Archive for the ‘Midwest DairyBusiness’ Category

Productivity Cuts Cow numbers, Total Methane

More productive dairy herds

– requiring fewer cows to produce more milk

– have resulted in less overall methane emissions into the atmosphere, according to a new South Dakota State University study.

South Dakota State University Extension dairy specialist Alvaro Garcia, along with James Linn, head of the University of Minnesota department of animal science, looked at the role cattle and dairy cows play in methane emission. Garcia and Linn presented their findings at the 2008 American Dairy Science Association meeting in Indianapolis.

According to the U.S. Environmental Protection Agency, agriculture is responsible for roughly 30% of total U.S. methane emissions. A majority comes from gastro-intestinal fermentation and manure management.

Garcia and Linn compared today’s dairy herds to those of 1924, the first year USDA dairy statistics were compiled. Modern dairy cows weigh more than those of 1924 as a result of genetic selection and a reduced number of mixed breeds, and therefore generate more methane per animal. However, in 2007, there were 9.15 million cows producing an average of 20,231 lbs. of milk per cow annually. In 1924, there were 21.42 million cows with a yearly per-cow average of 4,162 lbs. of milk.

“There were also drastic differences in the production systems. In 1924, more than half of U.S. dairies grazed their cows nearly six months of the year with diets that consisted almost exclusively of supplemental forages,” Garcia said. “The majority of today’s dairy operations confine their animals and feed a diet of roughly 50% grain and 50% forage.”

Dairy cow methane production is associated with total feed intake – the more a cow eats, the more gas she will produce. Average cow feed intake is determined by their production and their genetic drive to produce more milk stimulates them to eat more feed.

In 1924, the average daily production was 11.4 lbs. of milk, with a feed intake of 21.3 lbs. of dry feed. Cows produced just under 0.5 lb. of methane daily. In comparison, 2007 dairy cows produced on average five times more milk – 55.4 lbs. per day – and consumed on average 41.6 lbs. of dry feed. The dairy cow of 2007 produced almost 0.75 lb. of methane per day. Although the results show modern cows produce more methane daily, in 1924 there were 12.3 million more dairy cows in the United States.

“This large number of cows resulted in 40% more total methane emissions when compared to 2007,” said Garcia. “If we look at the ratio, three times more methane was produced per pound of milk in 1924 compared to 2007.”

This research also showed that production efficiency started to change drastically during the mid-1950s, with fewer cows needed to produce more milk. These changes resulted in less total methane production in spite of the increased gas production on a per-cow basis.

Garcia said there are opportunities to reduce methane emissions from dairy cows.

“Feeding grains and their byproducts will continue to be a important practices to reduce methane emissions,” he said. “Regrettably, high grain prices might challenge our ability to economically feed cows for reduced methane emissions. We must stress the importance of high quality forages to increase the efficiency of feed utilization and thus reduce the emission of methane.”

Similarly, the use of production enhancers such as ionophores and growth hormone result in improvements in efficiency.

All these measures should be accompanied by an adequate ration balance according to the nutrient requirements of the different physiological states of the cow, Garcia concluded.

Studies come to defense of dairy technology

Production efficiency cited as one key to reducing dairy’s carbon footprint.

By Dave Natzke

Proponents of dairy technology and sustainability have a new arrow in their quiver. On June 30, the Proceedings of the National Academy of Sciences web site published a Cornell University study demonstrating the use of recombinant bovine somatotropin (rbST) reduces the carbon footprint of milk production.

The study, “The Environmental Impact of Recombinant Bovine Somatotropin (rbST) use in Dairy Production,” is authored by Cornell professor Dale Bauman, post-doctoral research associates Jude Capper and Euridice Castandena-Gutierrez, and Monsanto scientist and Cornell alumnus Roger Cady.

With modern agricultural practices – especially those related to livestock production – coming under increasing pressure, the entire dairy industry is seeking ways to become more “sustainable” and reduce its overall carbon footprint. For example, spearheaded by Dairy Management Inc., producers, processors and marketers recently held a “Sustainability Summit” to address issues from the farm to the consumer (see July 2008 Midwest DairyBusiness, “Make Dairy Industry More ‘Sustainable’,” by Paul Rovey).

However, frequently lost in the rush toward “sustainability” is the need for adequate food production to feed a growing population, and the need for food producers to achieve adequate profitability to stay in business.

According to the Cornell study, as the global population reaches 9 billion people in the first half of the 21st century, the food supply required over the next 40 years will approximately equal the total amount of food produced throughout the history of humankind. U.S. milk production will have to increase to 5.62 billion gallons by 2040 to meet USDA dietary recommendations for three 8-oz. glasses of milk per person each day. The most sustainable way to increase U.S. milk production is to improve production per cow, and assess total population environmental impact per unit of milk produced.

“Sustainability is important in agricultural production, with an emphasis placed on meeting human food requirements while mitigating environmental impact,” said Bauman. “This study demonstrates that use of rbST markedly improves the efficiency of milk production, mitigates environmental impact including greenhouse gas emissions and reduces natural resource requirements such as fossil fuel, water and land use.”

Three models

The study design included three models to predict the environmental impact of using rbST:

1. one examined the impact of increased productive efficiency of individual cows in a producer’s herd.

