Archive for May, 2009

LGM-Dairy to get easier

Changes to the Livestock Gross Margin (LGM) for Dairy program will make it simpler to use, said Alan Zepp, risk management specialist of the Center for Dairy Excellence. Those changes go into effect July 1.
Producers will have the  option of using their own feed prices or using the default feed coefficients added for the LGM for Dairy program. Currently, producers calculate their basis and convert their own soybean and corn purchases into feed coefficients.
The window to purchase a policy will be extended from a 12-hour period to a 24-hour period each month. Prices are announced the last business Friday of each month – producers will have until 8 p.m. the next evening to purchase a policy based on those prices, Zepp said.
For more information, talk to a crop insurance agent. A list of agents authorized by insurance providers to write LGM for Dairy policies can be found on USDA Risk Management Agency’s website: www.rma.usda.gov.
Contact Zepp at 717-346-0849 or email: azepp@centerfordairyexcellence.org.

Organic dairies facing financial challenges, too

Source: USDA Livestock, Dairy and Poultry Outlook, May 19, 2009

The organic dairy sector has seen strong growth in recent years, with the number of specialized organic dairy farms increasing by 79% from 2002 to 2007 (USDA Agricultural Census).  Land used for organic production on specialized organic dairy farms increased by 85%, and total organic dairy product sales increased by 83% over the same period. 

 

U.S. organic milk producers have suffered much the same fate as conventional milk producers: falling milk prices and high feed and energy costs.

U.S. organic milk producers have suffered much the same fate as conventional milk producers: falling milk prices and high feed and energy costs.

Like the conventional dairy sector, the organic dairy sector is composed of all types of dairy farms. Small organic dairy farms that grow most of their own organic feed can be found predominately in the Northeast and Midwest, whereas the Western United States. is home to several larger dairies that rely more heavily on purchased organic feed. All organic dairy cows must have access to pasture, per USDA regulations.  There is a limited, but growing, amount of data available on organic dairy production at the national level. However, examining the three states with the highest number of organic dairy farms, Wisconsin, New York and Vermont, can shed some light on the current market situation. 

 

U.S. organic milk producers have suffered much the same fate as conventional milk producers: falling milk prices and high feed and energy costs. The March 2009 USDA Economic research Service monthly Milk Costs of Production estimates for conventional dairies in Wisconsin, Vermont and New York were, on average, $21.54/cwt., $24.94/cwt., and $26.55/cwt., respectively.

Organic dairies, on average, have higher production costs by about $5-$7/cwt.   Thus, implied production costs for organic dairies in the three states can be approximated at $27-29/cwt. (Wisconsin); $30-32/cwt. (Vermont); and $32-34/cwt. (New York). 

According to the Northeast Organic Dairy Farmers Association (NODPA), as of April 2009, pay prices for organic milk by the three largest processing plants in the region (HP Hood, Horizon Organic and Organic Valley) will average about $27.43/cwt.  At current estimates of production costs, organic dairy farmers in Vermont and New York are losing about $4/cwt. and $5/cwt., respectively.  The average milk price paid to dairy farmers by the two largest organic processors in Wisconsin (Organic Valley and Horizon Farms) is currently $24.63/cwt.  At that price, the average loss for Wisconsin organic dairy farmers is $3/cwt.

Costs vary greatly across farms and production methods.  Farms that rely more on purchased feed inputs can expect to see greater losses than farms that rely more on pasture-based feeds.  Organic dairy farmers use fewer feed concentrates and more forage than conventional producers; however, the purchased feed they do use has a higher per unit cost since it must be certified organic feed.  For example, prices published by USDA’s Agricultural Marketing Service at the beginning of May 2009 show Upper Midwest organic feed grade corn at about $7.48/bushel, yet conventional No. 2 yellow feed corn was about half the price, averaging $3.90/bushel in Chicago. 

While organic milk and dairy products have a higher cost of production, they also receive a higher price at the farmgate as well as the retail level.  Organic dairy producers earn an average $15/cwt. premium for their product in Wisconsin, Vermont and New York  over conventional milk and, at the retail level, organic milk prices currently average  over twice the price of conventional milk.  Organic milk accounts for about 6% of retail milk sales and is widely available at all types of outlets, from big-box stores to conventional supermarkets to small independent retailers.  Many supermarkets now offer both private label and branded organic milk products.   

