operated by
more than one household. Coupled with the age of the operator, and the expectations
of children taking over, these would seem to be the farms that are most likely to be
passed on to the next generation. These farms are also the least dependent on income
from milk sales, and the least likely to have someone working off farm. Almost half
of small farms are not likely to be passed on to the next generation. However in
Table II, we find that large dairies are the most dependent on income from milk

sales, and are composed more often than other size dairies of single households,

TABLE I - STRUCTURAL VARIABLES BY ACREAGE SIZE CLASSIFICATIONS

Herd Size:
mean
median
range

# of Households

single
multiple

Total Farm
Work Equivalents

range

Age of Lead Operator

median

Household
Member(s)

Works Off-Farm

Acres Managed

mean
median
range

% Income

from Milk Sales

mean
median
range

Ten Year

Survival Expectation

positive
maybe
negative

Children

Takeover Likely

yes
maybe
no

All

83. 1
70.0
12-375

71.9%
28.1%

1.0-8.65

46

37.5%

380
439
6- 1030

84%
90%
33%-100%

63.2%
17.5%
19.3%

33.3%
42.1%
24.6%

TABLE I

Small
< 250
n= 15

48.9
38
12-98

86.7%
13.3%

1-4.15

42

53.3%

170.8
194
6-240

92. 7 %
95 %
70-95

60%
20%
20%

13.3%
40%
46.7%

Medium
250-500
n=22

80.5
73.5
26-275

81.8%
18.1%

1.4-5.25
45.5

36.4%

356.8
363.5
255-480

88.1%
90%
70-100

63.6%
18.2%
18.2%

31.8%
54.5%
31.8%

Structural Variables by Acreage Size Classifications

large
> 500
n=20

111.5
81
32-375

50%
50%

2.6-8.65

49.5

25%

731.8
737.5
510-1030

71.5%
75%
33-95

65%
15%
20%

50%
30%
20%

10

TABLE II - STRUCTURAL VARIABLES BY HERD SIZE CLASSIFICATIONS

TABLE II

Structural Variables by Herd Size Classifications

All Small Medium large
< 45 45-79 > 79
n=57 n=18 n=21 n=18
Herd Size:
mean 83.1 32.9 68.1 150.7
median 70.0 35.0 70.0 117.5
range 12-375 12-44 48-80 82-375
# of Households
single 71.9% 72% 62% 83%
multiple 28. 1 % 28 % 38 % 17 %
Total Farm
Work Equivalents
range 1.0-8.7 1-3.9 1.75-5.37 2.5-8.65
Age of Lead Operator
median 46 42 48 45
Household
Member(s) 37.5% 66.7% 28.6% 16.7%
Works Off-Farm
Acres Managed
mean 380 291 441.9 584.9
median 439 267.5 403 547.5
range 6-1030 6-760 160-1030 205- 1000
% Income
from Milk Sales
mean 84% 82.2% 82% 87.4%
median 90 % 85 % 90 % 90 %
range 33 % - 100 % 33- 100 50-98 60-95
Ten Year
Survival Expectation
positive 63.2% 50% 57% 83 %
maybe 17.5% 33% 10% 11%
negative 19.3% 17% 33% 6%
Children
Takeover Likely
yes 33.3% 28% 33% 39%
maybe 42.1 % 33% 48% 44%
no 24.6% 39% 19% 17%

12

which contradicts the findings for large acreage farms. While large dairies are still
the least likely to have a member of an operator household employed off-farm, they
are not so clearly expected to be taken over by children, which might indicate in part
that a majority of these farmers are in a particular life stage, having recently taken
over the farm and are busy raising young children. It is apparent that size does mean
something: if the farm has considerable acreage, it likely will persist as some type of
farm, is probably in the midst of a transition, and the household(s) do not depend
exclusively on milk for agricultural income; if a farm has many cows, it is likely
operated by a single household that is highly dependent on milk sales for its income,
but the family farm's outlook for the future is mixed.

In spite of the difficulties with each of these classifications, at times I will
rely on these categorizations in order to be able to process the information as has
been done before, and to illustrate certain limitations in various approaches to
expectations of farm continuation. In so doing, I will favor the categorization based
on the total number of cows, milking and dry, in a given dairy operation because I

am interested in the farm and family as a dairy and how it persists in milking cows.

Methods of Research

Study Site

In 1988, the Deckerville school district in Sanilac County was chosen by as
the site for a research project sponsored by the Michigan Agricultural Extension
Service. Information was collected on the composition of dairy farm households,
structure of the dairy business, adoption of various technologies, and the plans and
expectations of the dairy operators. This region is very dependent on agriculture and
Sanilac County has the largest concentration of dairy farms in the. state. The
Deckerville dairy farming community reflects rather closely the general structure of
dairies in Michigan, as determined by a 1987 statewide survey (Schwarzweller,
1992). The original case study in 1988 was meant to supplement information
obtained in this large statewide survey with in-depth information on the structure of
dairying in one community deeply involved in the industry.

Deckerville's good soils grow excellent cash crops and dairy forage. Warm,
humid summers with long days and comparatively moderate winter conditions, due
to the location near Lake Huron, give Sanilac County a comparative climatic
advantage for dairy production. The proximity to the Detroit and Flint markets
provides geographic primacy in the Detroit Metropolitan milkshed to Deckerville
and other dairying communities in Sanilac County, and the lower Thumb region in

general.

13

14

While close to Detroit, Deckerville is far enough away to not be experiencing
a large influx in population seeking to escape the city. As a result, agricultural use,
rather than residential development, basically determines land values. However, the
agricultural value of the land is high compared to other areas in the state with poorer
quality soils.

Today, dairy farmers in the region have multiple milk marketing options,
including MMPA (Michigan Milk Producers Association), NFO (National Farmers
Organization) and Lansing Dairy. While MMPA predominates, farmers are not
locked into a monopolistic marketing situation. Within these different marketing
options, the final price received by a farmer varies little and is at base supported by
the Federal Milk Marketing Orders (Benson, 1995).

