Archive for July, 2009

Production Pointers: Nutrient Management

Nutrient management

July 31, 2009

10 ways to make the most of your manure

Whether you have enough manure to fertilize all fields or not, here are some good ideas to consider this fall:

1) Conduct a corn season post-mortem. Take stalk samples for the late-season stalk nitrate test from second- or higher-year corn fields to assess nitrogen (N) management this season.

2) Take soil samples this fall (before manure application) to see where phosphorus (P) and potassium (K) are needed most. Then, prioritize fields that need N and are low to medium in P, K to take advantage of all three macronutrients in manure.

3) Analyze pH. Too much corn is grown on low pH soils. Don’t use fertilizer to compensate for a poor liming program.

4) Run the Illinois Soil Nitrate Test (ISNT), which will tell if some corn fields do not need any additional N. Fields with a long history of manure applications are potential candidates.

5) Focus on third- and fourth-year corn fields. They are most likely to need the highest N rates. If a soil test shows they need P and K too, they are excellent targets for manure.

6) Plant fall cover crops after corn silage harvest to protect soil and scavenge nutrients.

7) Decide what hay fields will be plowed for corn next year. Depending on the stand, the first year of corn may not require any N beyond 10-30 lbs./acre starter.

8) Manage manure in storage to take advantage of the ammonia-N. Spring incorporating or injecting manure before corn planting essentially doubles the N credit to that crop, halving the rate of manure required and allowing you to cover more acres or sell some to a neighbor. Fall incorporation does not offer this N conservation benefit.

9) Manure testing. Are you making major fertility decisions with only one or two manure samples per year from a manure storage? Take more samples and build a nutrient analysis database to track what happens from top to bottom and season to season with your manure.

10) Not convinced? Try some test strips in your fields to see for yourself.

For more information on these topics, see the Cornell Agronomy Factsheet Series at http://nmsp.css.cornell.edu/factsheets.

Manure, fertilizer reports offer reviews, outlooks

Two separate – but somewhat complementary reports –were released earlier this summer.

First, USDA issued a report to Congress, “Manure Use for Fertilizer and for Energy – 2009.” Next came the International Fertilizer Industry Association’s (IFIA) “Fertilizer Outlook 2009-2013.”

USDA’s report – mandated under the 2008 Farm Bill – estimates only about 15.8 million acres (5%) of U.S. cropland are fertilized with livestock manure (based on 2006 data). Corn, which is planted on about one-quarter of U.S. cropland, accounts for over half of the land receiving manure. Transportation costs and an unwillingness to accept manure from neighboring farms remains roadblocks in some areas. Find the report at www.ers.usda.gov/Publications/AP/AP037/AP037.pdf.

IFIA’s report indicates world demand of commercial fertilizers – which suffered a setback in late 2008 and early 2009 due to the downturn in the global economy and tightened ag credit conditions – should show a gradual increase, growing about 2.2% per year through 2013. The report anticipates tightening nitrogen availability in 2011-2012, although growth in production capacity – which also slowed in 2008-09 – could result in surpluses. Phosphorus and potash surpluses are seen into 2013. Find the report at www.fertilizer.org/ifa/Home-Page/LIBRARY/Publications.html/Fertilizer-Outlook-2009-2013.html.


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Use caution when spreading manure in summer

The alfalfa is in the bunker, the sun is shining, the ground is dry – should you start hauling liquid manure?

Maybe. Summer hauling liquid manure on just harvested alfalfa fields is considered by many dairy farm operators as a way to fertilize and reduce the fall workload. No doubt there are benefits.  Alfalfa and grass respond to the addition of nitrogen, phosphorus and potassium,  and a little moisture.  There are some pitfalls that all farms should be aware of before hauling on hard dry soils. To read the article by Tony Smith, resource conservationist with the Manitowow County (Wis.) Soil and Water Conservation District, visit http://dairywebmall.com/dbcpress/?p=3596.

Animal manure management could go ‘green’

A recent Texas AgriLife Research survey of Texas and California dairies found that cows, like people, are big energy users. That’s the bad news. The good news is there’s enough potential energy within the manure dairy cows produce to pay their electrical bill and more — a lot more, according to Dr. Cady Engler, AgriLife Research agricultural engineer.  Engler will present a paper, “Energy Usage Survey of Dairies in the Southwestern United States” at the upcoming Texas Animal Manure Management Issues, scheduled Sept. 29-30, at the Austin Marriott North in Round Rock.

To read the article, visit http://dairywebmall.com/dbcpress/?p=3491.

More information can be found at the conference’s Web site at http://grovesite.com/tamu/tammi.


Production Pointers: Herd Health

Herd Health

July 30, 2009

Monitor individual SCC to improve herd health

The measure of somatic cell count (SCC) is critical in determining udder health. According to the National Mastitis Council, a herd with a bulk tank SCC of 200,000 cells/mL or greater is considered to be producing “abnormal” milk (1). Higher counts indicate infection and are associated with decreased production. For example, a herd with a bulk tank SCC of 500,000 can be expected to have 16% of its quarters infected with varying degrees of subclinical mastitis, with a 6% reduction in milk production.(2)

While routine bulk tank SCC testing is a good measure of the general status of your herd’s udder health, it doesn’t tell you what to do about those high numbers.  Identifying problem cows, determining factors contributing to high SCC and developing a management plan for them starts with individual cow screening tests and can lead to better treatment success rates and higher premiums. Because mastitis is frequently subclinical or “hidden,” several tests are available to detect mastitis by estimating the SCC of a milk sample.

“Detecting subclinical mastitis earlier in its process is a top goal of individual SCC testing,” said Bradley Mills, DVM, Dairy Veterinary Operations, Pfizer Animal Health. “If you can catch the infection sooner in individual animals and choose to treat that animal, your treatment success rate will be higher.”

Testing options

“Whether to test composite milk samples or individual quarters depends on each operation’s strategy,” Mills continued. “If you’re going to make the decision to treat an animal, you should screen each quarter and then treat only the quarter(s) with the high cell count. Producers may spend more on upfront diagnostics, but end up saving that in treatment costs.”

