RAFT RIVER, Idaho — To finance a new multi-million-dollar organic dairy, three partners in southeastern Idaho turned to their banker to make it happen.
One of the partners, Ray Robinson, a member of the cooperative High Desert Milk in Burley, sought out a lender with extensive experience in the dairy industry, Jon Maughan, who works for Rabo AgriFinance.
“I’d worked with Jon years ago when he was with Northwest Farm Credit Services,” says Robinson, who milks 20,000 cows daily. “I knew if we put up the collateral he could put together the right financial package for us.”
Robinson was impressed with Maughan’s communication skills.
“He kept us informed of where we had to be financially as we moved along,” said Robinson. “Whatever banker you pick, there should be honesty, so there are no surprises for either the lender or borrower.”
Maughan emphasized that a banker has to understand an industry and structure a company’s loans accordingly.
“With startups especially, it’s imperative and challenging to design a proper loan structure until the operation gets on its feet,” said Maughan.
“It’s our first greenfield project and the largest organic dairy we’ve been involved with,” said Maughan. “It’s been a pleasure to be part of it.”
The new business, Nature Ridge Organic Dairy in Raft River, has 2,450 Holstein/Jersey cows and 30 full-time employees. About 111,000 pounds of milk is produced daily for Glanbia Foods’ cheese production.
Maughan said the success of the three partners’ previous businesses played a role in financing the new venture.
Besides Robinson, other partners are Reed Gibby, who owns pig farms including one that supplies porcine heart valves to medical companies, and Kevin Schroeder, who specializes in disposal and recycling of agricultural waste products.
Schroeder said, “Reed found some ground that had been out of production for decades, making it ideal to develop as an organic dairy for a niche market.”
Schroeder is optimistic about the state-of-the-art dairy’s future.
“We milked our first heifer in December 2016 and are heading soon into our second lactation,” he said while watching heifers being milked on a rotating carousel with 60 stalls.
A cow is milked in about six minutes as the carousel slowly rotates.
“Some don’t want to get off when they’re done because they like it so much. It’s an efficient way to milk,” said Schroeder.
Watching the carousel is the most popular stop on field trips.
“We’ve taken a lot of students on a tour,” he says. “We want them to understand how their food is produced.”