Archive for November, 2009

Mycotoxin Resource List

Due to scattered but widespread reports of mycotoxins in several crops commonly used as dairy feedstuffs, DairyBusiness Communications has compiled a Mycotoxin Resource List for dairy farmers. Check back for updates.

U.S. Food and Drug Administration

http://www.fda.gov/Food/FoodSafety/FoodborneIllness/FoodborneIllnessFoodbornePathogensNaturalToxins/BadBugBook/ucm071020.htm

“Foodborne Pathogenic Microorganisms and Natural Toxins Handbook.”

Center for Veterinary Medicine

http://www.fda.gov/AnimalVeterinary/Products/AnimalFoodFeeds/Contaminants/ucm050974.htm

Mycotoxins in Feeds: Center for Veterinary Medicine’s Perspective

Michael H. Henry, Ph.D.

Division of Animal Feeds

Center for Veterinary Medicine

Cornell University

http://www.ansci.cornell.edu/plants/toxicagents/aflatoxin/aflatoxin.html

“AFLATOXINS : Occurrence and Health Risks.” Cornell University.

Michigan Dairy Review

www.msu.edu/~mdr

Articles

Mycotoxin Analysis Labs

Pictures of Corn Molds

Mold_High Moisture Corn 1992

Agronomics of Molds and Toxins in HM Corn & Silage

MF2061 Mycotoxins in Feed Grains & Ingredients

Use of Feed Contaminated with Fungal (Mold) Toxins (Mycotoxins)

Mycotoxins in Dairy Cattle: Occurence, Toxicity, Prevention & Treatment

Mycotoxin Contamination in Silages

Screening for Mycotoxins in Silage

Effects of Mycotoxins on Ruminal Bacteria and Animal Performance

Laboratories for mycotoxin testing in dairy feeds

www.msu.edu/~mdr/Myco_Analysis_Labs.pdf

Minnesota

www.extension.umn.edu/LateHarvest

Articles

Mold in dairy feed: Ten things to think about

Corn quality challenges effects on dairy cattle, fall harvest 2009

Mold and mycotoxin issues in dairy cattle: Effects, prevention and treatment — eXtension.org

Dairy cattle feeding issues with high-moisture corn, snaplage and dry shelled corn — University of Wisconsin

Handling moldy feed

Fungal growth on corn (“moldy corn”) in Minnesota in fall 2009

Mold in corn update from the SWROC

Steps to take when mold is present in corn — Pioneer

Molds and mycotoxins show up in corn — University of Illinois at Urbana-Champaign

2009 corn quality issues: Field molds — Iowa State University Extension

Open crop insurance claim if corn mold is suspected

Illinois

http://www.livestocktrail.uiuc.edu/dairynet

A webinar is scheduled for Thursday, Dec. 3, 2009, Noon to 1 p.m. Central Standard Time.

Go to https://www1.gotomeeting.com/register/842673729 to register for this session.

Iowa

http://www.extension.iastate.edu/dairyteam

http://vetmed.iastate.edu/diagnostic-lab/diagnostic-services/diagnostic-sections/chemistry-/-toxicology/mycotoxins

Nebraska

http://nebraskadairy.unl.edu/index.html

Articles

Understanding Mycotoxins

Use of Feed Contaminated with Mycotoxins

Mycotoxin: Effect, Prevention, Treatment

Sampling for Mycotoxins

Mycotoxin Testing Laboratories

Florida

http://edis.ifas.ufl.edu/DS152

Articles

The Problems of Mycotoxins in Dairy Cattle Rations

Selected Laboratories for Mycotoxins


Kentucky

http://www.uky.edu/Ag/AnimalSciences/dairy/dairypub.html

Louisiana

http://www.lsuagcenter.com/en/crops_livestock/livestock/dairy/

Missouri

http://www.agebb.missouri.edu/dairy/

George Rottinghaus, DVM, University of Missouri, E-mail: RottinghausG@missouri.edu

North Carolina

http://www.cals.ncsu.edu/an_sci/extension/dairy/nutrition.htm

Ohio

http://dairy.osu.edu/resource/feed/feedmgt.html

Pennsylvania

http://www.das.psu.edu/research-extension/dairy/nutrition

Articles

Mycotoxins in Forages: Potential Sources of Contamination to Lactating Dairy Cattle