In the summer of 1995, our research team returned to Deckerville, to re-
survey these dairies and to gather information on the changing structure of local
dairy operations. Our field work coincided with another statewide mail survey of
Michigan dairy farmers. In short, we sought to follow up the earlier pair of studies in
order to develop a picture of how dairy farms had responded to the changing

pressures and opportunities available to them.

Field Work Procedures

To identify the target population, we began with a map of the Deckerville
school district. A Sanilac County plat map and a listing of dairy operations licensed
by the state, obtained from the Detroit milk marketing administration, allowed

pinpointing of dairies within the district. All operators were notified by mail of our

15

impending arrival prior to the commencement of our study. Additionally, through
information gathered on-farm interviews, we were able to find former dairy operators
who had relocated, as well as new dairies that had opened after the list of dairies
inspected in the spring of 1995 was compiled.

In order to gather our information, we interviewed, either in person or by
phone, the principle operator or spouse of the principle operator for all dairies which
were operating in 1988 and for all dairies which were operating in 1995. Either alone
or with a co-interviewer, I interviewed approximately seventy five percent of these
farmers. Through diligent effort, we were able to obtain information on all of the
former and current dairy operators in the region‘. Fourteen dairies which were
operating in 1988 had ceased operations. Three new operations had started up, and
54 continuous operations were re-surveyed, for a total of 57 operating dairies and 14
closed out dairies. In 1988, the Deckerville school district had to 68 dairies. In 1994,
only 57 dairies were operating within the district, a reduction of about 16 “/0.

In all interviews, some information was estimated by the operators,
indicating perhaps how they view their operation, or to present an image as
particularly successful farmers. In a few cases, the numbers reported are less than

reliable, particularly in terms of herd averages. I have tried not to depend on

 

' 1n the course of our interviews, we encountered some cases where extracting information presented
particular challenges. For example, several of the farms are operated by Mennonites. We found that when
our female interviewers spoke with the women, they were able to easily obtain the requested information.
However, when the same interviewers spoke with male Mennonite farmers, the interviews were somewhat
more difficult and attitudinal information about plans for the future and opinions regarding various
technologies were not forthcoming. Nonetheless, we feel the information we were able to extract is, on the
whole, accurate.

16

variables with obvious reporting problems in considering the farm/household
organizational structure of individual farms.

Due to early confusion on the part of several of the interviewers, information
gathered on the presence of other stock on the farm must be considered unreliable,
due to inconsistencies in the understandings of the definition of dairy steers as non-
dairy stock. This information is not utilized in this study. Other measures of non-

milk agricultural income are available that make this information redundant.

Definitions

We measured farm labor inputs in terms of "work year equivalents", as in the
original 1988 study. The same guidelines were used to estimate work year
equivalents for all household and hired employees, be they seasonal, part-time or
full-time, kin or non-kin. The baseline work equivalent for a full-time farm worker
(40 or more hours per week, fifty weeks a year) is 1.00. Labor performed by youths
under 16 is discounted by a factor of 20 percent per year of age under 16, so that
work performed by children under 11 was not included in the computation of farm
work equivalents (For more information on the original construction on work year
equivalents, see Schwarzweller, 1992).

A11 coding of work year equivalents was performed by one person to ensure
conceptual uniformity and consistency of measurement procedures within the 1995
survey. Given that the same guidelines were used for constructing work year
equivalents in 1995 as for 1988, work year equivalents at both points in time are

considered as generally equivalent. The primary investigator for both research

17

projects verified the consistency of the equivalencies constructed for 1995 as
comparable with those constructed in 1988.

For the purposes of this study, we were interested in the total number of
households were involved as operator-managers and/or owners of the dairy. We
define households as literally discrete living quarters - adult children living at home
with their parents, while often involved in managerial decisions on the farm, were
not counted as additional households. One reason households are preferred, as
opposed to the number of operators/managers, is that the costs associated with
maintaining a separate residence, even if it is constructed on the farm on already
owned land, presents an expense much higher than the cost of meeting the needs of
an additional person living within an already occupied residence.

An owner household has some financial stock in the operation and may or
may not be involved in making daily operating decisions. An operator household is
directly involved, on a daily basis, in making decisions regarding the operation of the
dairy or farm as a entire unit. Farms with multiple operator households often split
primary responsibility for certain duties; i.e. one operator household is primarily
responsible for growing forage and other crops, another operator household is
primarily responsible for dairy barn operations. All of these multiple operator
households, even if primary responsibilities are split, will be considered dairy
operator households.

If one family owns and operates the dairy, we refer to it as a single household
operation; if two or more households are involved in managing the operation, it is a

multiple household operjation. Multiple household operations might consist of two or

18

more owner/operator households, or of one owner/operator household and one or
more additional operator households, and so on. Farm families arrange these
managerial and ownership responsibilities, as well as financial disbursement, in
myriad idiosyncratic ways which make further specification more confusing than

enlightening.

Closing Dairy Operations

Deckerville dairy farm families have adopted a number of different
patterns of allocating their farm/family resources of land, labor and capital, in order
to perpetuate the household and recreate daily life. In Deckerville, four main options
were observed: quitting dairying, working off-farm and continuing to dairy, dairying
with primarily family labor, dairying depending on hired labor. Within each of these
main options there are variations, particularly in terms of diversification through
cash cropping or beef production to reduce dependency on agricultural income
received from the sale of fluid milk. To understand these patterns, I devise categories
that allow me to focus on the various configurations of land and labor use, as they are
tied to available household resources and the local context. What are the particular
variables which indicate the range of management experiences of the farmers in each
of these four major categories?

