One Year Later….The Producer
To celebrate National Dairy Month in 2008, Agribusiness Dairyman examined the state of the industry from various vantage points – from that of the producer, environmental educator, advocate, and government administrator. One year later, we re-connected with the producer to see what has changed, stayed the same and what a difference a year can make.
Ann Bacchetti Silva, owner of Bacchetti and Silva Dairy in Tracy, California, is still a no-nonsense dairywoman with a firm handshake. She’s still all dairy, all the time, but that is about to change. Since we last talked with Ann, a series of events have transpired that have brought about her decision to sell the dairy.
She’s very adamant that this decision was not an easy one to make, but in the end, it was a business decision through and through. As a third generation dairywoman, it is the only life she has ever known, but she’s also a third generation successful business-owner and the lifestyle wasn’t reason enough to start making bad economic choices.
While the rollercoaster of input costs over the past twelve months have been difficult, the abysmal price of milk has played a major role in her decision to evaluate the viability of the business. The death of her father in September 2008 was also a major catalyst in Bacchetti Silva’s decision. “This was a business of four partners – my husband, mother, father and I. As the only surviving partner left, it no longer made smart business sense to continue,” says Bacchetti Silva.
Her decision is becoming more and more common these days. As dairymen nationwide struggle with continually fluctuating production costs and dismal milk prices, all are evaluating if continuing to stay in business is a wise decision. As Bacchetti Silva notes, though, it’s more then just a job, dairying is a way of life. As a result, many struggle with other options and weighing those, in this dark economy, against weathering the storm.
For Bacchetti Silva, once she put all her cards on the table and discussed options with manager Peter Corallo and herdsman James Gomes, the choice was simple and there has been no looking back. Always introspective, the decision has afforded her the opportunity to really evaluate the state of this industry and provide some grounded insight.
Even though dairying is no longer a smart business decision for her, Bacchetti Silva believes that there are opportunities to be had. As a delegate to China for the California Milk Advisory Board, she saw first hand the potential for dairy exports overseas. “The Chinese are clamoring for our goods – our milk, our cheese – and the large population has the money to spend,” notes Bacchetti Silva. “There is tremendous potential and we haven’t even begun to harness it.”
She points out that to maximize success in China and other developing countries, the dairy industry will need to once again become creative and implore new, yet-to-be discovered technology. “Producers and processors alike will need to be open and willing to the idea of innovation and creativity; this market is unlike anything we’ve ever seen.”
She also notes that lessons in cultural awareness and sensitivity will be essential. “These consumers have a different way of life that is grounded in history, religion, traditions and beliefs that are beyond the scope of many American dairymen. They will need to take the time and effort to learn about these new consumers if they hope to maximize markets and profits,” observes Bacchetti Silva.
The role of technology will continue to be integral to the long-term success of the dairy industry. Bacchetti Silva notes that even though some innovations have fallen victim to regularly-changing environmental regulations, it is important for producers to not give up all together.
She sites recent issues with methane digesters in the San Joaquin Valley of California. While the systems create environmentally-viable solutions to waste management, many do not meet the local air board’s particulate matter regulations and as a result, are sitting idle. A number of dairymen have bemoaned the investment of time, energy and creativity, only to be shut down by more stringent thresholds.
Bacchetti Silva shares in her fellow producers’ frustration, but warns against hardened attitudes. Her opinion today is the same it was one year ago – technology will be the cornerstone of this industry’s ability to survive and thrive in the years to come.
She also believes that the nation’s milk pricing system is in drastic need of an overhaul. Current milk prices, like those three years ago, have once again stimulated conversation about the need for change. Her fear is that once prices begin to rebound, the impetuous for making modifications will fall to the wayside. Bacchetti Silva hopes that the compounding factors brought about by the global recession will be the push needed to force the issue.
Now, just like a year ago, there continues to be a need for bold leadership throughout all segments of the dairy industry. Bacchetti Silva looks to the recent debacle at Humboldt Creamery as a prime example of a loss of leadership. “Now, even more than a year ago, there continues to be a fragile milk processing system in California. This is a time that calls for bold leadership throughout all segments of the dairy industry. Last year milk production caps were put on several producers and this year the recent debacle at Humboldt Creamery and the termination of Foster Farms shippers with few choices on where to get their milk processed.”
As for the Bacchetti and Silva Dairy, she is hopeful that the right buyer is out there to take the reigns of this turn-key operation. Sitting on 320 acres with 1,000 cows, Bacchetti Silva has guided her dairy in the manner ideal for 21st producers – the state-of-the-art facility is set-up for optimum environmental stewardship. Its location near the San Joaquin Delta ensures cool temperatures, adding to cow comfort and optimum forage growing conditions. All in all, from her perspective, dairies don’t get any better then this.
As we talk, Bacchetti Silva exudes a calm that is almost unnerving. Her matter-of-fact diplomacy and honest perspective are a sign that she is truly at peace with this decision. At the moment, she really has no idea what she’ll do once the dairy sells. Like most dairy producers, this is all she has ever known and she’s given little thought to life beyond the cows. The unknown is a bit exciting and nerve-wrecking all at the same time, but as she notes, those are feelings synonymous with dairying so there’s at least comfort in the familiar emotions.
In the end, Bacchetti Silva notes that what she has always loved about this business were the people. “I’ve lost the three people that I sat around the table with talking about the dairy over dinner. Now that they’re gone, it’s just not the same; now it feels like work. And once it felt like work, it was no longer the life for me.”
Go back to the articles page