Mills noted there are several options available for individual animal testing. For example, the DeLaval cell counter provides accurate results within a few minutes. Producers take a sample from a quarter, draw the milk into a cartridge, insert it into the cell counter machine and a few minutes later you have an SCC detection from 10,000 up to 5 million. The California Mastitis Test (CMT) also is an option if used properly. Due to its sensitivity, handlers need to be precise in order to get an accurate reading.

Francisco M. Rivas, quality milk manager, Pfizer Animal Health, added, “If a producer wants to focus on milk quality, there is so much information to be gleaned from individual SCC and milk component tests. Not only can you monitor infection and cure rates, you can also track butter fat and protein ratios, which help pinpoint other issues.”

The key is monitoring the data on a regular basis to get the most value out of it. “If a producer is monitoring infection rates and individual SCC, he knows which cows are contributing the most somatic cells to a bulk tank,” Rivas explained. “Finding out which cows likely have subclinical mastitis gives producers more options including pursuing an extended therapy treatment.”

Finding the cows that are chronically infected early may also increase the lifetime value. “Constant infection can lead to scar tissue that never recovers when a cow dries up leading to lost production every year.” Rivas said.

Work with your veterinarian to help you with individual SCC testing and to develop and implement a program to successfully control subclinical mastitis in your herd.

The Pfizer Animal Health Dairy Wellness Plan is a 365-day approach to managing your dairy operation that focuses on the health of the dairy animal, the economic health of the dairy and the appropriate use of animal health products leading to a safe and healthy food supply. For more information on the Dairy Wellness Plan, visit www.dairywellnessplan.com.

(1) Smith KL, Hillerton JE, Harmon, RJ. NMC guidelines on normal and abnormal raw milk based on SCC and signs of clinical mastitis. Madison, Wis.: National Mastitis Council, 2001.

(2) Eberhart RJ, Harmon RJ, Jasper DE, Natzke RP, Nickerson SC, Reneau JK, Row EH, Smith KL, Spencer SB. Current concepts of bovine mastitis. 3rd ed. Arlington, Va.: National Mastitis Council, 1987.

Source: Pfizer Animal Health (www.PfizerAH.com)


Basic biosecurity reduces disease risk

If you have an established dairy herd, the biggest risk factor for introducing diseases is from new animals.  What’s the solution, since not every herd can be completely isolated, and sometimes animals needed to be added to the herd or returned after being shown at the fair?

The answer: practicing basic biosecurity, according to Michigan State University (MSU) Extension educator Ben Bartlett and Dan Grooms, MSU Department of Large Animal Clinical Sciences.

Good biosecurity is not a guarantee, but can greatly decrease the chance of spending significant time and money and experiencing huge amounts of lost income to new disease issues. No one can build a perfect barrier, but like most issues, the biggest benefit is doing some of the simple and low-cost items that can provide the greatest risk reduction. It is not important to have perfect biosecurity but it is critical to have basic biosecurity.

Biosecurity is four simple steps:

1. Test. Screen for diseases, such as Staph mastitis, BVD-PI and Johne’s.

2. Isolate. 30 feet for 30 days. A great rule of thumb is feed and handle new animals last.

3. Sanitation. Clean and disinfect before coming onto farm or when moving between older and younger groups of animals.

4. Immunity. Build immunity. If sanitation is the fence, then vaccination is the guard dog.

Test, isolate, sanitation and immunity (TISI): The most important part of biosecurity is putting TISI  into practice, every day and every time an animal comes on to your farm – no exceptions.

If you would like to learn more about biosecurity practices, visit the National Animal Health Monitoring web site at http://nahms.aphis.usda.gov/dairy/dairy02/Dairy02An_dis_rept.pdf.


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Vet weighs in on herd health topic

Stevie Smith, a veterinarian well known in the Texas Panhandle and Eastern New Mexico, took time recently to shed light on some regional herd health issues. Smith said there is still much more that can be done with diagnostics and preventative medicine to keep cows healthy. To read the full article, visit http://dairywebmall.com/dbcpress/?p=3695.

New Products

Fort Dodge: Single-dose PYRAMID 10 vaccine available

Fort Dodge Animal Health announces it has inventory of its PYRAMID® 10 vaccine available to meet the needs of dairy producers and veterinarians in protecting their cattle from major bovine diseases. The company ramped up production of the vaccine after initial supplies were depleted last fall.  For more information, visit http://dairywebmall.com/dbcpress/?p=3572.

Bio-Vet introduces Biostart microbial and vitamin paste

Bio-Vet, Inc., introduces new Biostart microbial and vitamin paste.  Biostart paste contains high levels of live, beneficial microbial strains, enzymes, vitamins and nutritional ingredients. For more information, visit http://dairywebmall.com/dbcpress/?p=3568.


Production Pointers: Feeding

Feeding

July 29, 2009

 

 

Four things you may not know about EFAs

 

Research continues to demonstrate the critical function essential fatty acids (EFAs) have in improving reproductive performance. Here are four facts about EFAs and why they’re important to your herd:

• Cows do not produce EFAs naturally. EFAs, including Omega-3 and Omega-6 EFAs, cannot be biologically produced by the cow using other available nutrients. The only way EFAs can be supplied to the cow is through supplementing the diet.

• Rumen microbes transform EFAs. Traditional feedstuffs do not supply enough EFAs to meet cows’ needs because rumen microbes transform free or unprotected fats. EFAs found in feedstuffs, such as roasted soybeans and flaxseed, are altered in the rumen (biohydrogenate) and most EFAs do not reach the intestine for absorption. To be effective, Omega-3 and Omega-6 EFAs must bypass the rumen and reach the small intestine to positively influence reproductive performance.

• EFAs influence every step of reproduction function, from hormone production through maintaining embryo viability. Linolenic acid (Omega-3) assists with prostaglandin production and fosters embryonic survival, and linoleic acid (Omega-6) promotes ovulation and sperm capacitation, aids in oviduct contraction and maintains embryo implantation.

• Cows secrete EFAs every day in milk. A cow producing 100 lbs. of milk per day secretes about 0.14 lbs., or 64 grams, of Omega-6 per day during milk production. Since cows lose most of the Omega-6 found naturally in feedstuffs through milk production, additional EFA supplementation is required to meet daily maintenance and reproductive needs.