Organic milk retail prices vary substantially by region and brand, but have remained  at a premium to conventional milk prices.  In April 2009, a half-gallon of organic  whole milk in the U.S. retailed for $3.79 on average, compared with approximately $1.64 for conventional whole milk.   Conventional milk prices have declined almost 12% from the beginning of 2009 to the present (May 2009).  Organic milk prices have been steadier, with roughly a 2% decline during the same period.   

Organic milk sales showed strong growth during 2008, with an annual increase of 23% for organic whole milk and 19.7% for organic reduced-fat milk, according to USDA’s Dairy Market News.  Sales of both conventional whole milk and reduced-fat milk also increased during 2008, but at a significantly lower rate compared with organic milk sales.  Conventional whole milk sales increased by 1.2% and conventional reduced-fat milk by 3.6% in 2008.

IDFA: Assessment rule means imports must be promoted, too

New rule requires dairy checkoff program to promote domestic and
imported dairy products to avoid trade infraction

After a lengthy period of opposing a call to impose a dairy checkoff assessment on imported dairy products,  the International Dairy Foods Association (IFDA) applauded USDA’s proposed rule, saying it addresses trade concerns. At the same time, IDFA
cautioned the proposed rule could significantly change the current program that promotes only U.S. dairy products. 

Thee changes are included in a proposed rule to implement an assessment
on dairy imports that was included as a provision in the 2008 Farm Bill. That bill stipulated that the assessments could  only go into affect if implemented in compliance with U.S. trade obligations. 

IDFA president and CEO Connie Tipton complimented U.S. ag secretary Tom Vilsack 
and U.S. Trade Representative Ron Kirk for working together to consider
the important trade  issues caused by the new law. She also complimented Sens. Tom Harkin (D-Iowa), chair of the  Senate ag committee, and Max Baucus (D-Mont.), chair of the Senate finance  committee, who insisted that the dairy import assessment should not violate U.S. trade  obligations. 

“Clearly the Senate and Obama administration understood the importance
of preserving our U.S.  dairy export markets by ensuring that we do not implement policies that are not in compliance with our global trade rules,” said Tipton. “One of the consequences of the new rule is that the  program’s focus can no longer be to promote only U.S. dairy products. This is one of the reasons  why IDFA strongly opposed the import assessment.” 

Under the new rule, the definition of milk would change from milk produced in the United States  to all milk, regardless of its source, IDFA said. As such, the Dairy Board would no longer be able to limit its  promotion efforts to domestic milk. Some examples of the changes that would be required under  the new rule include the expansion of the “Real Seal” promotion to allow its use on all dairy  products, including those that are imported; and supplier contact information would no longer be  constrained to U.S. manufacturers, as is done today on websites that are funded through the checkoff program.

The rule also would expand the Dairy Board to include two importer members. Importers would  be allowed to use one-third of the required import assessments for
qualified national and regional  programs that promote imported dairy products.

USDA has asked to receive comments on the proposed rule by June 18,
2009. The proposed rule  is available at  http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetail&o=090000648099fce1. 

6/09 Accounting for Profits: Passing thoughts

By Bob Matlick

 

“Farming is becoming more of a business than a way of life. To compete in today’s market, producers must understand everything from genetic crop engineering and satellite mapping of soil to hedging on futures exchanges and how international markets impact local markets.”

Bob Matlick, CPA, is a partner in the Agriculture Department with Moore Stephens Wurth Frazer and Torbet, LLP,  in Visalia, Calif. Contact him by e-mail at: bmatlick@mswft.com or call, 559-732-7140.

Bob Matlick, CPA, is a partner in the Agriculture Department with Moore Stephens Wurth Frazer and Torbet, LLP, in Visalia, Calif. Contact him by e-mail at: bmatlick@mswft.com or call, 559-732-7140.