The variables that I believe are indicative of the various patterns of resource
existence and allocation include: herd size; number of partner households; age of the
lead operator; off-farm employment of one or more adult member of a partner
household; percentage of farm income from milk sales; total managed acreage; and
expectations for survival in the next ten years. Herd size and acreage indicate to
some degree the utilization of capital resources, as well as the overall scope of the
operation; milk check dependency suggests how deeply specialized a farm is as a

dairy. The age of the lead operator, the likelihood of a takeover and the number of

19

20

households involved indicate approximately the life cycle stage of the farm, as well
as how many households depend, at least in part, on the dairy for income. Survival
expectation suggests the lead operator’s assessment of whether or not the dairy will
persist over time, an important indicator of the likelihood of closure. Whether or not
a farm has a partner household member employed off-farm suggests alternate income
and cash flow, as well as says something about the quantity of labor available to the
dairy, or the extent to which the households supply more labor than is necessary to
operate the dairy at a certain level.

The age of the operator and the total number of households involved in the
operation are important variables indicating how likely a dairy is to perpetuate itself
over time. Survival expectations provide an impetus for different types of resource
allocation: for instance, if I know none of my children are interested in the farm, 1
will probably not make major capital investments or buy additional land, especially
as I approach the age of retirement. How do I know that these variables are important
considerations for allocating family resources on the farm? Between 1988 and 1995
fourteen dairies in Deckerville ceased operations, and several are currently in the
process of closing out. By examining local cases of dairy closure and its
precipitating causes, the importance of interested progeny, total number of involved
households, and age of the operator in affecting the character and continuation of the
dairy becomes apparent. Through contrast, this will allow me a better understanding

of the strategies that farm families are using to keep their dairies open.

21

Closing Small & Medium Dairies - 80 or fewer cows

Of the 67 original dairies, 14 closed. Thirteen of these dairies were surveyed
in 1988. Seven of the dairies that closed were small in 1988; three were medium
sized; four were classified as large dairies. This suggests that perhaps the size of a
dairy does matter in some way, and we should be concerned with the future of small
dairy farms.

In nine cases of closure of small or medium sized dairies, the principle
operators either died, retired completely, or quit dairying and now rely upon cash
cropping for income. Five of these nine dairies had children or other family members
who could have been brought into the dairy operation, but who, for various reasons,
were not interested and had not been eased into the operation as a partner at an earlier
time. For three dairies, there were no close kin to bring in. One operation had
brought in a son as a partner, but the partnership broke up. When this happened, the
father retired completely from farming.

Of the ten small and medium dairies that closed, only one operator continued
in full-time employment. This individual does cash crop farming part time on the
land that used to support the dairy while simultaneously holding full time off-farm
employment. He closed primarily due to financial reasons, as he found dairying to
not be profitable in his situation. As an able bodied middle age male, he was able to
find off-farm employment which was more profitable than dairying and to
supplement that with part-time cash cropping.

Age is an important factor in terms of the timing of closing the dairy in these

cases. But in six cases, declining heath was stated as a primary factor in determining

22

dairy closure. Although declining health might often be expected to occur in
conjunction with increasing age, it cannot be assumed that this is always the case.
One dairy farmer died, and his widow closed the dairy. A secondary factor in the
timing of the closure for three dairies were financial needs that created demands to
re-deploy their capital, often related to the health problems of the lead operators;
however, the lack of interested kin played a role in all but one of the closures. This
suggests that the dominant correlates of closure of small and medium dairies are age,
declining health, and particularly the lack of a partner or family member to takeover
the dairy, rather than leaving the market strictly because smaller farms are not
profitable. By considering age, multi-operator status, and takeover expectations, we

should be able to get a sense of where a current dairy is in its life stage.

Closing Large Dairies - 81 or more cows

Four dairies which had more than 80 cows in 1988 had closed by 1995. The
circumstances surrounding closure in three of these cases were different than those
for the small or medium sized dairies. In three of the four cases, the dairies had
multiple operators or partners. In the one case of individual owner/operatorship, the
dairy farmer's failing health led to a hospitalization and made it difficult for him to
oversee his operation. Even though the operation was large, his son was not
interested in the dairy, so the farmer retired and closed his dairy operation. This
closure mirrors what was observed in the small and medium sized closed dairies.

In the other three large dairy closure cases, a catastrophic event acted as a

catalyst which led to the closure of the dairy. The propensity for farmers to have

23

accidents and the size of a farmer's operation might have a relationship (see Perrow,
1984). In these cases, the injury or death of an partner operator caused an unexpected
financial hardship which contributed to the closing of the dairy. Due to the size of
these farms, when one partner was disabled or died, the remaining partner(s) would
have had to hire help to replace the labor of the unavailable partner. This, combined
with the costs associated with the catastrophic event, makes it difficult to continue
dairying. These former large dairy operators all are employed firll time, several of

them in non-dairy farming enterprises.

Expectations in 1988

Expectations of survival likely play a role in a farm family's determination of
how to best invest their resources. By comparing expectations of closed dairies
while operating in 1988 with those dairies from 1988 that are still in operation, we
can see how well farmers predict the future of their farms, as well as how they
behave, given their expectations for farm survival. Of the closed dairies, 36.4% of
the operators expected to close. Only 5.6% of operators who were producing milk in
1995 expressed an expectation of impending closure in 1988. None of the closed
dairies were expecting to increase their herds; 25% of the currently operating dairies
surveyed in 1988 were expecting to increase. This indicates that these closed dairies
were not at all expansionary, and suggests that a decision had earlier been made
regarding operating capacity and the likelihood of the dairy being taken over by a
family member. This gives further evidence of the importance of kinship in

perpetuating dairies in this area.

24

Age, an especially important factor in the closing of smaller dairies, provides
evidence of where these farms were in the life cycle of the operator family, as does
the total number of households involved in the operation. In 1988, the median age of
the male lead operator was 58.5 years for dairies closed by 1995, much older than the
44 years of those dairies surveyed in 1988 that were still operating in 1995. More
closed dairies were operated by a single family, 84.6%, than by family partnerships.
For farms operating in both 1988 and 1995, only 63.2% were single family
operations in 1988. This makes sense when we consider how few of the operators of
closed dairies expected a family member to takeover the operation. By considering
the age of the lead operator, in conjunction with the number of operator households
and the expectations for survival, we can identify those farms which are in the midst
of organizing their resources in order to perpetuate the farm.

