Dairy, farm operate as divisions of Lochmead Farms
By DEAN REA
For the Capital Press
JUNCTION CITY, Ore. -- As the third generation shoulders leadership roles, Lochmead Dairy continues to serve as the focal point of a diversified business model established in 1965 by Gladys Gibson and her late husband, Howard.
Since then, the size of the family farm has increased from 120 to 3,000 acres, the dairy has grown from 80 to 715 cows, a milk processing plant has been built in Junction City and 44 Dari-Mart convenience stores serve southern Willamette Valley communities.
The dairy and farm operate as divisions of Lochmead Farms. The other two companies are independent, but representatives of all divisions participate in planning business strategy.
For example, the dairy met the in-house needs and those of other customers by producing nearly 19 million gallons of milk last year, said Chris Gibson, who replaced his father, Warren "Buzz" Gibson, as dairy manager five years ago.
Meanwhile, the farm managed by Scott Gibson, another third generation family member, grows feed for the dairy and filberts, blueberries and mint to flavor ice cream produced by the Junction City processing plant managed by Stephanie Gibson-Hawk, another third generation family member.
Building the processing plant was a "game-changer," said Buzz, who like other second-generation members continues to offer advice. "With it we could take it from the field, to the processing plant, to the store."
The 615 milking cows in a herd of 715 spend most of their time in sheds and are assigned to five milking strings. They are milked three times a day and are bred by artificial insemination. The nutritional balance of feed rations is determined by frequent blood sampling.
Three years ago, Revolution Energy Solutions, which is headquartered in Washington D.C., chose Lochmead as the site for one of its digester plants, which generates renewable electricity through anaerobic digestion of livestock manure. Buzz said the dairy utilizes some of the waste product as farm fertilizer.
While all of the family businesses have been profitable, Buzz said the dairy -- like others nationally -- lost money starting in 2009 when ethanol production siphoned off corn.
"The cost of corn skyrocketed from $115 to $350 a ton," Buzz said. The dairy countered by replacing two-thirds of its corn grain with earlage, which is silage made by grinding corn on the cob.
"That saved us $400,000 a year because you don't have to buy whole corn and grind it at $350 a ton," Chris said. "The feed cost used to be 50 to 55 percent of your expenses. It's currently costing us about 63 percent."
Buzz is optimistic that the cost of corn may decline if U.S. farmers plant and harvest an estimated 97.7 million acres of corn this year.
Meanwhile, Chris said, "the third generation appreciates how members of the second generation have worked all of their lives. It encourages us to work hard and to work together to continue the family business."
Owners: Gibson family
Herd: 715 cows
Years farming: 48
Divisions: Diversified farm, dairy, processing plant, convenience stores