After reading this quote in Scythe and Spade Co. Spring 2009 Agriculture Newsletter, I began to think about my 30 years in agriculture finance and consulting. While not specific to the dairy industry, I believe the statement holds true to any agriculture enterprise – especially dairies.

The “average” size of a dairy continues to rise on an annual basis, with the average California exceeding 1,000 cows for the first time, compared to an average herd size of approximately 275 cows when I began my career in 1978. It is not uncommon for dairies to be 4,000 to 6,000 cows, plus replacements. With the larger operations, the issues of running a business become more burdensome, expending the energy and time of the owner/operator.  Here are some thoughts I reflected on recently.

Finance/lenders

Gone are the days of the lender coming to a dairyman’s house to discuss the issues at hand, borrowing needs for the upcoming year and assisting in the preparation of a two-page balance sheet. Lenders now require accrual basis financial statements on a quarterly or semi annual basis prepared by accountants, monthly borrowing base reports, not to mention answers to borrowing covenants that are out of compliance. These tasks require assembly of information, understanding that information and in times of economic distress lengthy negotiations. Additionally, there are a multitude of various interest rate options that can change over a short period of time that must be tracked, evaluated and acted upon.  The days of prime-plus-1% as the annual rate are gone.

Environmental regulations

Air and water regulations on a state and federal basis are in a constant state of flux influenced by the political authorities and special interest groups. Ongoing reports must be completed on a timely basis in an effort to stay within today’s compliance terms. Various mitigation solutions must be evaluated for efficiency and cost. All of the reporting and evaluating takes considerable time and energy from the day to day operations of the dairy, which dairy operators did not deal with in the early 1980s.

Price volatility

The Class III milk price for the period from 1980 to 1990 ranged from a high of $12.57/cwt. (on an annual basis) to a low of $11.03/cwt. or a range of $1.54/cwt.  For the period of 2000 to 2008, the Class III price ranged from a high of $18.04/cwt. (on an annual basis) to a low of $9.74/cwt. or a range of $8.30/cwt. Obviously a dairyman could project income for a 12-month period in 1985 with a much larger degree of accuracy as compared to current markets. To make matters worse, the volatility has become even more severe. The July Class III 2009 contract traded around $15/cwt. in early April 2009. Forty-five days later at the time of this writing, the July contract is trading at $11.85/cwt., a range greater than the whole 10-year period during the 1980s. The use of using the futures markets to hedge milk positions was not even a vehicle that could be utilized in the 1980s.

That is just the income side of the equation, couple the income volatility with the large swings in corn (in excess of $7 per bushel to $4 per bushel) and fuel in the past 18 months and the ability to forecast a 12-month period has become a very difficult and time consuming task on each dairy. A dairyman has had to become familiar with terms like “burn rate,” “puts,” “options,” etc. In other words a new language has entered the industry.

 

Management practices

Recombinant bovine somatotropin (rBST), sexed semen, TMR and RoundUp Ready corn were terms not heard in the 1980s. Today they are commonplace in the dairy vocabulary. Each new practice, product or technique requires evaluation and devotion of owner/management time and energy. In some cases the time expended is prolonged, with uncertain outcomes making decisions difficult. Couple the additional management challenges with the “instant” flow of information provided by laptop computers, scanners, Blackberries and cell phones and the dairy manager can be quickly overwhelmed.

 

Parting thoughts

While the average herd size has grown tremendously in the past three decades the drain on management time, energy and expertise has far surpassed the herd growth. Dairying has become a business and an owner/manager must decide on where their skills are most beneficial to the operation as a whole. Is it with the cows? Is it in the office collecting and analyzing information? Or is it overseeing a group of managers and professionals that provide input and guidance and then making the best decision possible with the best and timely information possible?  

Just my thoughts. 

 


6/09 Success Strategies: If I ran the circus…

By John Ellsworth

 

John Ellsworth of Modesto, Calif., is a consultant with the financial and strategic consulting firm Success Strategies. He can be reached at 209-988-8960, or by e-mail: je4success@msn.com.

John Ellsworth of Modesto, Calif., is a consultant with the financial and strategic consulting firm Success Strategies. He can be reached at 209-988-8960, or by e-mail: je4success@msn.com.