For more about EFAs and their impact on reproduction, visit use www.ahdairy.com.

Source: Dr. Elliot Block, Senior Manager of Technology, Arm & Hammer Animal Nutrition

 

 

 

Evaluate dairy ration ingredient alternatives

 

Finding feed bargains while managing a balanced dairy ration can be a challenge. SESAME, a Windows-based program created by Ohio State animal scientists, estimates the break-even prices of up to 140 types of feedstuffs based on their nutrient content — metabolizable energy (ME), rumen degradable protein (RDP) and neutral detergent fiber (NDF) — according to current market prices.

Normand St-Pierre, software developer and an OSU-Extension dairy management specialist, uses SESAME on a monthly basis to estimate break-even prices of all major commodities, and identifies feedstuffs that are significantly underpriced.

“Producers think that ruminants need corn and soybeans, and they don’t, as long as the proper nutritional requirements are met,” St-Pierre said. “Dairy cattle have a tremendous ability to use a large diversity of feed. Producers must remember, though, that it does not mean they can formulate a balanced diet using only feeds in the ‘bargain’ column.”

There are reasons that a feed might be a very good fit in a feeding program while not appearing to be a bargain, he said.

“For example, molasses is often used to reduce ingredient separation in total mixed ration,” St-Pierre said. “Molasses is also an excellent source of sugars. Some nutritionists balance rations for sugars. In those situations, molasses might not be at all overpriced.”

Dairy producers can find the latest nutritional information and feedstuffs costs in OSU Extension’s dairy newsletter at http://dairy.osu.edu, by clicking on “Buckeye Dairy News.”

The latest version of SESAME can be downloaded at http://www.sesamesoft.com. Users can try the software for free for seven days, after which the cost to register the program is $99.95. There is a version for users in the United States, Canada and Mexico, and another version for other international users. For more information, contact St-Pierre at 614-292-6507 or st-pierre.8@osu.edu.

 

 

Feeding sprouted wheat poses challenges

A challenging growing season has raised questions regarding feeding sprouted wheat to livestock and the potential mycotoxin results. Michigan State University has put together resources on the Michigan Dairy Review website. According to MSU’s Dave Beede, feeding recommendations for sprouted wheat are similar to “normal” wheat — the kernels must be cracked, but not ground. Introduce wheat into the ration gradually over 3 to 4 weeks, and use 10% or less of the total ration dry matter for lactating cows.  There is the added risk that sprouted or out-of-condition wheat may have mold/ mycotoxin issues from the field or while in storage.  Extreme caution is very important, even while trying to reduce ration costs, Beede said. To view feeding recommendations, visit  http://www.msu.edu/user/mdr/ 

 

 

 

Elsewhere on www.dairybusiness.com

 

The Manager: Feed Decision Making

 

The Manager, a special section prepared by PRO-DAIRY specialists, appears in Eastern DairyBusiness 12 times a year. In keeping with the PRO-DAIRY mission, The Manager helps strengthen the management skills of dairy producers and increase the profitability of the dairy industry. PRO-DAIRY, an educational program begun in 1988, is a joint venture of the New York State Department of Agriculture and Markets, Cornell University’s College of Agriculture and Life Sciences, and Northeast agriservice organizations. For reprints of PRO-DAIRY’s The Manager, contact Heather Howland, 272 Morrison Hall, Cornell University, Ithaca, NY 14853. Phone: (607) 255-4478 Email: hh96@cornell.edu

 

August 2009 features include:

 

Welcome to the wild world of sourcing feed 

How dairy producers tackle decisions on whether to buy or grow
commodity feeds has changed a lot in the last decade

By Tom Overton and Larry Chase

http://dairywebmall.com/dbcpress/?p=3663 

 

To contract or not to contract

There’s no crystal ball to help make foolproof decisions on contracting
feed. But there are tools that help improve decision making

By Tom Overton and Larry Chase

http://dairywebmall.com/dbcpress/?p=3665 

 

How do I price forages?

Pricing forages? That perennial question asked by dairy producers can
be answered using any of these methods

By Tom Overton and Larry Chase

http://dairywebmall.com/dbcpress/?p=3667 

 

Dairy consultant Q & A

Drawing on a wealth of experience, Corwin Holtz offers ideas on
making sound feed-buying decisions

By Eleanor Jacobs

http://dairywebmall.com/dbcpress/?p=3670l: scn@uga.edu

 

 

 


Survey reveals extent of dairy economic pain

About  200 dairy farmers, agribusiness people and politicians gathered at central New York’s  Morrisville State, in mid July, to discuss the current dairy economic crisis. The meeting was organized by David Rama, of The Cattle Exchange, with support from the New York Holstein Association, and Beth Keene, of the Morrisville Dairy Department.

As part of the meeting, participants answered a questionnaire. Questions and results are listed below:

 

1. How many years have you been a dairy producer? Average was 27.96 years

 

2. On a scale of 1 to 10, how would you rate the current dairy crisis in relation to past situations (1 being the least severe and 10 would be the most severe): 75% responded as a 10; 21% responded as a 9.

 

3. Can you produce milk and make a profit at the current price you are receiving?

99% responded no

 

4. Would you support a supply management program? 86% responded yes. 14% responded no

 

5. Do you understand the milk pricing system as it pertains to your location?

60% responded no

 

6. Do you think the co-ops are acting in all producers’ best interest?

95% responded not enough; 5% responded enough.

 

7. Less than 1% of the cheese produced in this country is traded on the CME, setting the price you receive. Do you consider this a fair pricing system? 97% responded no

 

8. Are you concerned about the safety of the U.S. food supply with the imports of dairy products and MPC’s that are entering from unknown origins? 97% responded yes

 

9. Are you current on all accounts payables.  If no, how many months behind?

 (30% responded yes, however, many indicated they had borrowed, used savings or had other income.) 26% responded 30 days past due; 17% 60 days past due; 13% 90 days past due; 14% responded 120 days or longer past due).

 

10. If you have a mortgage on your farm, have you had to refinance or negotiate interest only payments to your lending institution in the past year? 75% responded no (but many made notations they were on the verge of doing)

so).