2. another examined industry-scale adoption of rbST-supplemented cows, a number equal to approximately 15% of the current U.S. dairy herd.

3. another examined the environmental impact of achieving future increases in the future U.S. milk supply required to meet projected population growth and USDA Dietary Guidelines using conventional, conventional with rbST or organic production systems.

Increasing milk production efficiency reduces the feed required per unit of milk by diluting the fixed maintenance feed requirements over more units of milk. This means less manure is produced per unit of milk, and the amount of nitrogen and phosphorus that could potentially run off into waterways is reduced.

The carbon footprint will also decrease when the same milk can be produced with fewer animals and less crop production. “The total reduction in the carbon footprint conferred by rbST supplementation of 1 million dairy cows is equivalent to removing approximately 400,000 family cars from the road, or planting 300 million trees,” the study’s authors said. “Increased milk production efficiency also decreases the energy needed from fossil fuels and electricity required for cropping and milk production.

“The savings in gasoline alone would be sufficient to power approximately 1,550 passenger cars, each traveling an average of 12,500 miles. Further, the total fossil fuel and electricity savings would provide sufficient annual heat and electricity for approximately 16,000 and 15,000 households, respectively.”

More cows are needed to meet projected dietary demand, but with technologies and husbandry practices that increase productive efficiency, that need can be greatly reduced. The authors report that 8% fewer cows are needed in an rbST- supplemented population, whereas organic production systems would require a 25% increase to meet future production targets.

Strong start builds a productive future

Studies show a link between nutrient intake prior to weaning and long-term milk yield.

By Mike Van Amburgh, Emiliano Raffrenato and Bob Everett

Your treatment of calves from the first hour through the first six to eight weeks of their lives could impact their future milk producing ability.

Most dairy producers know the important relationship between calf health and growth and colostrum quality, yield and immunoglobulin (Ig) absorption. Low serum Ig status in calves relates to decreased growth rate and increased morbidity. Some studies even indicate that low serum Ig levels affect milk yield during first lactation.

A 1988 study indicated calves with higher Ig status are able to inactivate pathogens prior to mounting a full immune response. This allows them to maintain energy and nutrient utilization for growth  But calves with low Ig status must first mount an immune response, diverting nutrients to defense mechanisms rather than growth.

How severe is this difference, or for how long does it persist? Data from a 1989 study demonstrated that for each unit of serum IgG content above 12 mg/ml, there was an 18.7-lb. increase in mature equivalent milk yield. This implies calves with lower IgG content were more susceptible to immune challenges, which impacted long-term performance.

A 2005 study suggests the impact of serum Ig levels wasn’t nearly as great, but still affected milk yield and survival through the second lactation. In that study, Brown Swiss calves received either 2 or 4 liters of colostrum just after birth. Researchers monitored the animals for two lactations after calving, making three observations:

1. There was a 30% increase in prepubertal growth rates based on colostrum feeding level under identical feeding conditions.

2. There was a 16% increase in survival to the end of the second lactation of calves fed the 4 liters of colostrum.

3. The surviving calves fed the 4 liters of colostrum produced 2,263 lbs. more milk by the end of the second lactation.

We don’t know if this response is due just to Ig status or other factors in colostrum. But it suggests colostrum quantity is important for long-term productivity, in addition to what we traditionally thought of as immune status.

Early eating, later production Many studies have allowed researchers to look at milk yield from cattle that received more nutrients up to eight weeks of age (see Table 1). In each study, increased nutrient intake prior to 56 days of age resulted in 1,000-3,000 lbs. of additional milk during the first lactation, compared to calves under more restricted feeding during the same period.

In a recent Miner Institute study in Chazy, N.Y., researchers report calves fed approximately 2 lbs. per day of milk replacer produced 1,543 lbs. more milk (at 200 days in milk) than calves receiving 1 lb .of milk replacer powder per day. Calving age wasn’t affected by treatment.

Averaging the studies shown in Table 1, there is a 1,700-lb. response to increasing nutrient intake prior to weaning. Here’s the take-home point: The higher intake levels must be from liquid feed.

Cornell research

We started feeding Cornell’s research herd for greater preweaning weight gains many years ago, and have more than 1,000 weaning weights and 725 lactations with which to make evaluations. We analyzed the lactation data of the 725 heifers with complete lactations, evaluating several factors – birth weight, weaning weight, height at weaning, weight at 4 weeks of age and others – related to early life performance and their milk yield.

Our data shows growth rate prior to weaning has the greatest correlation with first-lactation milk. For every pound of average daily gain (ADG) prior to weaning, the heifers produced approximately 1,000 lbs. more milk.

The range in preweaning growth rates among the 725 animals was 0.52 to 2.76 lbs. per day. Also, 20% of the variation in firstlactation milk production could be explained by growth rate to weaning. This has important ramifications:

The impacts of Ig status and nutrient intake play a significant role in the performance and variation in first lactation milk yield.

More milk will be achieved once we better understand the cause of the variation.

To achieve these milk-yield responses from early life nutrition, calves must double their birth weight by weaning. This means milk or milk replacer intake must be greater than traditional programs for the first three to four weeks of life.