Dairies close out for a number of reasons; of these, the lack of someone to
take over the operation seems key. This is so for small and medium size dairies,
where age and health, combined with a lack of an interested son, daughter or other
family member, became factors in the timing of the closure decision. Had someone
been interested, it seems likely that the farm would have experienced a generational
transfer instead of a closure at this point. In fact, twenty seven of the farms operating
in 1995 had undergone some sort of operator and/or ownership transition since 1988.

While it appears that smaller farms are less able to interest family members
in becoming involved, dairy size alone does not appear to determine the likelihood of
closure. For instance, one large dairy did not interest an otherwise available child, for

whatever reasons. In a few cases, a generational transition or sale failed, which led

25

to closure of the dairy, so interest alone might not be able to overcome the
managerial and personality difficulties of a family operated dairy farm (F riedberger,
1988; Gasson & Errington, 1993; Neth, 1993). Size appears to be a complicating
factor, not directly indicative of the likelihood of transition. It seems rather that dairy
closures are more complex than just a "disappearing middle" or the "demise of the
small family farm". Within family farm transitions obviously play a huge role in
determining what happens to dairy farms in Deckerville, whatever the size of the
operation.

Even dairies in partnership situations with younger operators are in danger of
closing out in the event of an unforeseen catastrophe. The fortunes of farm and
family are very closely linked, and it might be impossible to separate the two in the
Deckerville area. So, age, health, the likelihood of a generational transfer, and the
financial resources to be able to persist should accidents occur which require
replacing household labor with hired labor all seem to be the dominant correlates of
the farms which closed out. Expectations for survival and takeover indicate the
mindset of an operator, which likely influences managerial decisions regarding the
allocation of land, labor, and capital. Size acts as a possible indirect indicator, and
might be related to the ability of the older generation to interest the younger in
perpetuating a smaller, less prestigious operation, with lower levels of operating

income.

Alternative Categorization Typologies

If we consider the prior discussion of Tables I and II, we see that relying on
size categories doesn't really allow us to understand very completely the
organizational confluence of farm and family on dairy farms in Deckerville.
Certainly it does not adequately account for dairy closures, nor does it indicate a
family's expectation of farm survival. In the earlier example as well as in Tables I
and II, regardless of how we classify the dairies/farms by size, we don't have an
adequate understanding of the dependency of the farm on income from the biweekly
milk check. This study asked farmers to estimate the percent of farm income
generated annually from fluid milk sales. Farms varied tremendously, eaming
anywhere from 33 to 100% of their total farm incomes from milk sales, regardless of

herd size. This variation suggests the first alternative categorization typology.

The Milk Dependencv Tvnology

One alternative to describing these dairy farms as small, medium or large, in
acreage or in number of cows, is to consider them as more or less dependent upon
income produced through the sale of fluid milk. The discussion regarding the
problem of classifying dairies by size for analysis suggests this alternative as a
possible third path, categorizing farms in terms of their dependency on the bimonthly
milk check as a percentage of total farm income, instead of on total acres managed or

total cows. A colleague has remarked that those dairy farmers who are substantially

26

27

diversified into crop or beef production have not yet decided whether they want to be
dairies, i.e., they are not committed to dairying. So, it would seem that the extent to
which a particular farm specializes in dairying is a major indicator of its
organizational structure, that is, given the specific familial and locality constraints.

In Deckerville, dairying specialization is very high. Thirty four farms receive
90% or more of their farm income from their milk checks. Nearly sixty percent of the
dairies are highly dependent on their bimonthly milk check as their dominant
primary farm income source. While milk sales percent represents how dependent a
farm is on the sales of its dairy product, it doesn't indicate whether a farm has income
generated through off-farm employment by a household member. Milk check
dependency alone is not a good indicator of the total income of the household, but it
does suggest to what extent a farm is committed to and dependent upon dairying.
Table 111 indicates the percentage of farm income that is derived from milk sales,
split into three categories: less than 70%, 70% to 89%, and 90% or more.

While the range of dependency on the milk check is high, relatively few
farms operate a dairy as only one of several major sources of farm income. Only
seven farms operate dairies and receive less than 70% of their farm income from
milk sales. A middle group of fifteen dairies receives a modest income from non-
dairy on-farm agricultural pursuits, with the milk check supplying 70 to 89% of their
farm income. The largest group are definitely specialized dairy operations, earning
90 to 100% of their farm income through the sale of fluid milk. Those farms which
are less dependent on milk for their agricultural income can be seen having diverse

sources of agricultural income.

28

TABLE III - STRUCTURAL ASPECTS OF THE DAIRY BY

MILK CHECK DEPENDENCY

STRUCTURAL ASPECTS OF THE DAIRY BY MILK CHECK DEPENDENCY

Farm Size:
small: <45 cows

medium: 45 < X < 80 cows

large: > 80 cows

# of Households
single
multiple

Total Farm
Work Equivalents
range

Acres Managed
mean

median

range

Age of
Lead Operator
median

Household
Member(s)
Works Off-Farm

Ten Year

Survival Expectation
positive

maybe

negative

Children
Takeover Likely
yes

maybe

no

n= 7
<70%

28.6%
57.1%
14.3%

42.9%
57.1%

2.6-5.37

698.6
650
5 10- 1030

51

28.6%

42.9%
28.6%
28.6%

42.9%
42.9%
14.3%

29

TABLE III

70%<X<90%

n= 15

46.6%
26.7%
26.7%

73.3%
26.7%

1.4-3.14

539.8

160-1000

52

33.3%

60%
26.7%
13.3%

53.3%
13.3%
33.3%

11: 34
>89%

26.5%
35.3%
38.2%

76.5%
24.5%

1-8.65

340.6
310
6-940

42

41.2%

67.6%
11.8%
20.6%

20.6%
55.9%
23.5%

30

While the number of farms that have diversified their agricultural production
is small, many of these farms are multiple household operations. We surmise that
many of these farms are in a generational transition. While their survival as dairies in
the next ten years is not certain, these operations will likely still be farmed in some
fashion by a family member. Possibly the diversification of production serves to
attract family members into the operation, or perhaps the operation is diversified in
order to better support more households, since these farms are also the least likely to
have someone employed off-farm. Regardless of the sequence, the production of
milk as one of several main sources of agricultural income indicates a tmique type of
farm in the Deckerville area; one that is unique for its diversification rather than for
the size of its dairy operation.

