Farm Life Magazine: Vitamin D

Vitamin

D

In the southern half of California’s

Central Valley lies Kings County. Here, the soils are some of the continent’s richest and skies are sunny for upwards of 300 days each year, making the county and the rest of the valley one of the planet’s most fertile growing regions. ¶ Accordingly, it’s home to crop, livestock and other agricultural operations, such as Lakeside Dairy, where third-generation dairymen Mike and Manuel “Manny” Monteiro milk 3,500 cows, producing an average 35,000 gallons of milk every day. They also grow and harvest alfalfa, wheat and silage corn on 1,200 acres, mostly for forage.

It’s a big farm and a tightly run ship with two experienced businessmen at the helm.

Growth From Hard Work The brothers learned their craft from their father, Melvin, and their grandfather, Manuel, who came to the U.S. from the Azores in 1916. The Monteiro family has remained in the Central Valley ever since, each generation making their way in the dairy business.

“My dad and grandpa, they were both motivated people,” says Mike. “My grandfather started out with nothing and thought he and his son had all they needed when they got to 300 cows and 400 acres of land. My dad wanted to go to 1,000 cows. Well, the same thing happened to my brother and me. We wanted 10,000.

We want to grow more. We want to build more.”

And build they have. Today, the brothers own one dairy, M.S. 26

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Monteiro & Sons in Tulare County, with their father. With each other, they co-own two others: Endeavor Gold Dairy, also in Tulare, and their newest operation, Lakeside.

With its 1,200 acres, an 80-cow milking rotary and three, 7,000-gallon storage tanks all housed within an 11,000-squarefoot concrete milking barn, Lakeside Dairy cuts an impressive figure. There’s a 600- x 500-foot irrigation lagoon and a 450- x 500-foot anaerobic lagoon on-site. Fifteen heifer corrals totaling 1 million square feet to the east of the milking area add to the expanse with about 8 acres of feed storage area. Then, to the west, lies a 4-acre array of ground-installed solar photovoltaic (PV) panels that has changed the operation as much as it has the surrounding landscape.

With a smart finance plan, serious incentives and an established solar contractor, two California dairymen have turned 4 acres of solar technology into a real cash cow.

S T O R Y B Y S A B R A M O R R I S /// P H O T O S B Y J A M I E C O L E

Opportunity Knocks The solar PV array might just be the Monteiros’ best investment to date. “In 2008, I had several investors calling me from around the United States. They’d found that we were within a half mile of the PG&E [Pacific Gas & Electric Company] substation out here,” says Mike.

“These investors were asking to buy or rent 100 acres of our land to build their own solar fields.”

A year later, a company from Spain came to the farm and offered to put solar

panels on Lakeside’s south-facing free stalls.

Mike knew he was sitting on something big. He wondered if he could benefit from solar technology on his property—not as a landlord, but as a system owner.

He and Manny were also trying to find ways to soften the financial blow of the economic downturn that rocked the dairy industry in 2009, plummeting the price paid to milk producers to far below the cost of production and putting many dairymen out of business.

Mike told his banker, Randy Irwin of Rabobank, about the offers he’d received from solar investors. It just so happened that Rabobank had recently started a green energy department and was putting together finance packages for solar agricultural projects. Irwin provided Mike with a list of recommended solar contractors to contact, one of which was Novato, California-based SPG Solar.

“They’d already done several ag installations,” says Mike. He toured a few, and one in particular stood out. It was a tomato plant whose system size and output would be similar to Lakeside’s. “I was just thoroughly impressed,” he says.

SPG also offered a 10-year system warranty, 25-year panel warranty and an energy output guarantee, which promised the Monteiros’ system would produce 1.7 million kilowatt hours (kWh) per year. “That provides peace of mind to the customer that they’re getting a guaranteed return on investment,” says Dylan Dupre of SPG Solar. >>

“

If you’re thinking long term about your business, reducing your operating costs and improving your bottom line, solar can be part of the equation.

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Adding Up to Savings SPG installed the Monteiros’ system in February 2011. The panels produce the guaranteed 1.7 million kWh annually.

That’s enough clean energy to offset 75% of the electricity used at Lakeside—an amount equivalent to powering up to 157 typical American homes annually.

The system powers the entire milking barn, lights and fans, manure separation equipment, and irrigation and well pump equipment.

With regular energy costs through PG&E ranging from $13,000 per month in the winter to as high as $30,000 per month in the summer at Lakeside, the savings are dramatic.