A closer look at some research

In the study by Rincker et al. (2006), control calves were fed a standard 20% crude protein (CP), 20% fat milk replacer and starter, at 1.2% of body weight (BW), to achieve 1-lb. per day growth rate to weaning. The treatment calves were fed a 28% CP, 15% fat milk replacer at 2.1% of BW and a higher protein starter (24.5%) to achieve 1.5-lb. per day gain prior to weaning. All calves were weaned by six weeks and fed similarly from eight weeks through the first lactation. Body weight at calving was not different – 1,265 vs. 1,241 lbs., respectively. Milk yield was followed only through the first 150 days of lactation. Projected 305-day milk yields were 1,100 lbs. greater for the heifers fed for the higher growth rates prior to weaning.

The response in the Moallem et al. (2006) study suggests milk replacer quality and protein status of the animal, post-weaning, were important to achieve the milk yield response.

Calves were fed a 23% CP, 12% fat milk replacer containing soy protein or whole milk. Post-weaning, calves were fed similarly until 150 days of gain, and the diets were protein deficient (~13.5% CP). Starting at 150 days, calves from both preweaning treatments were supplemented with 2% fish meal from 150 to 300 days of life.

Calves allowed to consume whole milk ad lib for 60 minutes, supplemented with additional protein, produced approximately 2,500 lbs. more milk in the first lactation.

In the Pollard et al. (2007) study, calves were fed either a conventional milk replacer (22:20) at 1.25% BW or a 28:20 milk replacer fed at 2% BW for week one of treatment. They received replacer at 2.5% BW from week two to five, and then were systematically weaned by dropping the milk replacer intake to 1.25% for six days.
All calves were weaned by seven weeks of age and, after weaning, managed as a single group and bred according to observed heats. The heifers calved between 24 and 26 months of age with no significant difference among treatments. Calving weights averaged 1,278 lbs. Milk yield on average was 1,841 lbs. greater for calves fed the higher level of milk replacer prior to weaning.

Milk Market Bigger Than Any One Fundamental

August and September have historically provided some good longer-term milk contracting opportunities. While this has not been the case the last couple years as milk prices have trended higher, this year may be different.

Stepping back to assess the milk market’s bigger picture, there are a number of developments over the last six months that have not garnered much attention, because feed costs have dominated the headlines:

1. the duration of the current bull cycle. Since Class III futures began trading in 1997, the average bull cycle has lasted about 19.5 months. The longest bull cycle was 25 months, starting in August of 1997 and lasting until September of 1999. The current bull cycle, which began in August of 2006, is on its 24th month. If you end this current bull market cycle at May 2008’s high, then the cycle lasted 22 months. While no market cycle is ever exactly the same in terms of its duration, it is important to recognize the current bull cycle in milk could be at or near its maturity.

2. dairy cow numbers have grown at a tremendous rate. Year- Milk market biger than any one fundamental to-date, the number of dairy cows on U.S. farms grew by 60,000 head. This is the second fastest rate in the last 11 years. Dairy cow slaughter is running only about 1.9% higher than last year at this time, despite record-high feed costs.

3. total natural cheese stocks and total milk production have both grown year-to-date at an average rate of more than 3%. This is the highest average cheese stock growth rate since 1999, and the highest average rate of milk production growth since 2006.

4. large speculators in the milk market have reduced their net bullish futures position by almost 3,000 contracts over the last month, according to the Commitment of Traders report released by the Commodity Futures Trading Commission. These guys are some of the big players and market makers in Class III, and they do not usually reduce their bullish position by that magnitude in a strongly higher trending market.

5. the domestic and global economy is slowing. Job layoffs and unemployment figures have been rising. Consumers are feeling the pinch of rising energy costs 28 Midwest DairyBusiness August 2008 and overall rising costs of living. Consumer confidence in the United States and around the world has fallen to levels not seen in more than a decade or longer. Subprime woes and bank failures have not abated. A strong consumer is extremely important to the milk market, and the consumer’s strength and depth of pocketbook has to be brought into question.

Producers have cited higher feed costs and higher costs of production as reasons why they have not or will not develop a marketing strategy. The factors listed above are reminders that the milk market is bigger than any one fundamental. While feed costs are an important factor within the milk price cycle, there are dozens of other fundamentals which influence milk prices. If every other fundamental points towards lower milk prices, then high feed costs may not be enough to support the whole market. If a reduction in supply is needed, the milk market will be driven down to unprofitable levels.

Indeed, the next couple months could provide some rallies and some upside pricing opportunities for milk producers. Take advantage of this potential seasonal strength and develop a marketing strategy that protects your downside price risk through the end of 2009.

Optimize milking equipment

Optimizing and maintaining your milking equipment is important for milking efficiency and udder health. Focusing on five areas can help you reach peak efficiency and monitor performance.

1. Vacuum. Milking system vacuum should be based on average peak milk flow claw vacuum, which will vary depending on average milk flow rate. Average flow rate is reliant on multiple factors, including milking frequency, udder prep lag times, milk production and take-off settings.


• Check the vacuum gauge during every milking shift.

• Maintain vacuum pump and filters regularly to ensure proper function.

• Check for plugged air holes in milking unit.