What a tumultuous year! Thus far, 2009 in the dairy industry has looked like a cross between two of Dr. Seuss’ children’s books. On the one hand, it parallels If I Ran the Circus, with its irrational supply and demand, particularly on commodities that are plentiful in comparison with their current usage, yet remain overpriced. On the other hand, our industry scenario seems to be replicating Mike McClintock’s Stop that Ball, with an economy that appears relatively lifeless, yet in other ways seems completely out of control when we look at the painful process of loan approvals and the dramatic changes in real estate. Hopefully, by the time you read this article, things will be appearing more normal again.

However, just in case they are not, it may a great time to reexamine your game plan and determine what your mode of action will be. Whenever I get into a situation like our current one, I like to check out what several of my favorite business authors have to say:

1. Seth Godin, in book titled, The Big Moo advises us to “stop being ordinary.” He suggests:

a) “Avidly collect  firsthand experiences” – be more observant of events.

b) “Practice the Zen Principle of ‘Beginner’s Mind’” – be open to learning.

c) “Keep an Idea Wallet so you don’t lose Momentary Insights” – i.e. write it down regularly!

d) “Be a Proactive Idea Broker and Practice Continuous Cross Pollination” – Use ideas you learn in various settings or contexts.

e) “Embrace the Power of Storytelling to bring it all Together” – Be like Medtronic, a blue chip medical technology company, who, when their team needs some motivation, they bring in patients and ask them to talk about how a Medtronic product has changed or saved their life.

2. Rudy Giuliani, former Mayor of New York City, shared the following suggestions in a presentation that I recently attended:

a) Have conviction and strong beliefs. Stand by what you know is right.

b) Be an optimist. He shared the story of the legendary Coach Vince Lombardi, who, after his team was defeated, was asked by a younger coach how it felt to lose. Lombardi replied, “Son, I didn’t lose that game. I only ran out of time!”

c) Be positive and always visualize a “hit.”

d) After reviewing what you know and anticipate, take action. As he added, courage does not equal the absence of fear. It is acting in spite of it.

e) Practice and rehearse. Have a plan in place to cover most things and even some of those you don’t normally think of.

f) Remember, teamwork is key! Ask yourself, what are my weaknesses? Where do I need help?

g) You have to communicate. Let people know what you are thinking. This holds for employees and your banker. They both need to know!

In summary, this is no time to panic:

a) Keep things in perspective. Is the economy tough? Yes, however, interest rates are quite low for now. Inflation, given the present large government borrowing, may force rates up by year end. Yet, for now they are historically low.

b) Milk prices are weak, but overall feed prices have dropped, too. Choose your ingredients wisely.

c) Remember that every complete business plan includes a successful exit strategy, too. Is this the time? As former Microsoft President Rick Belluzo stated, “Enjoy the opportunity to reinvent yourself. When I was displaced, I knew that it wouldn’t be the only hardship I’d face in my career. Rather than dread the future, I became eagerly excited. I looked forward to facing additional experiences that would require me to ‘reinvent’ myself.” This is good advice for all of us.

As you go through the process, be open to change, both within yourself and the way you run you business. I think you’ll be glad you did!

6/09 Your Dairy Checkoff at Work: Identifying sustainable opportunities

By Tom Gallagher

 

It is well understood that consumer perceptions of dairy products and the dairy industry directly impact sales. Nutrition and food safety are two such examples. Recently, another factor has risen to the forefront regarding consumer perceptions of foods and beverages (including dairy) that can positively or negatively affect sales: sustainability. 

Tom Gallagher  is chief executive officer of Dairy Management Inc.™ (DMI), the domestic and international planning and management organization that works to increase sales of and demand for U.S.-produced dairy products and ingredients on behalf of America’s dairy producers. For more information on dairy checkoff programs, visit www.dairycheckoff.com.

Tom Gallagher is chief executive officer of Dairy Management Inc.™ (DMI), the domestic and international planning and management organization that works to increase sales of and demand for U.S.-produced dairy products and ingredients on behalf of America’s dairy producers. For more information on dairy checkoff programs, visit www.dairycheckoff.com.