Mycotoxins: Managing a Unique Obstacle to Successful Dairy Production

Virginia

http://www.dasc.vt.edu/links.html

Wisconsin

http://www.uwex.edu/ces/dairynutrition/

http://www.uwex.edu/ces/crops/uwforage/Mycotoxins.htm

Articles

Feed molds and mycotoxins

2009-2010 Dairy Cattle Feeding Issues with High-Moisture Corn, Snaplage and Dry Shelled Corn

Agronomic Considerations for Molds and Mycotoxins in Corn Silage

EXTENSION

http://www.extension.org/dairy cattle

Articles

Mold and Mycotoxin Issues in Dairy Cattle: Effects, Prevention and Treatment

Mycotoxin Effects

Safe Levels of Mycotoxins

Toxicity of Individual Mycotoxins

Forage Mycotoxins

Mycotoxin Testing

Mycotoxin Binders

Binder evaluations and concerns

NOVUS

http://www.dairybalance.com/WhattheExpertsSay/MycotoxinsinSilage.aspx

Mycotoxins in Silage Cause Multiple Effects in Dairy Cattle Including Oxidative Stress

Anti Caking Agents

Stephanie Gable, Ruminant Marketing Manager, Novus International, E-mail: Stephanie.Gable@novusint.com, Phone:  314-576-8886

Alltech

http://www.knowmycotoxins.com/

Articles available in multiple languages

‘Practical Tips on The Prevention of Mycotoxicoses’

‘Understanding Mycotoxins’

‘Mycotoxins: Still many lessons to learn’

‘Mycotoxins and Distillers Grains’

‘Mycotoxins and Immunity’

‘Mycotoxins, the digestive tract and immunity in ruminants’

‘Mold and Mycotoxin Testing’


Technology/Innovation: Lagoon management with cutting-edge technology

By Ron Goble

LOS BANOS – A pilot project to clean up a dairy lagoon has been underway since June at a dairy just east of here. Verdure Technologies, Inc., (VTI) headquartered in Pocatello, Idaho has developed what they refer to as Micro-Gas Attendant (MGA).

What that means in plain English is that the system will remediate the waste and capture the greenhouse gases (GHG), which is eventually turned into pipeline quality methane gas for PG&E.

In the developmental stages for the past three years, Mark Terry, chief technical officer, and Douglas Brown, chief executive officer, of VTI are putting their cutting edge manure management system through a real life test on a normal sized California dairy.

The MGA produces microorganisms that consume volatile organic compounds and solid waste, explained Terry, former chief technology officer for Global Food Technologies. VTI’s proprietary technology uses local (onsite) nutrient to grow indigenous aerobic, facultative and anaerobic microorganisms and algae.

“VTI’s manure treatment system brings together advances in biology, chemistry, and the physical sciences to provide a practical solution for a host of environmental, and production efficiency challenges that have long defied the dairy industry,” said Terry.

“The MGA is a solar powered, geothermal regulated, remotely monitored automated system that was developed specifically to eradicate the high levels of waste, environmental pathogens, and volatile organic compounds produced by CAFOs,” explained Terry.

The pilot project is using a smaller runoff lagoon so they know the exact dimensions and determine the capacity to handle waste from a certain number of cows. While the dairy milks about 1,600 cows, this project will also allow them to determine how many incubators are need to handle a 4,000-cow dairy.

Extensive testing

“We bypassed the solids separator and filled the lagoon up with waste from the flush lanes. We turned our MGA system on and over a 90-day period had JM Lord, an independent  industrial laboratory in Fresno, do extensive testing,” said Brown. “We put a pump in the separator pit and installed a large irrigation pipe to disperse waste evenly throughout the lagoon and started replicating how many cows we could handle with the small system we built.”

Terry explained, VTI has a proprietary suite of hundreds of microorganisms that provides a continuous supply of what the lagoon needs at every depth. They pull nutrient into the incubators from the lagoon at every two feet in depth and the chemistry that goes into the incubator is different at every level and changes as the remediation process happens. The nutrient at the bottom of the incubator is from the bottom of the lagoon. Nutrient at the top of the incubator is from the top of the lagoon and every two feet in between.