2. Pulsation rate & ratio. Pulsation is broken into four phases: A) opening, B) open (milk phase), C) closing and D) closed (massage phase). To optimize pulsation rate and ratios, look at the time (milliseconds) spent in each phase so the system can be set to provide optimal milk and rest phases for safe, fast and comfortable milk out and healthy teats.


• Have pulsators graphed regularly by a qualified technician. Graphing frequency should increase with usage and if problems are identified.

• If debris enters the air hoses, coach milkers to communicate these issues with management so action can be taken.

3. Liners. Liners should fit the average teat size in the herd, and vacuum should be set properly for that specific liner. Change liners according to the manufacturer’s recommendation to maintain efficiency, minimize liner slips and maximize performance.


• Change liners, air tubes and milk hoses on a regular schedule. Check for holes in the air tubes during each milking.

• Align arrows on liners for proper function.

• If you notice fluctuations in milk out and average flow rate when you change liners, replace them more often.

4. Automatic take-offs (ATOs). ATOs provide consistency in milking unit detach times, but must be properly set to prevent overmilking. Proper udder prep procedures, unit attachment and alignment are vital to proper ATO function. ATOs should be adjusted to account for changes in production and milking frequency.


• Strip yields measure residual milk after milking, an excellent indicator of milking performance and ATO setting. Immediately after milking, hand strip each quarter for a maximum of 15 seconds, measuring the milk amount from each teat. If strip yields are less than 250 mL (0.5 lb.)/cow, the cow should be considered milked out. If yields exceed 500 mL (1 lb.)/cow, milk out problems may exist. Your goal should be 40 to 100 mL/quarter. If individual quarters have high strip yields, proper unit attachment and alignment should be checked.

5. Wash system Monitor

• Chemical levels should be balanced for system size, hours of operation and type of equipment.

• Ensure your wash system is draining quickly and completely, and that the air injector is set to create a proper slug.

• Monitor quality counts and temperature, and visually inspect equipment regularly.

Other key parlor monitors

Parlor shift reports. Customize a report to monitor progress toward your goals. Average milk flow rate, average unit on time, milk/stall/hour and time to milk are excellent monitors.

Teat end scoring. Scoring can identify incidence of hyperkeratosis and other teat health problems.

Scheduled maintenance. Have a complete list of scheduled maintenance, indicating who will be responsible for each task and how often it must be performed. Enlist the help of your equipment dealer to ensure proper equipment maintenance. Perform a system check at least once a year using NMC guidelines.

As changes in your herd, management, procedures, equipment or goals occur, changes in equipment settings may be needed. Monitoring and regular maintenance will keep your milking system working at peak performance and keep you informed of changes that should be made.

Reducing Dairy’s Carbon Footprint

U.S. dairy’s carbon footprint per pound of milk produced has shrunk nearly 70% in six decades. It will get even smaller in the years ahead.

By Mike Van Amburgh, Judith Capper and Dale Bauman

The dairy industry has made remarkable progress over the past 50 to 60 years in supplying adequate, safe and affordable dairy products to a growing and changing population. At the same time, the industry’s structure and geographical distribution has undergone huge changes. There is also an increased emphasis on “environmentally-friendly” food production.
A recent report from the United Nations’ Food and Agriculture Organization implicated livestock production as a global environmental threat, because of land erosion and production of greenhouse gases that contribute to global warming. Ruminant animals produce methane, carbon dioxide (CO2) and nitrous oxide, all of which have significant global warming potential (GWP).
It’s important to recognize that methane is 25 times more potent as a greenhouse gas than CO2; nitrous oxide is 298 times more potent. That means small amounts of each gas – methane and nitrous oxide – will still have significant impacts.

Giant strides
Given the media and public interest in the carbon footprint of various aspects of society, we examined the carbon footprint of dairy production as it has evolved during the past 60 years. This is an important exercise for the dairy industry, giving context to any GWP number. A snapshot of dairy production’s carbon footprint might unintentionally mislead a retailer or consumer, since few values exist for comparison.
A number of reports have been issued during the past several years, primarily from the United Kingdom and European Union, regarding the carbon footprint of various production strategies. In general, they showed an average value of 1.4 lbs. of CO2 equivalent per pound of milk produced. Many of these reports exclude the cow’s CO2 production, assuming that because cows are vegetarians and consume plant materials, their CO2 production is recaptured and recycled.

Fewer cows, more milk
Two of the biggest changes in the dairy industry since the mid-1940s have been the dramatic increase in the amount of milk produced per cow and the dramatic decrease in the number of cows required to produce a given amount of milk. Consider:
• In the mid-1940s, approximately 25 million cows averaged about 4,500 lbs. of milk per lactation. The U.S. population was 138 million people.
• Today, about 9 million cows produce approximately 20,000 lbs. of milk per lactation. The U.S. population is more than 300 million.
• That’s 2.2 times as many people, with 59% fewer cows.
What does this mean for the overall resources required to produce a given amount of milk? Our work shows that dairy production systems in 1944 required two-to-four times the amount of various resources and produced two-to-four times the amount of excreted nutrients and emissions compared to 2006. There were approximately 4.1 times as many cows producing milk for 57% fewer consumers. Those cows required 4.5 times as much land and produced 2.6 times more methane.
This is a significant change in resource allocation, and demonstrates the tremendous efficiency increase the dairy industry has made.