While farms with alternative agricultural production are not very likely to
have someone employed off-farm, dairies that are highly dependent on milk as their
main source of agricultural income are more likely to have a family member working
off the farm, particularly when they consist of more than one household. The more
dependent a farm is on its milk check, it seems, the more likely there is someone
working off farm, particularly if there are multiple households engaged in operating
the farm. In these cases, given the capital and land resources of the farm and family,
that there is either a need for more income than the farm can produce, or there is
more family labor than the farm can employ. Therefore, off-farm employment might
also be a dominate correlate of the confluence of farm and family, especially when

considered in conjunction with milk dependency.

31

Some type of diversification seems to be a dominate correlate of multi-
household farms, whether it be through diversification of agricultural production or
through off-farm employment. Such diversification might allow pressures of intra-
familial management to be somewhat relieved through alternate spheres of influence
and regions for the expression of personal power. Furthermore, diversifying the
products of a farm can be seen as a form of hedging against uncertainty in any single
market. Thornton (1994) writes, "dairy farm households who have opportunities for
outside employment use off-farm work to buffer agricultural income shocks that
arise from exogenous changes in prices and policy actions." Given the distinct state
of legislative uncertainty in dairying, and all farming for that matter, I would expect
a great deal of hedging by farmers in those regions where alternative land usage
and/or employment opportunities exist.

While both agricultural diversification and off-farm work can be seen as
forms of hedging during times of uncertainty, both of these activities also seem to
have a relation to the number of operator households involved and to one another.
Relatively few farms pursue a strategy of triangulation, that is, cropping and/or
livestock production combined with the off-farm employment of an adult member of
an operator household. Perhaps there is a relationship about the type of resources
available to partner households and the type of hedging they prefer. The differences
in land farmed suggest resource scarcity and capital limitations on the choice of
strategic options; a family farm with less land is better off to hire out its excess labor
rather than hire in the quantity of extra land necessary to earn a larger percent of its

farm income from non-dairy sources. This is possibly due to two things: the

32

relatively high values and rent costs of land in the area, as well as to the general
unavailability of additional arable land not currently in production (some good land
has been made unavailable due to government soil conservation programs); and the
availability of reasonably good paying jobs within commuting distance. In other
words, farm families with larger capital holdings are less inclined to proletarianize a
member of an operator household as a wage laborer, indicating an almost Marxian
stratification within the dairy industry itself, as suggested in Gladwin & Zulauf
(1989)

The importance of dependency on milk sales as a percentage of total farm
income becomes relevant when considering both off-farm labor and number of
households, as well as acreage owned, so that we see farms are not pursuing a
strategy of triangulation of resource allocation (land for cropping, dairying, and off-
farm employment), but rather they are using strategies of duality; of cropping and
dairying, or of dairying and working off-farm. This suggests that there are firrther
sorts of limitations on the different allocations of resources a farmly can choose,
indicated by the values of the variables of milk dependency, off-farm labor, total

number of households, and owned acreage.

The Qbor Categorization Typglogy

 

Dairying is a labor intensive enterprise, and in Deckerville, the majority of
labor employed on dairy farms is either from the lead operator's household, from a
partner operator's household, or somehow related to a partner household. Perez

wrote, "The degree of specialization in dairy farming in most of the traditional milk-

33

producing States, particularly in the Northeast and Upper Midwest regions, can be
linked to the availability of family labor" (1994, p.9).

This emphasis on labor, and who does the work (hired vs. family), has been
cited in various definitions of family farms (Gasson & Errington, 1993). When a
farm family member works off-farm, family labor available for dairy production and
other agricultural production is reduced, assuming that the individual was willing to
engage in some dairy work prior to seeking employment off-farm. If the farm is
small enough, this has little or no impact on the hiring of labor. When a farm is large
and someone works off-farm, generally labor must be hired to substitute for this
potential family labor which is otherwise engaged (for whatever reasons). If a farm is
large, and no one works off-farm, there might still exist a need to hire supplemental
labor. Whether or not a farm hires help will be in some way dependent on the overall
size of the operation (whether it be dairy or cropping or livestock production), as
well as dependent on the total number of households and individuals within
partnered and related households available to provide family labor. A typology based
on hiring non-kin labor and on the occurrence of off-farm employment for a primary
family member might well illustrate differences in the organizational structure of a
farm.

How might it do this? Well, having hired help, particularly non-kin hired
help, indicates a need for a higher level of management skills and bookkeeping
responsibilities, as we were often told, "good hired help is hard to find", and hard to
keep. Working off-farm indicates that there is non-farm cash flow into a family,

which may or may not supplement the farm, but which certainly contributes to the

34

well-being of the family. The availability of non-farm income to farm and family, as
well as not needing to spend money hiring labor, might contribute tO the ability Of a
farm to persist in times of crisis or great uncertainty, as we saw some former large
dairies were unable to do.

Dairy farmers, almost by definition, have to be full-time, year-round farmers,
regardless of the size of the operation. Dairy husbandry requires an extensive,
perpetual labor commitment, regardless of the status of a cow as in milk or dry. The
proliferation of research on dry cow management alone serves to emphasize the
continual management and labor required to successfully operate a dairy (see Byers,
1994; Hogan et a1, 1994; Moss, 1988).

Additionally, many Deckerville dairies hire at least some help, either on a
temporary seasonal basis, or as regular full and part time workers. While dairy farms
vary radically in terms of scale of operation, none can truly be called a part time farm
in that the time required to Operate a dairy at any level of commercial production will
require essentially 40 hours over the course of a seven day week. Apparently, labor
availability and the allocation of labor resources, both family and non-kin, provide
particular sorts Of constraints on dairy farms and certain patterns of utilization Of
these labor resources that are relevant, just as there are relevancies to the patterns of
capital utilization as seen when focusing on classification by herd size or acreage.

