Rhett Rance Smith and Alice Avila Smith, et al. - Page 69




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          family dairy farms were not doing well, and he decided that to be           
          profitable, he had to find for his farm a niche in the market               
          that would let it compete as to product and price.  After much              
          research he decided to raise Normande cattle.  The dairy farm               
          idea had materialized and was operational by the end of 2001 and            
          accordingly expenditures would not be considered to be startup              
          expenses.                                                                   
               During 2000, Zane purchased 225 additional acres of farmland           
          nearby and called it the Columbus Dairy.  The Columbus Dairy                
          became the organic dairy farm.  At the Columbus Dairy, Zane built           
          a milking parlor and other buildings for the milking operation.             
          Zane also reclaimed the pastureland and built miles of fencing              
          for the organic dairy operations on the Columbus Dairy property.            
          Milking started sometime in 2002.                                           
               Normande cows are good producers of milk in France but are             
          largely used for beef consumption in the United States.  After              
          visiting many farmers and ranchers throughout the United States,            
          Zane acquired a herd of Normande cows that he believed would be             
          the best milk producers.  He intended to further breed the                  
          acquired herd so his activity could become competitive in the               
          dairy farming industry.  Zane had a 7-year business plan                    
          involving the importation of bull semen from France, as he could            
          not import Normande cows to breed with his cows to produce more             
          and better milk.  At the same time, Zane was working to convert             
          his land from a conventional to a certified organic farm.  Zane             





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