Bottom line footprint
In 1944, the calculated CO2 production was 10 lbs. per 1 lb. of milk. Compare that to 2006, when the calculated CO2 production was 3 lbs. per 1 lb. of milk, nearly a 70% decrease.
How have dairy producers achieved this reduction in the carbon footprint of dairy production? Most of it relates directly to all the things that have increased milk per cow: genetics and artificial insemination, forage quality, better nutrition, grouping strategies, improved heifer rearing and use of technologies such as recombinant bovine somatotropin and Rumensin. All these things have increased milk per cow and enabled production of more milk with fewer cows.
This is a remarkable achievement, but the dairy industry has opportunities to reduce its footprint even more through advances in nutritional strategies.

• Mike VanAmburgh is an associate professor, Judith Capper is a post-doctoral research associate and Dale Bauman is Liberty Hyde Bailey Professor in the Department of Animal Science at Cornell University.  Reach VanAmburgh via phone: 607-254-4910 or e-mail: Contact Bauman via phone: 607-255-2262 or e-mail:

Insure your margin

Editor’s note: This article originally appeared in the November 2007 issue of Midwest DairyBusiness.

LGM-Dairy will allow dairy producers to purchase “margin” insurance

By Dave Natzke

Most dairy industry experts forecast moderating milk prices in 2008. With volatility in feed costs due to ethanol and export demand and the uncertainty of weather, dairy producers may be looking at ways to lock in profit margins.
One tool available to many producers in mid-2008 will be a newly approved, federally reinsured dairy insurance program run through the Federal Crop Insurance Corp., called Livestock Gross Margin for Dairy (LGM-Dairy).
According to Bruce Babcock, professor of economics and the director of the Center for Agricultural and Rural Development at Iowa State University who helped design the program, LGM-Dairy will provide protection against unexpected declines in gross margin on a targeted quantity of milk. The critical word in the equation is “margin.” Coverage is not based on a specific milk price or specific feed prices.
LGM-Dairy does not protect milk producers against anticipated declines in milk prices, or increased feed costs, Babcock warned. Nor does it protect against multiple-year declines in milk prices or increased feed costs. And, it does not insure against cattle death loss or any other cause of production loss or damage.

Margin projections
To determine margin, the producer must project the market value of his/her milk, as well as feed costs, on a per hundredweight basis. LGM-Dairy covers the difference between the gross margin submitted by the producer and approved by an adjuster, and the actual gross margin.
The all-milk price will be determined based on the simple average of daily settlement Class III milk futures on the Chicago Mercantile Exchange (CME) for a designated period. Producers will then add any basis, including premiums, to come up with their individual milk price. According to Babcock, Milk Income Loss Contract payments are not included.

Feed cost projection
To accurately determine feed costs, costs must be converted into:
• Energy: tons of corn equivalent
• Protein: tons of soybean meal equivalent
When determining actual feed costs, the corn price will be determined using a three-day average settlement price on Chicago Board of Trade (CBOT) corn futures contracts, plus a predetermined basis adjustment that varies by month and state, established by USDA’s Risk Management Agency.
For example, for a policy sales closing date of Feb. 25, the expected corn price for July in Maryland equals the simple average of the Feb. 24-26 CBOT daily settlement prices for July futures, plus the Maryland corn basis for July (+44¢/bushel).
For corn months without a futures contract, the corn price calculation will use futures contract prices for the two surrounding months that have futures contracts, plus the state-specific basis for the month.
For example, for a March 31 sales closing date, the expected corn price for April in Kansas equals the average of settlement prices for March and May CBOT futures contract prices over the last three trading days of March, plus the April Kansas corn basis.
The soybean meal price will be based on CBOT soymeal futures prices. There is no basis adjustments for soybean meal prices.

How much milk?
The final factor is the amount of milk to be covered. A producer can insure any amount of milk for which he or she has adequate dairy cattle to produce, designating a monthly maximum “Approved Target Marketings” total on the policy application. Total milk to be covered must be certified by the producer and is subject to inspection by the insurance company.
Target marketings must be submitted for each month. Failing to submit a Target Marketings Report by the sales closing date for the applicable insurance period means the amount of milk covered for that period is zero.

Ready to purchase insurance
Armed with the projected margin (expected milk price minus expected feed cost per hundredweight), the producer is ready to apply for margin insurance. USDA’s Risk Management Agency will validate price and margin data, and LGM-Dairy policies will be sold on the third to last business day of each month.
Producers have the option of either signing up for month-to-month coverage, or sign up for year-long coverage. There are 12 insurance periods in each calendar year, and each insurance period runs for 11 months. Coverage begins on producer’s milk one full calendar month following the sales closing date, provided the premium for the coverage has been paid in full.
For example, for a July 28, 2008 sales closing date, coverage begins on Sept. 1, 2008 and covers milk produced through July 31, 2009; or the last month of the insurance period in which the producer has submitted target marketings; or as otherwise specified in the policy.
If the end date is on a Saturday, Sunday or federal holiday, or, if for any reason the relevant report is not available on the day of the ending period, then the actual ending value will be based on the most recent reports.
After application acceptance, the producer may not cancel this policy for the initial insurance period.