Minnesota dairy industry growth is steady despite challenges

A new study by the Minnesota Department of Agriculture (MDA) shows Minnesota’s dairy industry achieved steady growth from 2005 to 2008, after years of decline in the early 2000s.  The annual growth rate averaged 2% from 2005 to 2008, closely following the national trend.  Minnesota is the sixth largest dairy state in the U.S., contributing 5% of the U.S. total milk production.

The study, conducted by MDA’s Agricultural Marketing Services, shows the industry generated $1.7 billion in cash receipts or 24% of the state’s total livestock marketing.  In 2008, milk prices received by Minnesota growers averaged $19.08/cwt., a second historical high.  However, milk prices saw significant declines early this year, averaging $12.60/cwt. in the first four months – the lowest level since 2002.

The study shows dairy exports also increased.  As the fifth largest dairy exporting state in the U.S., Minnesota reached a record-high of $113 million in dairy exports in 2007, a 22 percent increase from the previous year.  Since 2000, dairy exports have grown by 61%.  Dairy is one of the fastest growing export sectors in Minnesota agriculture.

Many large dairy states have seen decreases in cow numbers in the past decades; Minnesota, however, has achieved increases in cow numbers from 2005 to 2008, a four-year growth trend after long periods of decline.  In Minnesota, milk yield per cow increased 34% from 1990 to 2008, from 14,000 pounds to 19,000 pounds.

The study also shows Minnesota’s dairy industry has far-reaching economic impacts on many economic sectors across the state, including crop production for feed, dairy processing and food manufacturing, supply and services, transportation, distribution and marketing.  The total economic impact generated by Minnesota’s dairy production and processing brings $9 billion in total output and supports more than 39,000 jobs.

View the study online at www.mda.state.mn.us/news/publications/animals/MNDairyIndustry2009Update.pdf

Management: Northeast Dairy Profit Summary

Beating the Benchmarks

A tight rein on feed costs serves this dairy well – in any economic climate.

 

By Susan Harlow

 

If cost control is essential to prepare for the next upswing in milk prices, Milton Vaill of Vernon, N.Y., is ready. A producer who ranks in the top 25% most profitable dairies in Farm Credit’s Northeast Dairy Profit Summary, Vaill’s management approach helps in bad times – in preparation for the good.

Vaill Brothers Dairy keeps a handle on production costs, especially feed (see Table 1, below). In 2008, feed and crop expenses totaled $4.31/cwt., well below the $7/cwt. benchmark of the all dairies in the Northeast Dairy Profit Summary’s top 25%. Labor efficiency also shines.

At the same time, milk production in the 500-head milking herd doesn’t suffer. Cows averaged 23,150 lbs. (2X) last year.

 

 

Vaill Brothers Dairy keeps a handle on production costs, especially feed.

Vaill Brothers Dairy keeps a handle on production costs, especially feed.

Some of the management practices that help Vaill keep feed costs low:

 

• Contracting to buy commodities and flexibility in their use. Last year, the dairy averaged $3.22/cwt. in purchased feed costs, compared to $5.67/cwt. for the Dairy Business Summary benchmark.

“We will change commodities if the price gets out of hand,” Vaill said. “We’re not married to anything. If you do it right, you don’t lose production.”

For instance, when the price of soymeal shot up and Vaill didn’t have enough meal under contract, he substituted distillers grain. When cottonseed prices rose too high, he switched to roasted soy.

Heifer rations include commodities for their first 14 months; after breeding, they eat mostly forage. Even prefresh cows don’t get formulated feed – Vaill can put together his own ration from commodities and minerals. “As far as buying expensive feed, we just don’t do it,” he said. 

Vaill is computer-savvy, but still gets his information from commodity suppliers by telephone. Decisiveness is essential. 

“The biggest thing is to pull the trigger – know what you’re satisfied with and do it,” he said. “To not act on it will cost more money than to buy it a little high. With the crazy markets, if it’s a price that you can make money with it, you’d better lock it in and don’t look back, because the whole reason to lock it in is to protect yourself.”

Keeping tabs on how much you’ve paid in the past is also important, especially as prices become more volatile.

“Ten years ago, it was a game – you might save $10,” Vaill said. “Now you’ll save $100. Or $200. It’s much more serious.”

 

• Growing most of his own grain, including high-moisture corn and soy, which he sends off-farm for roasting. Economically, it makes sense. “If our yields are good, I have no problem with that, when corn is at $90, $100 a ton,” Vaill said. The dairy crops 1,150 acres – 600 in corn, 150 acres in soybeans and the remainder in hay.

 

• Grouping cows. The herd is divided into three groups: fresh cows, high-production and low-production. 

He can feed the low group for $1.25 to $1.50/cow/day less than other groups. “I just feel they can go on to a different ration at a different stage of their lactation.”

An automatic ID system, purchased in 1991, makes grouping succeed, he said. Monitoring daily milk weights, he assesses how each group is performing; if fresh cows are getting off to a good start; and the effects of changing commodities in the ration.

A DairyComp 305 computer program was one of the few new purchases Vaill made this year. Current information helps him and his employees make better decisions.

“We want a weekly report so what we can monitor if we’re making our goal or slipping behind,” he said. Reports Vaill finds most useful include the number of cows pregnant; the number of heifers pregnant; cows lost in first 60 days in milk (DIM); cows open after 150 DIM; and mortality rates. “On Monday morning, bang, the report comes out,” he said. “In the last 30 days, are we doing better or worse? Everyone on the farm needs to know if they’re doing good or bad: not a yearly, but a current average. They need to be able to measure their success.” 

That leads to the most important reason behind the dairy’s profitability, Vaill said:

 

• Employees. “The number one thing I have here is people,” Vaill said. “There are some who have been here a long time; some key people worked here as high school kids.”

The dairy employs about six full-timers. Vaill’s philosophy is to give them plenty of responsibility, encouraging team effort. It takes good management skills to do that. When he took over the dairy 30 years ago, he immediately began attending labor management classes. 

“You have to try to figure out what they need and want; they are the people who are making it happen,” Vaill said. “Any efficiencies or success has to do with people who work together well. When they can work things out themselves, that’s just magic.”