Furthermore, research into off-farm employment by all agricultural operators
and scale of operations (Fassinger & Schwarzweller, 1982) has indicated that Off-
fann employment Of the female spouse is correlated with larger farm size. The same

does not appear to hold true for dairy Operations, in Deckerville or in Utah

35

(Thornton, 1994). This suggests that the additional element of partner household
member non-farm employment needs to be explored as a possible structural indicator
Of the farm/family organizational confluence, as well as suggests a need for a greater
elaboration Of off-farm employment by dairy farm operator households. While other
research has found a gendered aspect to this, I have not explored it fully within this
study, due to the fact that male operators from only six farms work Off-farm. In line
with these earlier studies, all six of these sending farms are small to medium in terms
Of both cows and acreage. In Deckerville, this occurs, with only one exception, in
farms with multiple Operator households.

Oftentimes, kin labor is hired as a preliminary to bringing an individual
into the operation as a partner, as several Operators expressed. It is not uncommon for
an adult child to be given a full time salary for her work on the farm, generally with
the understanding that the child will eventually become a full partner in the
operation, pending her continued interest. Parents often continue to work on the dairy
after "retiring" and handing control of the operation to their offspring; in order to
draw social security, there are limits tO the amount of compensation they can receive
for their active labor participation on the dairy. However, we classify these
individuals as "hired" if they receive some cash compensation but do not participate
as a managing partner in the dairy operation. Rarely does a non-kin hired hand
become a partner on an Operation, although they might be given the Opportunity to
buy out an operator should no relative be interested. Therefore, distinguishing

between kin and non-kin hired labor becomes important tO understanding the labor

36

utilization Of a dairy farm, as does assessing the articulation of labor hiring practices
and Operator Off-farm employment practices.

For determining the dependency Of farm on family labor, we figured the non-
kin work equivalents per farm’. Clusters in non-kin hired work equivalents per farm
are observable in the data. This is not unexpected, given the widespread practice Of
hiring temporary help, generally teens to help with haying, in a region notable for the
preponderance of moderately large acreage family farms. Forty Deckerville dairies
hired no more than .50 non-kin work equivalents; seventeen dairies hired more than
.50 non-kin work equivalents.

This hired help can be considered either as supplemental help or substitute
help; that is, supplemental help is the amount of labor necessary to operate a farm at
a given level beyond the amount that the household is willing and/or able to provide,
and substitute help is necessary labor hired to replace the potential family labor left
unfilled when a member of an operator household works off-farm. Also, a farm with
enough operator households might have excess household labor which is not needed
to operate the dairy, in which case Off-farm employment does not detract resources
from the operation of the family business. A farm in this position might still choose
to hire labor occasionally, possibly to perform those tasks the operators find
distasteful, or merely as relief during vacations or other brief work stoppages.

By considering the presence of hired labor in conjunction with whether or not

an adult in any Operator household works Off farm, four interesting arrangements of

 

2 1 non-kin hired work equivalent equals 40 hours per week, 50 weeks a year, performed by individuals not
related by blood or marriage to an Operator household.

37

TABLE IV - STRUCTURAL VARIABLES BY EMPLOYMENT AND

LABOR KINSHIP CLASSIFICATIONS

38

TABLE IV

Structural Variables by Employment and Labor Kinship Classifications

Herd Size
mean
median
range

Age of Lead
Operator
median

# of households
single
multiple

Total Farm
Work
Equivalents
range

Acres Managed
mean

median

range

% Income from
Milk Sales
mean

median

range

Ten Year

Survival

Expectations
positive
maybe
negative

Children
Takeover Likely
yes
maybe
no

Supplemental
Labor

nonkin we > .50
no Off-farm work
11 = 12

163.8
137.5
74 - 375

45

67%
33%

3.54 - 8.65

589.3
592.5
194 - 1030

84.2%
90%
50% - 95%

83%
8%
8%

50%
50%

Family Labor
Capacity

nonkin we < .51
no off-farm work
11 = 24

65.6
67.5
32 - 105

49

79%
21%

1.66 - 3.92

440.6
414.5
120 - 800

81.4%
90%
33% -98%

67%
21%
13%

38%
46%
17%

Excess Family
Labor

nonkin we < .51
1 or more Off

n = 16

40.4
35
12 - 80

43.5

56%
44%

1.00 - 3.80

301.3
247.5
6 - 960

86.4%
92.5%
50% - 100%

44%
19%
38%

19%
31%
50%

Substitute/
Supplemental
nonkin we > .50
1 or more Off

11 = 5

109.6
83
6O - 210

42

100%

2.50 - 6.85

516.4
452
320 - 940

85%
92.5%
60% - 95%

60%
20%
20%

20%
40%
40%

39

labor allocation can be considered. 1 call these four arrangements: Supplemental
Labor Farms, F arnily Labor Capacity Farms, Excess Family Labor Farms, and
Substitute/ Supplemental Labor Farms. However, we must never assume that family
labor employed off-farm would be willing to be employed on-farm to any degree.
Any family member might refuse to participate in the farm business, but if all decide
to not participate, a cessation of farm activities results. Off-farm employment Of a
household operator does not necessarily contribute to the economic well-being of the
farm; however, I presume that some economic benefits devolve to the family or
household. What is important in assessing this confluence of farm and family, is
recognizing the implications of Off-farm employment on dairy farm persistence and
as a strategy for coping with an uncertain future. Employment, like farm production

diversification, is a form Of hedging against shocks and uncertainties.