Premiums, deductibles
Premium cost depends on a number of variables:
• amount of coverage selected
• producer’s marketing plan
• level of futures prices
• amount of price volatility
Premiums are set so that the producer gets out what he puts in over the long haul. In times of high price volatility, premiums will be high. Producers who insure 10 months together will pay less than producers who insure month to month.
As with virtually any insurance policy, dairy producers can select a deductible level to manage premium costs. Producers who insure 100% of their margin will pay more than those who take a deductible. Allowable deductibles range from $0.00-$2.00/cwt., in 10¢/cwt. increments.
The premium for the initial insurance period is due with the application. In subsequent insurance periods, if the premium is not paid in full by the applicable sales closing date, the target marketings will be reduced to zero for each month of the insurance period, and no coverage will be offered.

In the case of a payable loss on insured milk, producers will receive a notice of probable loss approximately 10 days after all actual gross margins applicable for the insurance period are released by USDA’s Risk Management Agency. Producers must submit a marketing report and sales receipts showing evidence of actual marketings within 15 days of receipt of the notice of probable loss.
Payment will be determined by subtracting the actual total gross margin (actual milk price minus actual feed cost per hundredweight) from the gross margin guaranteed by the policy. If the result is greater than zero, an indemnity will be paid.
In the event that the total of actual marketings are less than 75% of the total of targeted marketings for the insurance period, indemnities will be reduced by the percentage by which the total of actual marketings for the insurance period fell below the total of targeted marketings for the period.
Failure to provide written, verifiable records or accurately report actual marketings or other information will disqualify the producer from receiving indemnity payments. Payment will not be made on any milk above the volume designated for the coverage period.

LGM-Dairy will offer producers two advantages, according to Babcock:
• Convenience: Producers can sign up 12 times per year and insure all milk they expect to market over a rolling 11-month insurance period.
• Customization. LGM-Dairy can be tailored to any size dairy.

LGM-Dairy has limited underwriting capacity, and will be distributed on a first-come, first-served basis. Policies will not be sold after capacity is full.
In addition, LGM-Dairy is not available in all states. Producers in 30 states are eligible to participate, including:
• Midwest: Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
• Northeast: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and West Virginia.
•West: Arizona, Colorado, Kansas, Montana, Nevada, Oklahoma, Texas, Utah and Wyoming.

■ Bruce Babcock is professor of economics and the director of the Center for Agricultural and Rural Development  at Iowa State University. Contact him via phone: 515-294-6785 or
■ A list of participating insurance companies will be posted on the USDA Risk Management Agency web site,

Is it more than just the summertime blues?

Independent dairy producers tend to think they can ‘power through’ a stressful period. Be aware of signals if conditions are going beyond normal stress on you, your family members or employees.

By Dave Natzke, Editor

Feed costs are high and profit margins are tight. The hay is ready to cut, but there’s rain in the forecast. And your wife’s favorite brother didn’t show up for his shift in the milking parlor – again. Got stress?

We all feel anxious or under stress at times, and mild stress can keep us alert and focused. However, severe stress over a lengthy period can disrupt lives and lead to physical and mental health problems. 

Becky Wittig, business and community outreach coordinator with Mental Health America, Milwaukee, Wis., warned dairy producers attending the 2008 Professional Dairy Producers of Wisconsin Annual Business Conference to be aware of signals if conditions are going beyond normal stress. 

Wittig said it’s important to identify signs of stress and specific stressors, and learn methods for a balanced life.

“Stress is an adaptive response in which a person’s body and mind prepares or adjusts to a threatening situation,” Wittig said. 

Stress may result as a reaction to relationships, responsibilities, losses, expectations, change, lack of recognition or unexpected interruptions. 

There are both good and bad kinds of stress, but the body can’t tell which is which, so it reacts in the same way. Physical reactions include release of stress hormones, increased alertness, eyes dilate, heart rates increase and digestion decreases. Blood flow decreases to the stomach, but increases to the legs and arms to prepare for the “flight or fight” reaction.

“A natural part of life, stress is also in the eyes of the beholder,” Wittig said.

Stress-hardy individuals view stressors as challenges and opportunities, feel in control of there circumstances and perceive they have resources to make choices and influence events. They generally have a good social support system and have an exercise routine, regular sleep patterns and a healthy diet.

But what about those less stress hardy?

“Bad” stress, or distress, can be acute (short duration) or chronic (long duration). Symptoms may include fatigue, irritability, headaches, muscle loss and lack of focus or function. People under stress are more prone to accidents and injury.

The hazards of chronic stress may include a weakening of the immune system resulting in a number of health issues, from allergies and ulcers to headaches, asthma and high blood pressure. When not handled properly, stress can trigger or compound issues related to mental illness, including depression or anxiety disorders.



“Depression is more than the blues,” Wittig said. “When the ‘down’ mood lasts for more than a couple weeks, the condition may be clinical depression, a serious and common illness that affects how you think and feel mentally and physically.”