Market research shows that sustainability continues to grow as a factor in consumer purchase decisions. This is due, in large part, to the ever-increasing disconnect the public has with the food and beverages they consume and the people that produce them. America’s farmers and livestock producers are among our nation’s original environmentalists. You live on the land. You drink the water. You care for your animals and the land. And, while we all know that dairy producers have a longstanding commitment to environmental stewardship and animal care, many consumers don’t know this.  

In talking with thousands of dairy producers across the country over the past 12 months about the U.S. dairy industry’s sustainability initiative, we know that a growing number of producers – representing farms of all sizes – realize the business opportunity involved. Over the last year or so I’ve shared examples of how your producer investment in the dairy checkoff is helping lead the industry to identify these sustainability opportunities. 

Checkoff role in sustainability 

The dairy checkoff was created by and for dairy producers to help increase sales of and demand for U.S.-produced dairy products and ingredients – and to help maintain and build consumer confidence in dairy products, dairy producers and the dairy industry. To that end, the checkoff has funded and initiated specific efforts to support dairy’s sustainability initiative. These efforts aim to create an accurate, scientifically sound and defendable body of information that will: 

• Increase demand and sales for all dairy producers, representing farms of all sizes and all regions of the country, and

• Help safeguard against attacks from anti-dairy and anti-animal agriculture special interest groups that, left unchecked, could negatively affect the image of dairy farms and dairy producers. 

Through your checkoff investment, we have a two-fold focus on the sustainability initiative: create a body of scientific research that will be published in peer-reviewed journals that documents the dairy industry’s sustainability data, and use results to help maintain and build dairy sales. 

The research and information collected by the dairy checkoff will help national and local dairy promotion organizations: 

• Tell the story of how dairy producers are responsible stewards of the land, water and air, and care for their animals to produce safe, wholesome and nutritious milk.

• Support a life cycle assessment to document greenhouse gas emissions that will serve as a foundation to provide factual, science-based information to help protect the dairy industry from anti-animal agriculture attacks.

• Provide insights into consumer perceptions the industry can use.  

Industrywide support 

In addition to producer investments through the dairy checkoff, other key industry leaders support the initiative through the Innovation Center for U.S. Dairy. The Innovation Center brings together all segments of the industry – producers, processors, manufacturers, suppliers, packaging companies, and others – to initiate work that extends and goes beyond the checkoff’s role. This includes more than 200 staff from dairy cooperatives, processors and manufacturing companies working together on various non-checkoff funded projects.  

Additionally, National Milk Producers Federation and International Dairy Foods Association will leverage science-based information relative to sustainability to aid their efforts in the climate change policy debate; and individual companies will use this data – along with their own proprietary information – to market the best image for their products.

Dairy sustainability projects

Dairy industry sustainability projects range from crop and milk production, processing and packaging, to distribution and transportation. And, consistent with USDA guidelines, checkoff funds only support research and promotion. To fund other activities, the industry has secured nearly $4 million (through May 2009) in non-checkoff funds and other in-kind resources to support the initiative. Select projects include: 

Crop production

• Dairy Feed Systems focuses on nutrient management techniques used to produce grains and forages on dairy farms, and will guide feed production activities by facilitating adoption of agricultural best practices. 

Milk production  

• Farm Energy Audit Program (FEAP) creates a model state agricultural energy efficiency program and drives demand for energy audits by educating dairy producers about the benefits.

• Cow of the future aims to reduce enteric methane — the single largest component of the dairy industry’s carbon footprint — by accelerating identification and adoption of proven practices.

• Dairy Underground assesses the viability of turning digester-generated methane into usable energy; it also explores various technology options for reducing operational costs. 

• Dairy Power addresses barriers to methane digester adoption by coordinating cross-industry efforts to shape regulation, and conduct a market assessment to identify and prioritize regions with the greatest opportunity for methane digester adoption. 

For more information about specific projects across the dairy value chain, visit www.dairycheckoff.com

Coordinated pushback could help contain bovine bacterial diseases

By Ann Perry

Agricultural Research Service (ARS) scientists at the National Animal Disease Center (NADC) in Ames, Iowa, are in a longstanding battle against two serious bacterial infections of livestock: Johne’s disease and bovine tuberculosis.