Supplemental Labor Farms - Net Labor Buyers

I now consider farms which hire much non-kin labor, and where no Operator
adult member of the household works {Off-farm (see Table 111). These farms Operate
at a scale beyond the willing and able labor resources of the operator households and
consequently must hire supplemental labor. They are essentially large dairies with
large land holdings and high labor requirements, which expect, without exception,
that some family member will likely takeover the farm as a dairy. These farmers
have an expansionist orientation; they have made major capital improvements in the
past seven years, and plan to continue doing so. The lead operators of these farms are

generally middle-aged, with children not yet Old enough to brought in as partner

40

Operators, but with the expectation that one or more Of the children will eventually
take over the farm. Only a third of the supplemental labor farms are Operated by
multiple households; this can be attributed to the age Of the lead operator, i.e. the
children are too young to become full partners. More Of these farms will likely
become multiple household farms in the next ten years. Furthermore, several Of these
farms have only recently completed a generational transition. Of all the family farms
observed, supplemental labor farms appear to be the most secure in their future, but

they are among the most vulnerable to changes in the availability and cost of labor.

Family Labor Capacity F arms - Not in Labor Market

A different type Of farm also does not have any adult Operator household
members working Off-farm, but they are not hiring notable quantities of non-kin
additional labor. They are Operating at capacity, fully utilizing available family labor
resources, without incurring the costs of hiring non-kin employees. According to
Perez (1994), we should expect to find these farms to be less diversified than farms
with less available family labor, and more specialized as dairies. This is not the case:
these farms are the most diversified into other agricultural enterprises. Operating at
high levels Of uncertainty for the fixture, they have made some capital investments in
the recent past, and expect to make some more non-major investments. They have
enough land available to diversify; yet, by not increasing the herd to consume the
capacity of the land, they have limited their capital investment and improved their
protection from market fluxuation in any one product. Through diversification and

refraining from investing their capital too intensively in a singular option, they might

41

be financially the best prepared of all dairy farms in Deckerville to cope with

uncertainty. These farmers are hedging their agricultural bets.

Excess Family Labor Farms- Net Labor Sellers

Excess Family Labor farms also do not hire much non-kin labor, but at least
one adult member of an Operator household works Off-farm. These farms can be seen
as having excess family labor; that is, more family labor than is needed to operate the
farm at its current size. Not only do they not need to hire workers to replace family
labor employed Off-farm, they have so much family labor that it is likely that they
need the Off-farm income in order to maintain all Operator households. As a group,
they are the smallest dairies, and yet have the highest proportion Of multiple operator
households. They are also the most dependent on family labor, and the most
dependent on their milk checks for farm income. Even though these are small dairies,
dependent on their milk check, there are signs that at least some of these will persist,
given the number of multiple partners and the fact that the Off-farm income might
help protect these farmers from temporary crises. These families have decided that,
within the constraints Of land availability, the best strategy for their households is
off-farm employment for some family members. Because they are not fully investing
their family labor resources in the farm, they have less need to diversify their
agricultural income source as a hedge against uncertainty. Their hedge is wage

employment.

42

Substitute/ Supplemental Labor Farms - Labor Sellers & Labor Buyers

Not all farm family members are interested in working on the dairy. In five
cases of large dairies, the wife works off-farm. Even with the addition of her full-
time labor, the farm would need to hire additional help, so they are net labor buyers.
However, the amount Of hired labor would be smaller if the wife's labor was utilized
on farm. This certainly indicates that there are non-economic decisions at play in
deciding whether or not to work Off-farm, as seems to be consistent with findings on
women's off-farm work and farm size when not controlling for agricultural sector
(Fassinger, 1980; Fassinger & Schwarzweller, 1982).

It is interesting to consider the suggestion by Thornton (1994) in regards to
his findings that a negative relation exists between dairy farm size and Off-farm wage
employment by members of an operator household: "Indeed, these farms may derive
non-pecuniary benefits from involvement in self-employment agricultural activities
and therefore choose to make the bulk Of their income, work, and leisure adjustments
through alterations in wage employment." However, the converse seems at least
occasionally true: the existence of these five large farms where someone works off-
farm suggests that individuals might derive extra-pecuniary benefits from
involvement in off-farm wage labor. In fact, one of these farm wives stated that she
would "go nuts" without her part-time Off-farm employment, as she was a "city girl",
who has made it a point to expose her daughters to city life and urban cultural
activities.

Labor resources and the allocation Of these resources on and Off-farm indicate

how dairy farms utilize their available resources within the context of available land

43

and the costs of capital improvements during an uncertain period in order to
perpetuate the farm and family. Decisions are made, probably relating to income
needs, available land holdings, and personal desires, that influence the structure Of a
dairy farm and provide limitations tO the potential scope Of an Operation. Families
with many resources developed and plowed into the farm and willing to hire non-
family labor expect takeovers and predict survival Of the dairy. Families with non-
farm employment have invested fewer of their resources on the farm as the source of
economic survival and express greater insecurity about the future of the farm.
Analysis by size alone does not illustrate the extent to which decisions operators
make about utilizing family labor sources on or off-farm structures the range of
probable expansion decisions and the likelihood of perpetuation of the farm and

dairy.

Children and Takeovers - The Future of the Dairy

The presence of progeny interested in taking over the farm decreases the
likelihood of closure of a dairy. However, these periods of transition, when a dairy
might be called upon to support an additional household or two, create a situation
where the dairy's labor resources often outstrip the capacity of the available land and
capital to employ that labor. When more than one household is being supported by
the farm, the financial position Of the farm becomes precarious, due to the increased
pressure upon the its resources. Thus, it is important to note how the presence or
absence of multiple households might create a situation where resources must be
allocated differently in order to assure the continuance of the farm. In understanding
the organizational characteristics of family dairy farms, variables which indicate the
likely occurrence of transition or its actual occurrence are probably the age Of the
operator, the likelihood of progeny being brought into the operation, and the number
of Operator households involved in the Operation. Off -farm employment and milk
dependency indicate a dairy farm family's household survival strategy during the
transition period: they make choices regarding land use, labor employment and
capital investment in managing their resources during times of increased demand on

farm income.

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Operator Transitions

In the seven years from 1988 to 1995, we Observed three major types of
changes in the people who are operating the dairies. Twenty two of the dairy
operations experienced an Operator change. These were Often accompanied by
changes in ownership; occasionally ownership change did not affect who was in
charge of the dairy. Five dairies are persistent partnerships, that is, the dairy has not
changed hands between 1988 and 1995. These multiple household Operations, if
generational rather than sibling partnerships, can be seen as transitions in process,
which have yet to mature.