Vaill doesn’t skimp on labor. Low feed costs help him pay more for labor – nearly 15% of his milk check goes to pay employees, compared to about 12% for the benchmark. 

 

• Low debt per cow. The dairy carries a debt of less than $700/cow, one-quarter of the benchmark, the result of long-held frugality.

“You borrow money to buy cows, but you don’t borrow money for machinery without a darn good reason,” said Vaill, who has a full-time mechanic and a good shop to keep machinery lasting a long time.

Vaill also said he’s always believed strongly in paying off principal when interest rates dip. “If you can deal with the income tax, hammer that principal,” he said. 

Gradual growth has been a big key to low debt on the dairy. The 100-stall freestall barn Vaill moved into 30 years ago is still in use, although it has been expanded to about 500 stalls and upgraded with fans and mattresses. It includes maternity and close-up pens. Separate barns house calves, dry cows and bred heifers.

“If you have an old structure, you have to be willing to update it,” he said. “Every time we did that, we gained milk per cow.” 

Building a new facility might have been a better idea, however. “The first time I added on to the barn, I should have built a new one,” Vaill said. “I never had a huge debt, but I have sacrificed some efficiencies.”

Vaill and his employees milk in double-12 parlor, which he calls “one of oldest, worst parlors in central new York.” But because of his employees, they milk 100 cows an hour.

Finally, Vaill doesn’t overestimate the price of milk, and he doesn’t plan to do much different if and when the price goes back up. It’s an approach that’s served him well.

 

 

Prepare now for better milk prices

 

Will you capture everything in the next price ‘up’ cycle? 

 

By Steve Bulkley

 

It’s easy to to miss the highest milk revenues during a milk price “up” cycle, because they tend to appear early, declining sharply within just two to six months. Be prepared to make the most of the next upswing.

Are you positioned? Cash flow rules the day, especially during times of low milk prices. Will belt-tightening compromise your herd’s production and leave you unprepared to fully exploit the next opportunity? It shouldn’t, especially if you made critical business investments during the last “up” cycle. 

Thanks to careful purchasing during the historic “up” cycle of 2007-2008, many farm businesses entered the 2009 “down” cycle in pretty good shape. They have a healthy, productive herd of cattle. They have a full staff of talented people. They have a full line of equipment and facilities in excellent repair. They also used record earnings during 2007-2008 to bring debt comfortably under control. Low milk prices are still painful, but these businesses are well positioned to ride out the economic storm.

Are you preparing? If there is an advantage to a “down” cycle, it may be that it forces a reality check of production costs. Farm Credit’s annual Northeast Dairy Farm Summary identifies a widening gap between the most profitable and the least profitable dairy farms in cost of production. The average cost of production for farms in the 2008 benchmark survey was $17.88/cwt. Clearly, improved cost control is a vital part of preparing to capture maximum profit during the next “up” cycle.

What you can do to prepare. Profit is maximized when production costs are minimized and the maximum volume of milk is sold. Total input cost divided by total sales volume yields net cost of production. There are two key points to rein in net cost of production: input pricing and conversion efficiencies. Focus on that interplay to decide when and how much to use any input. 

Shopping for best price per ton, per gallon, per dose or per hour is an obvious cost control measure. But don’t stop there. Scrutinize results and efficiencies as closely as prices, and follow up to see if results are materializing as expected. Measuring results is absolutely necessary, even if it is not easy. 

Smart input decisions are fundamental to riding out tight cash flow, and critical to preparing for an eventual, but sudden, brief upswing in milk prices. At that moment, you want to be shipping the greatest possible volume of milk and components at the lowest possible net cost of production. Even a two-month lag in ramping production back up could result in a significant missed opportunity in milk receipts.

To be prepared, take an active interest now in each of the inputs being used on your farm and how they are working out. Work with sales reps and consultants to fine-tune the blend of inputs you purchase, and make every reasonable effort to monitor results. Insist on achieving promised results. Success is about price and effectiveness.

 

FYI

•  Steve Bulkley is a business consultant in Batavia, N.Y., with Farm Credit of Western New York. Phone: 800-929-1350.

 

 

Build employee equity

Now is the time to score some points with your employees.

 

By Steve Richards

 

This year’s Northeast Dairy Farm Summary looks back at 30 years of farm data. One of the most striking achievements is the advancement in labor efficiency.

In 2008, the average farm shipped more than 1 million lbs. of milk per worker, up 131% from the average farm in 1978. The most labor efficient herds in 2008 shipped more than 1.3 million lbs. per worker. And while labor efficiencies over the years have come through efficiencies of scale, new technology and higher milk production per cow, they have also come through better labor management practices. 

This year, with low milk prices, there won’t be many opportunities to make capital investments to make things more efficient. This means you’ll be expecting more from your people to get through these low milk prices. While it is fair to expect more from your people, it is also fair to expect they may need more from you.

 

Invest in your people

Even if you don’t have a lot of money lying around, there are ways to invest in your people without spending your last dime. That investment consists of employee management and leadership principles:

 

• Be frugal but don’t be cheap. Try not to cut things that will end up hurting employee morale. For instance, if you usually keep refreshments in the barn fridge for your employees, keep doing it. The cost savings achieved by cutting out small perks won’t balance the budget anyway. 

 

• Be available. During tough times, employees will want to interact with you more. This is the same with your family, as well. 

 

• Be positive. Dwelling on the negatives gets everyone down, and takes away from the feeling that their job performance has any impact on making things better. 

 

• Be confident. If you are pull together, it gives your employees confidence that your business will pull through. 

 

Some of the most well-known businesses – GE, Microsoft and FedEx – were started during “down” cycles, by people with good ideas who seized opportunities. Your people will be the source for new ideas and cost-saving measures in the future. A manager who can invest in his or her people during the difficult times will be ready to launch the business forward when things turn around.

 

FYI

•  Steve Richards is a farm business consultant with Farm Credit of Western New York. Phone: 800-929-7102. E-mail: Steven.Richards@farmcreditwny.com.


Success Strategies: What (crisis) stage are you in?