Experts believe that almost 70% of U.S. cattle herds are infected with M. avium subspecies paratuberculosis (MAP), the bacterium that causes Johne’s disease. NADC microbiologist John Bannantine and colleagues took information from the MAP genome to assemble an array of 96 proteins. Then they used the array to identify gene sequences that might be useful in confirming a Johne’s disease diagnosis, or that might serve as targets for disease intervention and treatment.

Bannantine’s team found three proteins that consistently drew the strongest “attacks” from serum antibodies, an immune response that clearly linked the three proteins with the onset of the disease. With additional work, these antigens might provide crucial building blocks for the development of a diagnostic tool for Johne’s disease.

Meanwhile, NADC microbiologist Judy Stabel has been studying the early stages of MAP infection and finding ways to diagnose the disease in young animals. She has also helped evaluate animal models for MAP research, and has concluded that a smaller ruminant model-such as goats or sheep-shows promise.

NADC veterinary officers Ray Waters and Mitch Palmer and molecular biologist Tyler Thacker are working on several fronts to optimize bovine tuberculosis diagnostic tests and vaccinations for both wildlife and domestic livestock. For instance, Palmer is using white-tailed deer, which are a significant reservoir of bovine tuberculosis, to test experimental vaccines for potential bovine tuberculosis control in wildlife.

So far his studies indicate that vaccines can be effective in decreasing the severity of the disease, and that oral vaccination appears to be as effective as subcutaneous vaccination. But other safety issues still need to be resolved before the vaccine could be used in wildlife.

The NADC scientists have also been using neonatal calves to test human tuberculosis vaccines. This approach is cheaper and safer to use than testing in nonhuman primates.

Read more about this research in the May/June 2009 issue of Agricultural Research magazine http://www.ars.usda.gov/is/pr/2009/090514.htm.

ARS is the principal intramural scientific research agency of the U.S. Department of Agriculture.

Dairy lameness troubleshooting tool now available

Dairy producers now have access to a software program that lets them determine how to reduce lameness in their herd based on an analysis of environmental factors on the farm.

Dr. Nigel Cook, head of the University of Wisconsin-Madison School of Veterinary Medicine’s Food Animal Production Medicine section, created the “First Step” software tool, a software program that helps dairy producers determine how to reduce lameness in their herd. Zinpro, the company that sponsored production of this analytical tool, will be used by Zinpro support staff and its network of consultants world-wide to train veterinarians, hoof-trimmers and nutritionists. 

Dr. Nigel Cook, head of the University of Wisconsin-Madison School of Veterinary Medicine’s Food Animal Production Medicine section, created the “First Step” software tool, a software program that helps dairy producers determine how to reduce lameness in their herd. Zinpro, the company that sponsored production of this analytical tool, will be used by Zinpro support staff and its network of consultants world-wide to train veterinarians, hoof-trimmers and nutritionists.

            “Lameness is so complicated because many factors are involved in determining whether or not a cow gets lame and whether or not she stays lame,” said Dr. Nigel Cook, head of the University of Wisconsin-Madison School of Veterinary Medicine’s Food Animal Production Medicine section.  “To communicate where a farm is failing is really difficult.  We really needed a step-wise analytical tool.”

            Working with experts from Zinpro, the company that sponsored production of this analytical tool, Dr. Cook was able to apply his knowledge to what is now called the “First Step” software tool.

            Based on years of research, the First Step software provides a methodical way to capture data and store information.  Farmers enter data on 20 different areas that can affect cow lameness, including bedding, walking surfaces, hoof trimming, hygiene, biosecurity, freestall ventilation, and heat abatement strategies. 

Once the assessors have been identified and entered, the program goes to work.  It compares the farm’s data with industry standards.  Through a set of automated reports, this information can be used to home in on an individual farm’s problems.

            “The program helps the consultant determine the most significant areas to focus on,” Dr. Cook said.  “It’s a trouble-shooting tool.  It identifies why that farm in particular is having a problem.”

