September 5, 2017 at 3:32 p.m.
From hired man to herd owner
Iowa couple forms agreement, enables hired man to start dairying
Mark Sitma spreads lime in the 17 stanchion milking barn he leases from his former bosses, Galen and Jeanne Breuer. “Things are going great so far,” Sitma said, who also purchased the Breuers’ dairy herd. Sitma purchased a minimal amount of equipment from the Breuers. He leases other needed items such as a tractor and feeder wagon. (photo by Jerry Nelson)
At the same time, there are young people who desperately want to dairy but find it impossible to gain a toehold in the business.
It's a rare and happy occurrence when a young person who wants to dairy connects with a dairy farmer who is looking for someone to grab the reins of the operation. The hard part is figuring out how to ease the young person into an ownership position in the dairy operation.
Galen and Jeanne Breuer have managed to forge just such an arrangement with their erstwhile hired man, Mark Sitma. The fact that Sitma grew up with no background in farming, or even dairying, makes the situation seem even more exceptional.
"All our kids became career people," Galen said. "Our two sons, Josh and Andy, both became engineers. Jessica, our daughter, is a nurse. We knew as soon as the boys moved away that this dairy was terminal."
After 30 years of unending work and striving to improve their dairy herd, the Breuers decided that it was time to take things a bit easier.
"We just wanted the freedom to be able to see our kids and grandkids," Jeanne said. "It got to the point where we didn't want to be asking Mark to handle things for us all the time."
"We also thought it was good stewardship to not let the buildings sit empty," Galen added.
Sitma grew up in town, but began working for area dairy farms when he entered high school. He started working for the Breuers ten years ago, when he was 15.
"Galen and Jeanne have been like family to me," Sitma said. He and his wife, Kimber, and their sons Jonathon, 2, and Justin, 3 months, live in a parsonage located about a mile from the Breuer farm.
"As our boys worked here less and less, we began to depend on Mark more and more," Galen said. "About three years ago we began to think about how to make it possible for him to take over the dairying side of our farming operation."
During the next couple of years innumerable conversations took place between the Breuers and Sitma.
"I'm glad we took as much time as we did," Galen said. "Every season would bring a new set of questions. For instance, who will be in charge of moving snow? Who hauls the manure and decides where it goes?"
The process of crafting an agreement that was mutually beneficial was made easier by the copious records the Breuers had kept.
"If you averaged out the last 10 years, the numbers said it would work," Galen said. "But we wanted to address all the roadblocks while we still had the opportunity."
Advice was obtained from a wide variety of sources, including ISU Extension's Beginning Farmer Center. Sitma eventually obtained both advice and a Beginning Farmer loan from the FSA.
The FSA loan financed the purchase of the Breuers' dairy herd - some 60 or so cows, plus their young stock - along with a very minimal amount of equipment. Sitma's lease of the Breuers' dairy facilities covers their costs for water, electricity and insurance, plus a small additional amount.
"It made the most sense for Mark to lease our tractor and feeder wagon," Galen said. "Those sorts of things make the difference whether this all works or not. Mark is a good dairyman; he's much better than me. He simply needs a way to take his talents and turn them into money. He also needs to be able to build equity."
Galen and Jeanne continue to farm their land. As per their agreement, Sitma purchases his feedstuffs from the Breuers.
But not everything is on a paid basis. For example, in the fall Galen lets Sitma borrow his baler to roll up bales of corn stalks to be used as bedding.
"The baler is paid for," Galen said. "And removing the corn stalks doesn't make any difference because it will all end up back on my fields as manure."
A formal five-year contract was drawn up between the Breuers and Sitma. The Breuers are committed for the full five years, but Sitma is free to walk away after two years.
"That way, he's not tied down if he finds a better set of facilities," Galen said. "Our milking facility is more than 50 years old. All we have are those 17 stanchions."
With the first full year of the agreement now behind them, neither party has any regrets.
"Things are going great so far," Sitma said. "I'm glad that we have such a clear-cut agreement, with no gray areas. Our agreement has built-in flexibility, which has been a tremendous help. The FSA has also been very accommodating and flexible. Kimber can't help much yet because she's at home with the kids, but I want this to remain a family dairy operation."
"Mark is learning to be his own boss," Galen said. "For instance, when I'm planting corn he has to decide how many acres of brown midrib corn he wants me to plant. He also has to make a down payment on each acre since silage corn would never yield as good as conventional corn."
"We've been gone more the past year than all the previous 30 years combined!" Jeanne said. "It's been wonderful. But we are also available to fill in for Mark whenever he needs to be gone, such as when they recently attended a wedding."
Both sides agree that communication has been the crucial ingredient for the success of this arrangement.
"You need to take the time and do the planning," Galen said. "Jeanne and I have also made a point of keeping our kids informed. They know everything that's going on."
The Breuers can now do such things as attend the Iowa State Fair with their children and grandchildren without worrying about how things are going back home.
"I'm still farming," Galen said. "It's just that I'm only a crop farmer now.
"I did have one surprise, though," he said. "For 30 years, Jeanne and I worked side by side every day. Now that we're spending more time apart, I've discovered I sort of miss that."[[In-content Ad]]
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