By John Ellsworth

 

In his recent book, “The Noticer,”  author Andy Andrews tells the story of his main character Jones and his response to a question that was posed to him about what his “point” really was. He replied, “Well, I’m not really to the point yet, but if I had to make one now, it’d be for you to understand that all people – all lives – are either in a crisis, coming out of a crisis, or headed for a crisis.” I know what you’re thinking. Oh, thanks, John. I’m in a crisis, so now what can I do?

 

Know where you’re at

The key here is to know which stage you are in because only then will you know which option will be the best one for you to select. Think about the current challenges of the dairy industry. Where do you fall on the spectrum of crisis? Please allow me to provide you with some perspective.

 

Perspective provided

1. “In a Crisis” – An example of this is when your accounts payable continue to grow, your lines of credit are fully loaned out, and your bank has decided that they are ready to cut their losses and, thus, are not willing to loan you any more funds. 

This really is a crisis, because you are locked up on what you can do. I recently had a client in a situation similar to this. Fortunately, we were able to brainstorm with the bank and come up with a potential solution by borrowing against some “lent collateral” from another family member. This added some debt, but allowed us to work through the immediate cash crunch and get back on track with vendors. Their new goal is to now reduce debt as quickly as possible during the next five years…

 

Into a new category

2. “Coming out of a Crisis” – I suppose that the outcome of the prior example converted my client into this new category. However, I believe a better example would be a client who, even prior to this downturn, had some cash flow issues, especially when we hit the high feed prices of 2008. My first observation when I began working with them was that their debt structure had been “put together by a committee.” 

They had plenty of debt on their short term and intermediate term assets but very little on their real estate. By tapping into the equity of their real estate and setting up a new long term real estate loan, they have been able to cash flow relatively well in 2009. Yet, even as they move forward and out of their crisis, they have changed their thinking for the better.

 

Disaster agenda time

3. “Headed for a Crisis” – The third category is my ongoing justification for the development of what I call a “Disaster Agenda.” 

As an ongoing exercise, I work with clients to develop this regularly. I ask them to not only set their top five goals for the next twelve months, but also to list the five worst items that could happen in the same time period. 

The purpose of this exercise is not to dwell on the negative aspects of your business but rather to start thinking about: 

a. What could potentially go sideways?

b. Where you might want to make improvements in your operation? 

c. What are my potential areas in which I might get blindsided by fast changes in the industry? Some examples include your bank exiting the dairy industry, your milk buyer going bankrupt, a key employee leaving or the death of a key person in your family operation. 

Key to success

The key to successfully moving through this thought process is to cover as many potential areas of exposure as possible, and then answer this question. If this event happened, what would my best response be? 

You’ll find that your thinking will be enhanced if you complete this process prior to the potential event actually occurring. Additionally, thinking this through in advance will also help prepare you for other similar events that could occur. 

For example, I had a client who was concerned about his bank possibly leaving the area of dairy financing. Thus, we thought through what we would do if that actually happened. His bank continued to finance the dairy industry for many more years. However, his going out and meeting other lenders prepared him for what did occur. His feed company was sold to a conglomerate corporation. When that happened, he simply used the same process to develop relationships with two other feed suppliers. He had already practiced this process in the banking world…

 

Be open to change

Please give some thought to where your operation is at present. As you go through this process, be open to change, both within yourself and in the way you run you business. I think you’ll be glad you did! 

 

FYI

  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.


Accounting for Profits: Wills and Trusts

Wills, trusts: Why so important?


By Ralph Lizardo


What is a will? What is a trust? Do I really need either? If so, should I set up a will, a trust or both? Do these questions sound familiar? If so, this article will give you a basic description of the purpose of each document and how they can help you and your family in the future.

Wills and trusts are the essential tools when it comes to estate planning.  An estate plan is the accumulation, conservation and distribution of wealth. You have worked hard to accumulate your wealth and you should make sure that that hard work is preserved after you die and distributed according to your intentions.

 

Most experts agree!

What is a will? A will is a legal document that dictates your wishes on how your assets will be distributed and with a guardianship, expresses who will take care of your minor children at your death. Most experts agree that everyone needs a will regardless of the value of your estate. You want to ensure that your wishes are acted upon.  

Another form of a will is a living will. A living will is a legal document that expresses your final health care wishes and appoints someone administer those wishes. Depending on which state you live in, a living will is sometimes called, Health Care Directive Declaration, Advance Directive, or Durable Power of Attorney for Health Care. A living will takes effect when you become incapacitated and you can no longer make your own medical decisions.

 

Dying intestate?

What happens when I die without a will?  The legal term for dying without a will is dying intestate. Without a valid will, your property will be distributed, by the courts, according to the laws of the state you live in.  If you have minor children, you leave it up to the courts and social services to determine who will care your minor children, and who will manage their inheritance. If you do not have an advanced directive, the doctors would have to follow your state laws and consider family members’ input in order to determine what would be the best treatment for you.

 

Appoint trustee

What is a trust? There are various types of trusts but for this article, we will look at a living trust, which is a revocable grantor trust.  A living trust is a legal document that appoints a trustee, to manage your property and gives detailed instructions on how the property will be managed and distributed. A living trust is created by you, or you and spouse jointly. A living trust may be amended or revoked at any time by the person or persons who created it.

With a living trust, your assets are put into the trust, administered for your benefit during your lifetime then transferred to your desired beneficiaries.  In a living trust, most people name themselves as the trustee in charge of managing the trust’s assets.

 

Avoid probate

The main purpose of a trust is to avoid probate.  In short, probate is the legal process in making sure that all of the decedent’s debts are paid and the remaining assets are distributed to the appropriate heirs.  In addition, having a properly executed trust will help avoid or reduce estate taxes.      

What happens when I die without a trust? Without a valid trust, your estate will be subject to probate. The management of your estate will be under the court’s supervision and their decision might not be in alignment with your wishes.

 

Differences?

What are the main differences between a will and a trust? The main difference is that a will is subject to probate while living trusts are not. Documents under probate are also public records and can be viewed by anyone.  Another difference is the cost. The cost to prepare a will is typically lower than a trust. Although the cost to prepare a trust will be higher, the avoidance of probate costs will be worth it.

