AMES, Iowa – The Iowa State University (ISU) Extension and Outreach Dairy Team has released four new technical resources to facilitate partnership-based dairy operations, which the team said will help create career bridges that will benefit the nation’s beginning farmers.

Authored by Larry Tranel, ISU dairy field specialist, and the ISU dairy team, these four resources address such topics as high capital requirements, land costs and volatile milk prices, which he said can often create significant barriers for new producers attempting to enter the dairy industry.

Tranel said he and the dairy team are seeing optimism with young producers wanting to get into the dairy industry or work their way into the family farm.

“Our dairy team put this together, recognizing the need for these business partner relationships after seeing some of the original publications from early 1990s still being used by dairy producers to work with bringing younger producers into the dairy business – and in my workings with many farm families with finances, noticing the confusion of profitability and cash flow, and not knowing the important differences between the two,” he said.

The first publication, “Dairy Share Agreements,” explores entry-level options such as milk income share agreements, which use milk production and quality parameters to provide incentives for employees or apprentices – especially dairy producers who employ labor with the intent to transfer cows and other asset ownership over time.

These agreements can provide incentives for the herd workers or other dairy farm laborers to feel more a part of the profit and risk of the operation, the ISU dairy team said.

The second publication, “Net Farm Income, Cash Flow, and Profitability,” clarifies financial distinctions, helping producers avoid what the dairy team referred as a “cash flow mindset” that can distract from long-term sustainability, measuring true profitability through return on assets, ensuring that farmers account for the opportunity costs of unpaid labor and equity.

The third publication, “Sharemilking in the U.S.,” is based on successful models from New Zealand and Australia, the ISU dairy team said. Sharemilking is essentially a contractual arrangement between a landlord and employer.

Sharemilking combines management, land, labor, cattle and machinery in a multi-party dairy enterprise without forming a more formal arrangement such as a limited liability company, partnership or corporation. Sharemilking can also provide established sharemilkers and owners with secure strategies to modify their workload, the dairy team said.

The fourth publication, “Sharemilking Contract,” provides a comprehensive contract template, which includes example provisions for property descriptions, labor responsibilities and mandatory dispute arbitration to help parties prevent misunderstandings and solidify their commitments, the dairy team said.

Under the contract, the sharemilker will have the right to use the property for dairy production, including the sale of fluid milk to a commercial processor; however, the sharemilker may not sell milk directly to consumers, and will obtain and maintain all licenses and permits required to lawfully operate and sell milk.

These four publications are available for download at no cost from the ISU Extension Store https://shop.iastate.edu/extension/.