Signs of depression include:

• nervousness or “empty” feeling

• feelings of guilt or worthlessness

• feeling tired or run down

• feeling restless or irritable

• don’t enjoy the things you used to

• feel like nobody loves you

• feel like life is not worth living

• sleep or eat more/less than usual

• have persistent aches and pains

If you, a family member or employee are affected by five or more of these for periods of two weeks or more, it’s time to seek medical help, Wittig advised.


Stress or anxiety disorders

Wittig said anxiety disorders – overwhelming fears that are chronic, unrelenting and progressive – grow worse in stressful conditions, interfering with occupational or social functioning. It’s the most common mental illness in the United States, affecting more than 40 million people. Causes may include: physical/genetic preconditions; highly stressful life expectations; unhealthy lifestyle choices; acute or chronic physical health problems; or underdeveloped stress management skills.

Mental health disorders – depression, anxiety disorders, eating disorders and/or substance abuse or dependence – may and do occur at the same time.

Mental illness changes the person’s thinking, feeling or behavior (or all three) and that causes the person distress and difficulty to function, interfering with carrying out daily activities.

“There are lots of misconceptions and misinformation regarding mental illness,” Wittig said. Admitting to being affected by mental illness carries a public stigma.

Mental illness is real, common and treatable, Wittig explained. It actually has a better ratio of treatment success than heart disease, she said. However, because most people – especially independent business managers – believe they can “tough their way through it,” two-thirds of those affected do not seek treatment.

What can you do if an employee or family member exhibits signs of depression or anxiety disorders? 

Be aware of the signs, and educate yourself and others about the illness, symptoms and treatments, said Wittig. Help the person get appropriate diagnosis and treatment. Offer support, reassurance and hope, and have realistic expectations.


Managing stress

Mental health – and mental illness – ebb and flow throughout the day, depending on the introduction or relief of stressors. To manage stress, Wittig suggested the following:

• plan ahead. Eliminate activities that are unnecessary.

• set limits. Learn to say “no.”

• list tasks and prioritize them. Do one thing at a time.

• deal with the “basics.”

• develop a list of things that fulfill you, and another list of things that “drain” you. Focus on the first list, and be aware of the second.

• refrain from negative thinking.

• take time for yourself.

• share your feelings

• maintain a circle of support

To manage work stress, take quiet time for reflection and preparation; take occasional breaks; emphasize communication; focus on what you are eating and what you are listening to. Take time to wind down or slow down.

Finally, Wittig said, focus on the things you can control.

“Most of the troubles we bring on ourselves are things we worry about that we can’t control. Worry about the things you can control.”




• Becky Wittig serves as the business and community outreach coordinator with Mental Health America, Milwaukee, Wis. Phone: 414-276-3122 or 877-642-4630. E-mail: Web site:

• Professional Dairy Producers of Wisconsin (PDPW) is a dairy-producer founded organization that provides educational programs and services to fellow dairy producers. Phone: 800-947-7379. Web site:




Beat Mastitis With Records

An Udder Health Management package adds a new tool to help prevent future mastitis infections. By Dave Natzke

Can a DHI report prevent mastitis infections? Ron Curran, AgSource Cooperative Services manager of market development, believes it can.”Typically, most producers use SCC information for treatment and culling,” Curran said. “This is an expensive and ineffective way to fight mastitis problems.”
AgSource’s Udder Health Management (UHM) Package, including a UHM Summary (Figure 1) and UHM Cow Report (Figure 2), provides a new approach to udder health management and mastitis prevention.
“These reports provide a sensitive and accurate tripwire to let you know when and where problems are,” Curran explained. “Combining these reports with milk culturing gives you some powerful tools to prevent future infections.”
By the time a noticeable rise in a herd’s bulk tank SCC is seen, the opportunity for early intervention is missed and an infection can become entrenched. Once established, mastitis is a menacing disease that can take years to bring under control. Preventing infection establishment underscores the value of early detection. Early and accurate signals are equally important for knowing when things are improving. Using the new reports, the dairy management team can determine a herd’s subclinical mastitis profile, trends and the effects of recent management changes.
Throughout the reports, a cow is considered subclinically infected if her SCC is equal to or greater than 200,000 cells/milliliter. Risk groups are color coded throughout both reports to match the Udder Infection Summary areas, making it easy to track problems. The darker blue area represents fresh cow infections (5-40 days in milk, or DIM); the light blue area indicates new infections occurring after the first 40 DIM. The burgundy area quantifies the number of chronic infections (two or more consecutive tests, including the current one, equal or grater than 200,000). The most recent test day is on the right.
For this example herd, the Risk Group Analysis graph (in Figure 1) makes it easy to see infections have dropped over the past year, and new infections have dropped over the past two months.
The new infection rate is the most important number to monitor on the whole report, Curran said. If this number is equal to or greater than 20%, the producer should take immediate action to identify the cause of the new infections.
Previously, AgSource’s udder health management report defined new infection rates by dividing the number of cows having their first SCC test this lactation > 200,000 by the number of cows on test that month. Cows coded as “Condition Affecting Record (CAR)” were not included, even though many of these cows were off their usual production because they were sick, perhaps due to mastitis infections.
The new report does not ignore the dynamics of previously infected cows that later dropped below 200,000 SCC. Consequently, the new report categorizes new infections as any cow equal or greater to 200,000 this test whose previous milking test day SCC was less than 200,000. The denominator reflects an “at risk group,” including only uninfected cows on the previous test day. CAR cows are also included.
Infection rate example
Milking cows on test day 100
Cows with new infections 10*
(have been infected earlier in this lactation)
Cows with new infections 15
(first time this lactation)
Chronically infected cows 30
New infection rate
Using the old/ conventional way 10/100 or 10%
New methodology 25/70 or 36%