Generational transfers are completed when the father no longer participates in
the day to day Operation and management Of the dairy. He might still help out around
the farm, but he is no longer involved in major decision making. A total of nine
dairies completed generational transfers between 1988 and 1995, of which two are
small, two are medium, and five are large. While bigger dairies have been more
successful during the past seven years in completing transitions, seven dairies
initiated transitions during this period; only one of these farms is a large dairy.
Without this longitudinal information on the initiation of partnerships, bigger dairies
would seem to be better, in terms of attracting the younger generation.

A non-generational transition occurs when an Operator who is not the father
departs the dairy or when a dairy is sold outside the family. These are Often
generationally unexpected. The father normally leaves the business when he reaches
a certain age, preferring to retire or at least to hand over the daily Operations to a son

or other partner. When a son or other relative leaves for reasons other than

46

retirement, the dairy undergoes a non-generational transition. Seven dairies (1 small,
3 medium and 3 large) experienced non-generational transitions from 1988 to 1995.
These operator and ownership transitions are major factors in the life cycle

of the dairy farm/family operation. The presence or absence of a younger generation
willing to take over plays a major role in determining whether or not a dairy farm
goes out of business or persists or is sold, as well as affects the structure of the
allocation of capital, land, and labor resources. The process of transition represents a
time of extreme financial strain on a dairy, and in the sixteen cases where a dairy is
Operated by multiple partners, 43.8% of the farms have someone working Off-farm.
For single household dairies, only 32.5% of farms have someone employed Off-farm.
Multiple household dairies are also less likely to be heavily dependent upon their
milk check: 50% receive less than 90% of their farm income from dairying. For
single household farms, only 35% of farms receive less than 90% Of their agricultural
income from dairying. This further reinforces the notion that multiple household
farms, with their greater labor availability and greater demand for income, chose to
allocate their excess labor to diversify their sources Of income, rather than just
expand the dairy in order to employ this extra labor. How they choose to allocate that
labor in agricultural diversification or off-farm employment is in part determined by
access to additional land, as well as the availability of Off-farm jobs.

Obviously dairy farms must attract the next generation, either from within the
family or outside, in order to maintain continuity. Periods Of intra-familial transition
strain the capacity of a farm to survive as a viable enterprise of that family, given the

available household resources and increased income demands. When farms are trying

47

to secure their future, they tend to hedge and diversify their sources Of income, either
agriculturally in off-farm wage employment. While larger farms seem tO be more
likely to entice family members to join the Operation, it is the organization of family
resources of land and labor which allow these farms to be transferred from
generation to generation successfully, regardless of the size Of the farm. Structural
variables of size, age Of the Operator, milk dependency, number of involved
households, Off-farm employment, and the likelihood of takeover by progeny all
serve to help identify the various patterns of resource allocation which are being

utilized by Deckerville dairy farmers in their farm and household survival strategies.

Concluding Remarks

By considering the web Of experiences within which a dairy locality is
enmeshed and considering the various existing household/farm/labor relations, I have
constructed a set of alternative typologies to facilitate my exploration Of how dairy
farm families in one area utilize their resources to sustain the associated households.
Commonly used categorization schemes that focus on number Of cows or total farm
acres are inadequate for exploring how families structure their agricultural activities
and non-agricultural employment. These categorizations give mixed evidence Of a
relationship between size and farm perpetuation that cannot be understood in this
context. However, when alternate categorization schemes are introduced, the
relationship between age of Operator, farm labor organizational structure, and the
likelihood of takeover, suggest a life cycle in family farm operations which is based
on the differential utilization over time Of available capital resources, family labor,
off-farm employment Opportunities, and availability of arable land. This suggests
that the categories we use to analyze a phenomenon circumscribe the set of relations
which might emerge as relevant.

Analysis by size Of operation hides the amount of hedging going on, and the
different possible motivations for such hedging. In my analysis, farmers seem to be
hedging their bets, reducing their risk exposure, rather than increasing the size of
their operations. Diversification in income source, either through off-farm work or

through farm production diversification, seems to develop at some point during the

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course of a generational transition. Since generational transitions are how dairy farms
tend to perpetuate themselves, federal and state policies need to ensure that
Opportunities for diversification are widely available during times Of generational
transition on individual farms. Policy forrnulators need to be aware Of this
diversification of risk on the part of farmers, which at least in part can probably be
attributed to regulatory and market uncertainty, and take strides to address those rural
issues which might allow farmers to hedge more easily, such as expanding off-farm
employment Opportunities, ensuring reasonable wages, promoting alternative land
uses and conservation practices, or activating set-aside land during intra-familial
transition periods. Educational support for agricultural labor training, promotion of
farm labor as an attractive career choice, and government funded benefit programs
(such as universal health insurance) might improve the availability and quality Of
labor for those farms with hired help.

Even in Deckerville, land is generally less available than jobs and it requires
a capital investment, restricting the opportunities for diversification for farm families
with less access to land. Imagine if land used for dairying could not be used
efficiently for other agricultural production, if there were few opportunities for Off-
farrn employment, and that most of those jobs were seasonal and/or low-paying, but
the legislative conditions were the same, and the governmental regulations the same,
the uncertainties were all the same, but the circumstances in which the farm family
had to reproduce its daily life Offered fewer opportunities for hedging? This might be
the case in the Upper Peninsula of Michigan. Further research in a region less

amenable to other types of farming, with fewer opportunities for Off-farm

50

employment, might yield good information about how farm families organize their
collective resources to survive in such situations, as well as suggest further needs
which policy should address. The result is a picture Of dairies under strain, yet
fortunate enough to be located in a region where alternate land uses and off-farm
employment opportunities exist. Given these opportunities, dairy farms in
Deckerville are hedging their bets in the confluential organization of farm and
household, particularly those farms which are currently in the process Of transferring
the farm to the next generation. This indicates a general sense of pragmatism in a
community which is fortunate enough to have other avenues available to secure

some financial certainty.

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