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Expansion Fuels Dairy Success

A farm rises from the ashes to new heights.

John Ruedinger remembers spending countless hours as a young boy growing up on the family dairy farm near Van Dyne playing with an elaborate farm set and wooden barn his Uncle Donald made for him. John admits that experience may have provided inspiration for him during the past 16 years to make several expansions to his dairy operation on the family farm.

The latest expansion, completed earlier this year, saw the dairy grow from 650 cows to 900.

"We moved two buildings and tore down a five-row freestall barn built in 1996 to make room for a 300-cow freestall addition onto to main barn," John says. "We moved a machine shed and pre-fresh barn. It was very easy, too easy." The buildings were set on cement foundations and are both used to store commodities. Ruedinger also expanded their De Laval parallel milking parlor to a double-11.

Triumph over tragedy

But 13 years ago on March 26, John and his wife Karen were thrust into a learning experience of a lifetime. A fire killed 33 cows and 66 calves and destroyed their 88-cow freestall barn, dairy barn, milk house and feed room.

"You wouldn't have wished anything like this on anyone," Karen says. "You just learn to deal with it and go on."

A year before the fire, the Ruedingers had purchased the dairy operation from John's parents, Paul and Delores, and had just finished remodeling their stanchion barn into a flat-barn parlor. At the time, they were in the process of expanding their herd from 90 cows to 120.

The 79 cows that survived the fire were moved to two farms.

Karen and John admit they got very little sleep the first week after the fire.

"The first thing we had to do was decide if we wanted to keep farming," John recalls. "Karen and I were 40 years old then. We could've gotten out of the dairy business or out of farming altogether."

Amazingly, within six months of the fire, the Ruedingers built a new 200-cow freestall barn and double-8 parallel De Laval milking parlor.

In 1998, they added a 105-cow freestall barn and were milking 350 cows. A year later, the Ruedingers expanded their herd to 400 cows.

In 2001, they built a calf barn, machine shed and post-fresh barn.

"We moved the dry cows off the farm and increased our herd size to 500 cows," John says.
In 2003, they built a 162-cow free-stall barn and moved the dry cow's home and increased their herd size to 650 cows.

Always improving

John is quick to credit his employees with much of the farm's success.

"It's who you surround yourself with that makes a difference," John says. "You have to hire people who are better than you."

The Ruedingers have 15 fulltime and one part time employee. Their herdsman is Kevin Kaiser. Their assistant herdsman is Carlos Gonzales. Jim Borwardt is in charge of crops and maintenance.

"Your key people on the farm have to provide leadership," John says. "You have to seek out top notch key people to grow your operation."

The Ruedingers own 180 acres and rent an additional 1,130 acres including 485 acres John rents from his dad.

B&S Chopping in Van Dyne handles all of their hay and corn chopping.

Calves are raised at the farm until they are 5-6 months old. The calves are then sent to O'Brian Farms of Eden a custom heifer raiser where they stay until six weeks before they calve.

Their DHIA rolling herd average is 28,490 pounds of milk on three times a day milking.

"Our goal is to have 86 pounds of milk sold per cow. We're within a half pound of that now," John says. "That's actual milk leaving the driveway because that's what we get paid for."

John is farm manager and does all of the financial record keeping and paperwork.

"I know how every buck is spent every day," he notes.

John says once a month he sits down with Dan Wenzel of Dairy Business Consulting to analyze twenty Critical Success Factors in areas such as milk sold, animal and feed inventories, labor costs, budget to actual income and expense and monthly balance sheets.

John routinely locks in half of his milk production on the futures market through Stewart-Peterson.
"You have to protect your risk," he says. "That's why we forward contract our feed and half our milk."

While he admits he has lost money some years forward contracting his milk, he says he broke even in 2008. In 2009, John locked in half of his milk at $17.29.

"I wish I had locked in the other half," he says.

As a result, he projects that he will make $600,000 more in 2009 than what he would have if he had not locked in half of his milk.

"We're still going to lose money this year because our breakeven level is $16.32 and our blend price (between milk forward contracted and milk not contracted) is $15.60," he says. "It's nothing to brag about, we'll still be in negative territory for awhile, but it could have been a lot worse."

Looking back

Even though it was awful at the time, John thinks the fire turned out to be a good thing for his farm operation.

"I never envisioned all this when the fire hit and we rebuilt," John admits. "I wouldn't wish it on anyone, but in the end, I'm having the most fun working in the dairy business that I've ever had. I'm glad we decided to rebuild and expand," he says.

John credits his experience on the Genex and CRI boards of directors, serving as chairman of Cooperative Resources International , and six years on the Professional Dairy Producers of Wisconsin board of directors and serving as secretary with helping him see how big business manages and exposing him to new ideas and dairy producers throughout the state.

"I always looked up to Carl Theunis, the Doornink's and the Hodorffs," he explains. "I always thought they were the trendsetters and a step ahead of everyone else. Now it's quite startling to realize we're at that level."

John says success in the dairy business did not come easy.

"There were a lot of growing pains."

He also credits his father's guidance and wisdom for his success in farming.

"I still call him and ask him for advice. I guess I will always do that."

John's father Paul is a 1990 Master Agriculturist. John says being selected for the same award this year is a real honor.

"I'm proud that I am the second generation of my family to receive this award," John says.

During the past decade, the Ruedingers have hosted countless tours at their farm and were a host farm for the 2007 Midwest Dairy Challenge.

The couple has four children; John, 29, who is a senior internal auditor; Melissa, 28, who is a teacher; Laura, 27, who is a social worker; and Jamie, 25, who is a paralegal. They also have a grandson and a granddaughter.

Future plans

John says the next expansion will be to double the herd size from 900 cows to 1,800.

"Our parlor is maxed out, so we'll have to build a new parlor – probably a 52-cow rotary or a double-26 parallel parlor. "Our three-row barn could easily be expanded to a six-row drive through facility," he says pointing out the spot where he plans to build. John has no timeline of when he will make the leap to double the herd size to 1,800 cows, but he knows that's his next phase.

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