Still, the Monteiros’ system cost $3.5 million; a typical commercial dairy system can cost upwards of $2.5 million—a substantial investment by any standard. “This certainly isn’t for every dairy operation,” says Irwin. “The Monteiros utilize a lot of electricity.

Because of the size of the operation, it becomes cost-effective for them.”

But size and electricity use are only part of the savings equation. The Monteiros also were able to take advantage of a federal government grant that paid 30% of the system’s cost within 30 days of installation. Through his tailored 10-year finance plan with Rabobank, Mike was able to apply that grant retroactively as a down payment, which eliminated any up-front cost.

Rabobank also developed a payment structure that takes into account Lakeside’s month-to-month electricity production. In the summer, when Lakeside uses and produces the most electricity and receives the most electric-bill savings, the dairy’s payment will be higher than in the winter months when electricity production and savings go down.

The Monteiros also receive additional benefits from the California Solar Initiative, a state cash-back incentive for home and business owners who install solar systems.

The initiative pays qualifiers an additional 15 cents per kWh, which for 28

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1 Mike keeps watch on Lakeside’s dairy facility, which sits on a 1,200-acre farm (2) near Hanford, Calif. 3 Four acres of panels produce 1.7 million kilowatt hours a year. 4 Up to 80 cows can “ride” the milking rotary at a time, each sending

Lakeside amounts to an average of about $21,250 per month for the first five years.

Cash Positive from the Start Substantial incentives and an expertly rendered finance plan have made the Monteiros’ solar investment cash positive from day one. After the bank loan is paid in full, Mike predicts he’ll save $192,000 per year in electricity costs at Lakeside.

“For Mike, it was always about the numbers,” says Dupre. “It wasn’t until a certain point in 2010 where commercial solar, with rebates and incentives, really started to become a great investment.

Mike was at the front of the line when that happened.”

The Monteiros’ installation has sparked curiosity among others regarding commercial PV. “Since Mike did this,

DieHard Hesston Fans RUNNING THREE LARGE DAIRIES,

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milk to tanks below (5). Manny says the cows often enjoy the ride, and it can be tough to get them off the rotary when milking is complete. we’ve experienced a large increase in the level of interest we’re seeing among the dairy community for solar,” says Dupre.

For the Monteiros, the decision was a smart one. “If you’re thinking long term about your business, reducing your operating costs and improving your bottom line, solar can be part of the equation,” Dupre says. “Mike was savvy enough to figure that out early on.”

Mike and Manuel “Manny” Monteiro understand the importance of identifying efficiency, especially in an era of economic uncertainty.

The alfalfa, wheat and silage corn the Monteiros grow and harvest at all three dairies allow them to satisfy 50% of their total feed needs for roughly 14,000 cows. Another plus: “We can control the moisture in our feed and the quality because we can get in the field when we want,” says Manny.

The brothers trust Hesston equipment for their harvesting. “I like Hesston because it’s just good, simple equipment that works,” says Mike, who turns to Quality Machinery in Hanford, Calif., for cutting and baling equipment. “Because I am a large farmer, I deal with a lot of equipment dealers,” he says. “Quality Machinery easily outshines them because they have a better parts department and employees that want to help you become successful. If I need a part after hours or on weekends, I’ll always have an answer as to whether the part is in stock within 30 minutes.”

The Monteiro family’s relationship with Quality Machinery dealer Gary Garrett goes back to the late 1960s when Garrett did business with the elder Manuel Monteiro (Mike and Manny’s grandfather), and has continued ever since. Today, Mike owns and operates Hesston 8500, 9635 and 8550 mowers, four Hesston 8450 swathers, one Hesston 4755 baler, two Hesston 4760 balers, two Hesston WR9770 windrowers, and he added two Hesston 2150 balers to his fleet earlier this year.

AGCO listens to its customers, according to Mike. “I was impressed about eight years ago when AGCO invited me to go to Orlando, Fla., to join in a study session with my peers from all over the U.S. to discuss what ways we thought they could improve the Hesston large baler,” he says. And they did. “They added an axle to carry the unit and two more tires to increase flotation so the unit rides smoother in the field. They also beefed up the stuffer.”

Mike adds that, as long as quality and service remain top-notch, “I will absolutely continue to use Hesston products.”

VISIT LAKESIDE AND MORE Visit the Monteiros and see video of the solar array at work at myFarmLife.com/ monteiro. Incentive programs for solar and other alternative energy programs differ from region to region and change periodically. For information about incentives in your area, see myFarmLife.com/incentives. /// Summer 2013

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