Seven different levels are covered in the 14-foot deep lagoon. They replicate depth of the lagoon in two, 1,500-gallon incubators, so the same pressure is on the microorganisms from the time they start growing until they are released into the lagoon at the same level. That keeps the mortality rate for the organisms very low, said Terry.

“If there is a nutrient available to support a microorganism, it will start growing and multiply,” Terry declared. “Some thrive on phosphates, some on nitrates and there are millions upon millions of microorganisms being grown and released into the lagoon on a continuous basis.”

The top aerobic layer requires oxygen for the microorganisms to live. The middle of the lagoon is facultative, which means microorganisms can live with or without oxygen. The bottom is anaerobic and those microorganisms would die in the presence of oxygen. So they grow three types of microorganisms for the lagoon.

The project also includes an algae component in order to capture the greenhouse gases (GHG). They grow two types:

“We capture the biomass at the bottom of the lagoon and whatever trace gases are generated from that – methane, carbon dioxide, hydrogen sulfide – is then pumped over into two different types of algae growth colonies – algae that requires UV light and algae that doesn’t require UV light. Algae lives on the gas and will determine which algae is needed.

“We grow chemotropic algae and inject it into the bottom layer of the lagoon and the phototropic algae into the top layer to reduce the greenhouse gases,” said Brown. “The algae will actually envelop the gas and die and then microorganisms convert that to a real rich biomass at the bottom. So we will pull that biomass out and gas it off and create clean natural gas.”

VTI is working with PG&E and once the revenues from the natural gas has covered the cost of the MGA, they will begin sharing the revenues with the dairy producer. “We are addressing the renewable energy and the environmental sides of the dairy waste management issue and are actively looking for other dairies interested in participating in future projects,” Brown added.

Independent testing

JM Lord, Inc. has determined through its extensive testing of the lagoon that the system has performed efficiently enough to:

• Reduce total salts 53%

• Reduced ammonium levels 26%

• Reduced sulfates 97%

• Reduced phosphates 95%

• Reduced nitrates 96%

• Reduced suspended solids 89%

• Reduced BOD 87% and significantly reduced odor.

With the test results Terry and Brown believe that dairymen could add additional cows on that dairy without requiring additional acreage to support it.

Terry said that the dairy with their system will be flushing with lagoon water full of microorganisms so that those organisms will also begin cleaning the organic matter in lanes as well.

Terry has been working with researchers at Idaho State University on some of the science required in the system. All their patents are pending for what they call the Biogas Energy Conversion System. Brown said the patents will protect them from competition trying to duplicate the system they engineered, which enables them to grow microorganisms on site with indigenous nutrients.

Computerized system

Transfer pumps inject microorganisms into the incubators and the entire system is computerized and can be operated remotely. The system will signal changes in volume or drop in microorganism activity and can be adjusted and/or rebooted by computer from any remote location.

The system is a plus for the environment because it gets rid of numerous toxic chemicals. This lagoon management system can work without a solids separator and all the equipment that that entails, said Brown. And the sale of gas will be a boost to the bottom line for the dairy producers.

Terry said they did early bench testing in their lab and on a small 200-cow dairy in Idaho before setting up the full blown pilot project on the Calirornia dairy, which represents larger dairy operations in the West.

“I probably learned more about the realities on a large commercial dairy during this pilot project than anything else,” Terry said. “I had no idea how many plastic gloves, syringe caps, Styrofoam cups, bottles, twine and other garbage can come in with the manure. It affected how we designed everything. We worked with a company to develop a new pump, which is called the disintegrator pump. It reduces everything to an 1/8-inch so the lagoon system can handle it.

“We told the dairyman not to worry about trying to find a way to keep those kinds of foreign objects out of the manure. We would learn how best to deal with it and make it work. That’s the real world,” Terry said.

FYI

To contact Mark Terry, Verdure Technologies, Inc., e-mail mterry@verduretech.com or call 208-251-2506.

To contact Douglas Brown, e-mail dbrown@verduretech.com or call 678-779-5757.

Southwest: Technology advancements on 
feed management software

Although, times are not the best in the dairy industry, companies continue to invest in emerging technology that develop and advance the industry.

