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Lawmakers want $7.5M payback for failed SDSU dairy plan

PIERRE, S.D. — A legislative budget committee endorsed a bill Tuesday that would repeal $7.5 million in state funding for South Dakota State University to construct a new dairy research and training facility.

The lawmakers on the state House Appropriations Committee approved the repeal 7-2.

The original bill, which passed in 2021, was intended to support the development of a state-of-the-art dairy facility at SDSU in Brookings, replacing outdated infrastructure. It required the university to raise matching funds.

SDSU President Barry Dunn told the committee that the university struggled to raise the money. He said SDSU could only raise $1.3 million.

“I’m very grateful to those who supported the project,” Dunn said. He said $500,000 came from the dairy industry, another $500,000 from a private individual, and the remainder from numerous others.

Dunn said inflation increased the construction costs and made the original plan financially unfeasible. He said estimates now range from $28 million for a smaller facility to about $50 million for the original plan.

“Of course, those numbers dramatically exceed the $7.5 million authorized by the state,” Dunn said.

Dunn outlined a new strategy for the university’s dairy program. It involves collaboration with nearby dairies rather than constructing a new on-campus facility. The approach aims to sustain the university’s dairy program without the burden of an expensive new building.

Those plans are still pending, but Dunn said he is “very confident” SDSU will make that happen.

Some SDSU dairy students testified against the repeal, emphasizing the importance of an improved on-campus facility for the program’s success.

Jacob Schaefer, a senior dairy production major at SDSU, requested the budget committee allow the university to keep the $7.5 million and use it to construct a scaled-down facility.

Dunn acknowledged the current on-campus facility is “on the verge of not being able to use,” but added that “enrollments have been dropping dramatically” in SDSU’s dairy program. He said only 23 students are currently enrolled; therefore, the cost of the new dairy facility could not be justified.

Others argued that a new facility could attract more interest.

Milk production in South Dakota totaled 395 million pounds in December, the most recent month of available data. There were 207,000 milk cows in the state.

The industry has experienced significant consolidation in recent years, trending toward fewer and larger farms. The number of licensed U.S. dairy herds fell by more than half between 2002 and 2019, according to the U.S. Department of Agriculture.

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