            In the past, consultants assessed hoof-trimming, stall comfort or foot-bathing in isolation, but there was a risk of missing other factors that can contribute to lameness. 

            “Nobody’s put it all together before,” Dr. Cook said. 

            After five years in development, the First Step software program will be used by Zinpro support staff and its network of consultants world-wide to train veterinarians, hoof-trimmers and nutritionists.

Adequate P and K levels critical for high-yielding alfalfa stands

Alfalfa growers need to start thinking about whether they should apply potassium and phosphorus on their fields this spring and at what rate, said two Purdue University experts.
Both phosphorus and potassium can increase yield and stand longevity, but to maximize production and profitability it’s important to adjust fertilizer rates to meet the nutritional needs of plants in each field.
Recent research at the Throckmorton-Purdue Agricultural Center showed a balance of the two macronutrients is critical to keeping a healthy alfalfa stand.
“Alfalfa removes more potassium than any other field crop, with the exception of corn silage, so growers need to pay close attention to potassium,” said Jeff Volenec, Purdue Extension crop physiologist. “An imbalance between potassium and phosphorus fertilizer can actually be more damaging when you apply phosphorus and do not apply potassium – the stand thins out more quickly, which results in added weed encroachment.”
A soil test should have been done last summer or early fall to determine the appropriate application rate, said Keith Johnson, Purdue Extension forage expert. Soil tests done in the spring do not accurately reflect the amount of potassium available to the plant, he said. 
However, if a soil test was not done last year, growers should take a sample after the first harvest, Johnson said. A list of certified commercial laboratories is available at http://www.agry.purdue.edu/ext/soiltest.html.
“It’s important to have a soil test because serious consequences, such as milk fever in dairy cows and grass tetany in beef and dairy herds, can occur from applying too much potassium,” Johnson said.
The application of potassium and phosphorus should be split – one half the total annual amount applied after the first harvest and the other half after the last harvest – to avoid luxury consumption, Volenec said. Luxury consumption means the alfalfa plant will take up more potassium than it needs. Anything more than 2 percent potassium in the forage on a dry weight basis is a waste of money and potentially dangerous to the livestock grazing on it, Volenec said.
For highly productive fields producers can anticipate applying a total of 250 pounds of potassium per acre and 25 pounds of phosphorus per acre, Volenec said.
“Growers may notice a slight reduction in forage quality because high-yielding alfalfa is slightly more stemmy, but it’s important to understand that the yield advantages far outweigh this slight reduction in quality,” he said. “Quality is a low-tier issue with well-managed alfalfa. It’s really about high yield and stand persistence. Quality will follow hand in hand if your fields yield well and have good persistence.”
At the very least, growers should replace the potassium and phosphorus that is removed from the field during the summer, Volenec said.
“For example, a grower harvests 5 tons of hay from a field this summer, which is 10,000 pounds, with 2 percent potassium in the tissue,” Volenec said. “This results in the removal of 200 pounds of potassium and, at a minimum, this grower should apply 200 pounds of potassium. Then have the soil tested in the fall and make the necessary adjustments.”
Volenec and Johnson recommend a soil test be taken every three to four years to make sure the plants have adequate nutrients available.
When applying potassium and phosphorus fertilizer, broadcast application is the route to go, Johnson said.
“Broadcast applications of potassium and phosphorus keep most of the nutrients in the top few inches of soil because these nutrients do not move vertically in most soils,” he said. “Our research shows this is not a concern because most of the fine roots active in nutrient uptake are in the top 2 inches of soil.”
The bottom line is alfalfa yield and stand persistence improve with potassium and phosphorus fertilizer, Volenec said.
“With good balanced nutrition we’ve had stands persist for six to seven years easily with really good yields,” Volenec said.
More detailed information about fertilizing alfalfa with phosphorus and potassium is available at http://www.ces.purdue.edu/extmedia/AY/AY-331-W.pdf.
Contact Volenec at 765-494-8071, jvolenec@purdue.edu, or Johnson at 765-494-4800, johnsonk@purdue.edu, for questions and additional information.