 

Which one is right for me?

Which one should I set-up? Generally, both because they serve different purposes but both govern the distribution of your assets the way you intended. The applicable estate laws differ from state to state and each individual’s circumstances vary therefore inquire of your legal and tax advisors on the additional advantages of having a will and a trust.

 

FYI

  Ralph Lizardo, Senior Manager, with Moore Stephens Wurth Frazer and Torbet, LLP,  in Walnut, Calif. Contact him by e-mail at: rlizardo@mswft.com or call, 909-594-2713., ext. 178.


Dr. Lionel H. Brazil: A Legacy remembered

Looking back at this veterinarian’s lifetime invested in herd health and innovation, we see his significant contributions to the dairy cow and the dairy industry at large.

 

By Ron Goble

 

The late Dr. Lionel H. Brazil believed the health of California’s dairy herds, especially those in Central California, directly affected the health of the entire dairy industry. He devoted his life trying to improve both.

That is still as true now as it was when he was operating the Milk Technology Laboratory at the UC Davis Veterinary Medicine Teaching and Research Center in Tulare.

Many veterinary students and practitioners from around the country circulated through the laboratory and were able to appreciate firsthand his dedication and passion for milking machine performance and herd health.

The focus of his work at the lab was to ensure the health and productivity of dairies by evaluating milking equipment performance and dairy management practices with the specific purpose to minimize mastitis through improved milking management practices.

Dr. Brazil knew mastitis was extremely costly to dairy operations in terms of lost milk production and the potential for reduced economic returns for cows with a temporary or permanent yield reduction. He specifically sought to uncover management and milking equipment factors that were related to increased levels of mastitis in dairy herds.

With a background of 50-plus years in veterinary medicine and as a dairyman for 25 years, Dr. Brazil worked in milking management consulting for more than 10 years – including applied research supported by California dairymen and the California Dairy Research Foundation (CDRF).

Dr. Allan Britten was a graduate student at UCD when he first encountered Dr. Brazil, who had built his dream dairy just outside of Tulare. “I was very impressed at the time with the milking system, the calf-raising facilities, the hospital facilities, even an on-farm dairy laboratory,” Britten said. “Lionel wanted to bring his science to the dairy and run it scientifically.” 

Britten, later became a colleague of Brazil’s and talked about how his friend loved dairying and veterinary medicine from a very early time as he grew up in Tulare. Britten said Lionel shared stories about how he would ride with the local “cow doctor” even before he graduated from veterinary school and would earn “pocket money” by doing cow surgery’s for the doctor.

Britten stressed that Dr. Brazil used science to address two major challenges he had experienced in dairying. He saw excessive vacuum fluctuation in the milking machine as a major obstacle to the udder health of the herd and he saw firsthand the ravages that can be caused by Mycoplasma mastitis.

“The disease was first recognized as a major udder health threat on California dairies in the 1960s. Lionel’s cows were not spared,” recalled Britten. “He  played an active role in the early understanding of the nature of this disease and its control by working with Dr. Don Jasper and later with Dr. Bob Bushnell from UC Davis. Lionel was a coauthor on some of the early published papers in the Journal of the American Veterinary Medical Association on this new major mastitis pathogen in 1966. Since those early published reports, the disease has been recognized in every other state in the country and also reported throughout the world.”

Britten remembered how Brazil had the idea of assembling large numbers of dairy cows into one operation, which was relatively new idea in the 1960s and ‘70s. California dairymen led the way in developing the management systems that eventually proved you could have large dairies that were economically efficient and had animal health and production statistics that were as good or better than their small herd counterparts.

Lionel was in the middle of helping develop these successful management models with his own cows and with his dairy clients. It was not always a pretty picture, said Britten, as some of these early large dairies (1,000 cows) had some spectacular mastitis outbreaks.

“Brazil recognized that cow-to-cow transmission of contagious mastitis organisms via the milking machine could be a major contributor to increased mastitis risk,” said Britten. “This led to Brazil starting Western Dairy Research, Inc., and developing the Sentinel Sanitizing System, one of the first legal backflush valves…another example of Lionel developing a milking machine component specifically designed to help reduce mastitis.

“The backflush procedure was one of the epidemiologist’s answers to stopping the spread of contagious mastitis. It was obvious and logical that when contagious mastitis infected cows were milked, they would leave high numbers of pathogens on the liner surfaces to spread to other cows…It was widely suggested that sanitizing these liner surfaces between cows should greatly reduce the transmission of dangerous organisms like Streptococcus agalactiae, Staphylococcus aureus and Mycoplasma. Most ideas for sanitizing the liners were labor intensive and  most dairymen said it was not practical.

“Lionel saw this as a professional challenge to make this process easy enough to routinely be incorporated into the milking procedure,” Britten recalled. “The Sentinel Sanitizing Valve was a legal way to temporarily separate the milking cluster from the machine while performing the sanitizing function. The one he produced and sold was a manually operated valve but it did greatly ease the process of performing this task.”

While the device saw only limited use by dairymen, Lionel’s backflush valve served as a stimulus to many of the major milking equipment manufacturers and within five years of the first automated system (in 1979), most companies marketing in the US had automatic backflush systems to offer dairymen.

Several other ideas Brazil championed to help with udder health included the development of the Sentinel Dairy Meter, a vacuum recorder that came out in 1980. The first one was an analog electronic vacuum analyzer designed to measure vacuum levels and pulsation rate and ratios. It was the precursor to the Digimet, which is a digital vacuum recorder that came out 10 years later.

“The size and sophisticated features in the device were a product of this goal to make this kind of testing easy and practical enough to do quality vacuum system evaluation on a regular basis,” Britten explained. 

National Mastitis Council (NMC), and specifically the members of the milking machine committee, saw a need to help standardize the way milking machine regulator performance was evaluated. Lionel was actively involved in the development and evaluation of test methods for system vacuum stability, particularly in the large Western dairy milking parlors. He was a coauthor on papers published in the NMC proceedings in 1995 that helped shape the guidelines. After development of variable speed drive regulators, Britten worked with Brazil on alternate testing methods that began to help quantify other aspects of regulator performance. Those ideas were presented at the Second International Symposium on Mastitis and Milk Quality in 2001.

