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How many cows would be needed to cover the $89 million delay in funding to the U of M?

Maybe Monday was a slow news day, but I wasn’t the only reporter sheepishly asking the University of Minnesota why it’s selling a herd of about 130 milking cows and 130 young animals at its research and outreach center in Crookston, Minn.

It took me a while to work up to that call. I started out asking News Service Director Dan Wolter whether the U of M has $89 million it doesn’t need until next summer. That’s the amount of aid the state has proposed delaying to the U because of another shortfall in state tax revenue, according to a DFL legislative press release I read Monday.

“This is certainly not an insignificant amount of money and it has the potential to create significant concerns with regard to our credit rating,” Wolter wrote in an email. “However, we don’t anticipate having to engage in any short-term borrowing to deal with it. Keep in mind that state appropriation has fallen to about a fourth of our total budget. The biggest concern for the university is how it impacts our liquidity and bond rating, which has the potential to drive up costs in the long-term.” 

At the end of his email, Wolter noted (with a wee bit of humor): “We’ve been tied up with cows all day!”

A reporter doesn’t read such a statement every day. She may try to connect the dots, however, between a vaunted institution selling off a herd and covering an $89 million delay in state funding. 

“We have nowhere near that many cows,” said a chuckling Becky Byers, spokeswoman for the College of Food, Agricultural and Natural Resource Sciences (commonly known as CFANS).

I did the math, but you’ll have to keep reading to see how many cows would have to be sold to cover an $89 million gap in the budget.

Stories prompt inquiries
What may have set off the press tizzy was a post in the Chronicle of Higher Education’s Ticker blog, which referred to an Associated Press story about land-grant universities selling off dairy herds to cut expenses. The University of Minnesota, Michigan State University, University of Vermont and University of Kentucky are among the institutions selling either part or all of their herds.

I had read the same reports and phoned Byers, who put me in touch with an associate dean.

What the national reports didn’t say is that the U is laying off seven people at the CFANS research and outreach center in Crookston. This move is the biggest reduction of an operation that Greg Cuomo says he has dealt with in his time as associate dean of CFANS. 

“The state, the nation and the university are facing some tough financial situations,” Cuomo told me. “What we’re trying to do is get ahead of it … and to be thoughtful and proactive about how we can best serve agriculture as a whole” within the budget constraints and demands.

The U has operated three dairies in the state as part of its research and outreach work. Research at both Crookston and the St. Paul campus has focused on nutrition and reproduction for conventional dairies, Cuomo said, while the Morris center is focused on organic and sustainable production. The research redundancy was an obvious place to cut.

“This was the one that jumped out at us that we could do and get started on,” he said.

Why Crookston? Why not St. Paul? Dairy farming isn’t as big a part of agriculture in the northwestern area of the state as it is in central and southern Minnesota, he said. The U will maintain, however, the northwest center’s work in areas including small grains (barley and oats), sugar beets, pathology, soil, sustainable systems and wildlife, he said.

The CFANS outreach/research budget could face up to a $1 million cut next year based on projections of a $5.3 billion state budget deficit, he said. “We’ve faced reductions the last few years … and we’re doing the math like everyone else.”

Cutting through attrition
CFANS had been cutting expenses by not replacing faculty who leave such as a tenured professor who retired from the Crookston center awhile back and nine others who left. “My message is we’re still committed to dairy in a big way,” he said. “We’ve hired two new diary positions — a dairy nutritionist and someone to head the organic program at Morris.”

But the horizon isn’t bucolic. “We are getting to a point where we have to make very difficult decisions that impact people,” he said.

Selling off one herd won’t cover right away the anticipated shortfall for research and outreach operations. Cuomo anticipates an upcoming auction will bring in about $300,000 from selling the entire herd in Crookston. The bigger savings will come in cutting recurring expenses of running the dairy center. He doesn’t have a precise figure for the savings in staff and operations but estimated “several hundred thousand dollars” a year overall.

So, here’s the math on covering that potential $89 million hole with cows, not that anyone would seriously suggest it as a broader strategy. Based on the $300,000 expected from the auction of 260 animals (bringing in an average of $1,154 each), the U would need 77,123 cows to bridge the gap. Or, it would need to set minimum bids at $342,307 per animal at the upcoming auction.

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Comments (1)

  1. Submitted by Bill Gleason on 07/13/2010 - 09:29 am.

    Or, the U could sell the gravel farm and proposed cement factory at MoreU Park?

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