Universities to study health of organic, conventional dairy cows with $1 million grant

Three universities have launched a four-year study with nearly $1 million in funding that will examine the impact that organic and conventional management practices have on the health of cows at 300 dairy farms in New York, Oregon and Wisconsin. 

 

Jon Bansen, owner of the Double J Jerseys organic dairy farm in Monmouth, Ore., walks his cows to the milking parlor. His farm will participate in a study that will examine the impact that organic and conventional management practices have on the health of cows at 300 dairy farms in New York, Oregon and Wisconsin. Oregon State University is one of three universities conducting the research. Photo by Lynn Ketchum.

Jon Bansen, owner of the Double J Jerseys organic dairy farm in Monmouth, Ore., walks his cows to the milking parlor. His farm will participate in a study that will examine the impact that organic and conventional management practices have on the health of cows at 300 dairy farms in New York, Oregon and Wisconsin. Oregon State University is one of three universities conducting the research. Photo by Lynn Ketchum.

Researchers from Oregon State University, Cornell University and the University of Wisconsin-Madison aim to find correlations between management practices, incidences of diseases and the amount of milk produced. They’ll then use the data to develop recommendations for keeping dairy cows healthy while optimizing income and the quality of the milk.

 

“There’s not much data about the health of cows on organic dairy farms in the United States,” said dairy specialist Mike Gamroth of Oregon State University (OSU). “So this study will answer a lot of questions.” 

With $987,048 in funding from the U.S. Department of Agriculture, researchers will spend the next two years visiting each farm to make observations, review farm records and administer a questionnaire. In April, they visited their first farm, which was in Wisconsin. In New York, the first farm visit will take place later this month. In Oregon, researchers will visit their first farm in June. 

During the visits, they’ll see how many cows are pregnant, check for lameness, measure their body fat, and rate the cleanliness of the cows’ udders. Additionally, they’ll collect milk samples so they can count bacteria and screen for common infectious diseases. In particular, they’ll look for mastitis, a costly infection of the mammary gland.

Furthermore, during the 60 days before and after each visit, farmers will be asked to collect and submit data about diseases their cows may have and their economic impact on their business.

“There’s a lot of speculation about the difference between organic and conventional dairy farms,” Gamroth said. “We always automatically say if you’re organic you won’t be able to produce as much milk. I’m not sure that’s true. We need to put some real numbers on that. Also, some conventional dairy farms think that if you’re organic, disease is going to be a problem. We don’t know that for sure.”

“So we want to find out what’s true and what’s not,” Gamroth added. “But we’re not trying to point a finger at anyone.” 

Earlier this year, the universities mailed invitations to dairy farms, asking them to participate in the study. All together, they’ll conduct research on 100 organic dairy farms and 50 conventional ones in Wisconsin; 75 organic and 25 conventional farms in New York; and 25 organic and 25 conventional farms in Oregon. The dairy farms must have at least 30 cows and no more than about 500 to participate in the study. 

One of the farms that will take part in the research is Double J Jerseys in Monmouth, Ore. Owner and third-generation dairyman Jon Bansen volunteered for the study because he wants to make sure his organic dairy farm is represented. He doesn’t think, though, that he’ll learn any new management techniques from the findings because his approximately 170 cows are doing just fine, he said.

So fine, he added, that he only uses a veterinarian for vaccinations, which he keeps to a minimum anyway. He prefers natural treatments such as pine tar and tincture of iodine for hoof rot, mint oil as a salve on udders for mastitis, and aloe vera juice and tincture of garlic for uterine infections. The last uterine infection he treated was about 18 months ago, he said. 

Bansen said he feeds each cow four pounds of grain a day, and each one produces a daily average of 46 pounds of milk. Except for when they’re in a barn during the rainy winter, they spend their days and nights grazing and lying down in fields of perennial ryegrass, orchard grass and white clover. 

Bansen’s management practices comply with national organic certification standards. The USDA rules for organic certification are lengthy, but basically, to be certified as an organic dairy farm, any grain or forage that the cows eat must have been grown on land that is free of chemical fertilizers and pesticides for three consecutive years immediately preceding its harvest. Also, the cows must not have received hormones or antibiotics, and they must have access to pasture.

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