“When Dr. Brazil was managing his dairy, he was profoundly affected by the animal suffering and economic loss associated with mastitis. There were a lot of published reports in the literature at that time about the relationship between vacuum fluctuation and infection,” said Britten.

In a newsletter report  published by CDRF, Dr. Brazil was quoted as saying he believed it was “the random or unplanned events” that contribute to increased mastitis levels. In addition, he found increased mastitis and somatic cell levels were caused by abrupt pressure changes at teat end, which propel infecting bacteria into the mammary gland during milking. 

“He set upon a course of developing the ‘ideal’ vacuum regulator. He enlisted the aid of a professional engineer to help with the design of this new regulator. This was the beginning of his major business enterprise – Western Dairy Research, Inc.

While his goal in designing the Sentinel Regulator was to “eliminate vacuum fluctuation,” he didn’t quite get that job done, Britten stated. However, the device did more than any other available to California dairymen at that time to minimize system vacuum fluctuation. Some colleagues say the Sentinel Vacuum Controller was soon acknowledged by many dairymen, veterinarians, and equipment dealers as the “gold standard” of vacuum regulation performance. 

Eventually many other manufacturers included some of the same engineering features to improve the performance of their products. 

 While he focused on mastitis throughout his storied career, Dr. Brazil and his team did research on many areas of dairy industry operations.

WDR was a well planned dairy facility of his own where he studied and monitored performance of dairy animals, feeds, feed additives, drugs, dairy equipment and management protocols.

His goal was always to improve the health, productivity and longevity of dairy animals and assist the industry in meeting the ever increasing demands and environmental limitations. 

Concerning one of his studies, Dr. Brazil wrote, “As dairies become larger, consistent monitoring of all milking equipment performance levels, product usage and milker performance…will be mandatory for high levels of success, both from reduced mastitis levels and increased productivity.”

Dr. Lionel H. Brazil was a visionary and an innovator, with a deep love for dairy animals and the dairy community. Contributions of his lifetime endeavors as expressed by friends and colleagues speaks volumes about the character and contributions of the man.

 

(See article and photos in August 2009 issue of Western DairyBusiness.)

Vet weighs in on herd health topic

CLOVIS, NM –  Stevie Smith, a veterinarian well known in the Texas Panhandle and Eastern New Mexico, took time recently to shed light on some regional herd health issues.

Smith, originally from New Hampshire, grew up on her parent’s dairy raising and showing cattle. She received both her undergraduate degree and DVM at Cornell University. She arrived in the Southwest after investigating dairy industry opportunities in Idaho and elsewhere.

Smith currently runs her own veterinary practice, which serves customers in Clovis, Portales areas, and in West Texas.

Common trends

As she services dairies in the area she recognizes some common trends. One common problem she finds is hemorrhagic bowel syndrome, which she says is due to the climate in the Southwest.

“I don’t think we find things here that are not prevalent in the rest of the United States Once you are dairying with a large herd population, there are certain diseases that cows get that they can get anywhere,” said Smith.

Feed management

Other possibilities that can contribute to hemorrhagic bowel are feed management practices, the veterinarian said.

“Some feed management practices might not be in place that should be,” commented Smith, “There are many feed additives, vaccines and other things out there. But really all I think it comes down to is common sense. If the temperature is high, make sure you are feeding twice a day and maintain your silage piles well.

“If you pull your silage, don’t pull it for the next three days,” Smith declared, “I think as with hemorrhagic bowel, most of the diseases are manageable but will always be there on some level or another.”

Most of these diseases can be contained through good management practices.

Common trends Stevie Smith finds in the Southwest there are holes in dairy herd health programs because of how quickly the area has developed.

“Being proactive with diagnostics is a first step, but there is still a lot of growth that needs to take place,” suggested Smith. “No one really wants to talk about the economic impact of Johne’s disease because not many dairymen test for it. But in the future, such testing programs might be extremely important.”

Still much more to be done

Smith said there is still much more that can be done with diagnostics and preventative medicine to keep cows healthy.

Southwest dairies also need to be concerned about heat stress. Even though the region tends to have weather that is somewhat typical, we need to be concerned about the days that are extremely hot and uncomfortable. “After all, if we feel uncomfortable and are looking for relief from the heat, shouldn’t we except the cattle to feel the same way?” Smith questions. “People underestimate the importance of dealing with heat stress here because we usually have a breeze. We have to remember a cow’s comfort zone is a lot lower than ours. It doesn’t take that much for dairy cows to be heat stressed.

“There are very simple and cheap ways that we can help keep cows cool,” she said. “It will benefit your cows to use something like exit lane soakers.”

Although water usage is a concern in the region, having some of these things cow cooling tools at work can certainly impact cows to prevent heat stress.

“Another thing to think about is how long your cows are locked up in the stanchions. Dairymen should ask themselves if their cows really need to be locked up that long,” exclaimed Smith. “It is very important to think about these things as temperatures rise.”

Due to the economics of the industry many people are looking to cut out some items that could be important to keep. Dr. Smith finds that many producers are looking to revamp their vaccine protocols and that may not be a wise decision.

“I think it’s always a good idea every year to go through and look at your vaccine protocols just because as diseases happen we tend to get vaccine heavy,” said Smith.  She suggests that if you, had an outbreak of a particular disease and you decided to add an additional vaccine to be preventative that may actually be something to cut out of your program.

“Many people have tried to trim down their vaccine protocols, and  I believe if you do that every year, your vaccine protocols will be where they should be,”  advised Smith. “I’m not sure that further cutbacks may be the answer that dairyman need to look at.

“We can always look at what we need to cut out but, we need to be sure that major cuts – whether in vaccines or feed – are  not putting our cows in harms way. Really it’s back-to-basics now. It will be interesting to see what producers can learn from this time and then implement the basics when the prices come back,” said Smith. “If all these reductions and adjustments work now, then the same program should also work when we have higher milk prices, which will make your margins even bigger.”

FYI

To contact Stevie Smith, DVM, at steviesmith831@hotmail.com or call 575-309-8578.


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