* two of these cows were coded as “Condition Affecting Record” or CAR

The report’s New Infection Rate is a better reflection of this herd’s udder infection status. To make the calculation more accurate, if a cow’s first test after calving is equal to or greater than 200,000 SCC, AgSource goes back to the last test of her previous lactation. If she was infected then, she is not a new fresh cow infection; she is a chronic infection. This may help head off wasting time and money trying to correct a fresh cow new infection problem that was actually an incurable chronic mastitis issue.
From herd level to cow level
While the UHM Summary gives an overview of the herd, the UHM Cow Report provides detailed information on individual cows.
“The UHM Summary is a herd or group management tool to identify problems,” Curran explained. “To take problem solving to the next level and identify solutions, you need to get to the cow level.”
Using the same color coding as the UHM Summary, the UHM Cow Report divides all subclinically infected cows into the same groupings.
Producers can then identify the cows contributing to the rise in herd chronic infections. Pat Baier, AgSource vice president of DHI Operations adds, “We removed the ‘Predicted % SCC Contribution to Bulk’ column, what everyone called the ‘Hot Cow List’, and put it on the Chronic Cow List (see Figure 2) to help prevent members from making decisions based on one high SCC test. High SCC values move around a lot, and by putting the ‘% Contribution’ column in the Chronic Cow List, users get more complete information on chronically infected cows.”
The Chronic Cow List provides valuable information to help identify which cows to cull; reproductive status; production ranking in the herd; present production; DIM; and a summary of subclinical infections over the last two lactations. An additional benefit: the UHM Cow List makes it easy to pick the right cows to culture. Cows in the Fresh and Lactating Cow New Infection Lists and Response to New Infection List (see Figure 3) are excellent candidates for culturing for two reasons, Curran said. First, culturing chronic cows provides bacteriological information with lots of lag time; new infection cultures profile the most recent causes of infections. Second, the possibility of using culture results for successful treatment is much higher in new infections compared to chronically infected cows. Culturing information narrows the solutions you need to focus on:
1) If results point predominantly to environmental infections, the goal is to protect the cow’s teat end from being overwhelmed by bacteria and to make sure teat dip covers the entire teat end.
2) If infectious mastitis predominates, have your milking equipment checked by a technician during milking and follow their recommendations. Also, be ready to overhaul your herd‚Äôs milking technique and specifically udder preparation. Again, make sure teat dip covers the entire teat end. Consider culturing all cows with an SCC >200,000 to identify cows infected with these “cow-to-cow” infections and consider grouping them so they are milked last. “After implementing these steps, monitor “New Infection Rates.” If they start dropping, keep doing what you are. If they aren’t, develop and implement a Plan B, Curran advised
Contact Ron Curran, AgSource Cooperative Services’ manager of market development, phone:
608-845-1900 ext. 5219, or e-mail:

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Stillbirths disastrous for dairy profitability

The loss of a calf is only the beginning of the negative impacts of stillbirths, Michael O’Connor noted in Penn State’s Dairy Digest. Longer-term consequences include increased incidence of postpartum disorders, including prolapsed uterus, uterine infection and displaced abomasum. These events result in prolonged days to conception and increased cull rate.
Cows that had stillbirths were 41% more likely to be culled, according to 2007 Cornell University research, which studied 13,608 calvings on seven dairy herds. The research also found cows with stillbirths had a 24% lower rate of becoming pregnant, and a difference in mean days open of +26 days compared to cows giving birth to live calves.
If there was just an occasional stillbirth, the problem might not cause such concern. But a 2000 Iowa State study including data from 666,341 births on U.S. farms found 7% of Holstein calves die within 48 hours of birth, O’Connor wrote.
The Cornell and Iowa State research identified parity and calving ease as major risk factors for stillbirths. In the Cornell study, the incidence of stillbirths on seven dairies was 6.6%, ranging from 4.1% to 10%. Stillbirths among first-parity cows was 10.7%, compared to 3.6%, 5% and 4.2% for second, third and fourth parities, respectively. The rate of stillbirths by calving ease ranged from 3.6% to 60.1% in the Cornell study. The odds of stillbirths were 88% lower for unassisted calvings compared to assisted calvings.
“Since calving ease score is significantly related to stillbirth, any management intervention to reduce the incidence of difficult births should reduce the incidence of stillbirth,” O’Connor said. Use sire and daughter calving ease information when selecting sires to breed heifers to reduce the risk of dystocia.
Other tips include:
• Review calving procedures to ensure proper timing and calving assistance techniques are used.
• Post standard operating procedures for calving.
• Evaluate feeding management so heifers and cows are in the best condition possible at calving.
• Provide enough space and clean, dry bedding to minimizes stress.