EZfeed is one those programs that is growing and changing with an evolving industry, said Wade Fox, a former dairyman who now is  DHI-Provo product manager. With the recent upgrade of one of the industry’s most widely used feed management programs – EZfeed 9.1.61 – producers will have new tools to improve their feed program management.

One of the most important software improvements includes milk weight entry across a date range along with butterfat percent, protein percent, solids nonfat percent, other solids percent, SCC and MUN, values, plus total value received for your milk on the same screen.

Fox says, this enables the producer to enter all the information from his or her milk check. By entering this information the program can provide feed efficiency and income over feed cost information on either a fat corrected milk or energy corrected milk basis.

These values can also be imported from processors, several years at a time in just a few minutes to provide immediate access to historical milk information. New graphs will be available in the next release that allows users to monitor seasonal trends and apply control charts to the data.

One of the biggest updates has been the gross weight change detail and the ability to graph this out. With the gross change detail graph producers are quickly able to graph any load that was fed, and it will show weight changes that happen during loading and unloading as well as driving habits of feeders, Fox explained.

Also, if ingredients are loaded during the transition from one ingredient to the next or earlier than expected, if weight is simulated by pressing the loader bucket against the mixer this will be flagged with a red marker. Mixing pauses and unloading information is also monitored through the graphs.

The gross change detail graph has been an asset on operations in uncovering feeders’ bad habits. On one dairy, the manager found that his inventory was off between two ingredients that were feed back to back. With the updated program, the producer was able to graph out the loads, which showed the feeder was overfeeding one ingredient by adding it to the next ingredient and underfeeding the second ingredient. This resulted in their inventory being short on one ingredient and long on the other. Producers or nutritionists will find the graph capabilities a valuable asset. Tolerances also can be set to automatically pick out these errors, Fox said.

Programmers added five new columns to the quick summary as the program opens. Items added include refusal percent, butter fat percent, protein percent, SCC and MUN readings. These are key values to monitoring the performance of feed, rations and production. Other important values in today’s economy that are displayed on the quick summary are IOFC (Income over Feed Cost), Cost per CWT, and FE (Feed Efficiency) values on an ECM (Energy Corrected Milk) basis.

According to Fox, producers will also notice the enhanced tool tips within the screens when the operator moves the cursor over anything, they are able to see what specifics are in that screen. Programmers also made changes in the ingredient setup screen; nutritionists can now do projections based on current date and time instead of calculations based on the end of day and previous day.

Enhanced security within the program now allows operators to set up passwords for each individual user. No unauthorized person can access the program without user name and password.

The new system also includes inventory loss and gain data values, which can be used to effectively monitor inventory shrink, Fox said. That is inventory that has been lost or gained not mixed, sold or transferred. The program subtracts the ending inventory from the beginning inventory, then calculates the deliveries and transfers to a particular ingredient. Then subtracting the inventory mixed, sold and transfers to other ingredients.

Success Strategies: Building foundation for success

By John Ellsworth

“Finally, you create a list of the steps you would take if you were faced with a similar situation again. In essence, what steps could you take to lead you to a more successful, satisfying outcome?”

In my November article, I talked about establishing a solid foundation by developing a positive attitude. We have all been tested by industry events of 2009. However, as I stated previously, these are the times when people are looking for positive leadership, whether in your business, your community or your family. Please indulge me and take a moment to review my “Top 10” steps that are listed again in the sidebar below.

Top 10 Steps

1.) Setting Annual Goals – Management Guru Peter Drucker who said, “The best way to predict the future is to create it.”

2.) Development of a Disaster Agenda – What are the three worst items that could occur in 2010 and what would your response be?

3.) Regular Management Team Meetings – What are the crucial areas for your focused attention?

4.) Regular Finance Team Meetings – What items, such as capital expenditures, budgets, and financing needs, do we need to focus on in 2010?

5.) Cash Flow Comparisons – These comparisons are the quickest method to catch costs that are getting out of line vs. your plan.

6.) CPA Prepared Financial Statements – These are an excellent tool for the financial management of your dairy operation and help your lender to really understand your business.

7.) Bank Meetings 2X per year – In order for your banker to be involved as part of your overall Team, he or she needs to understand what your business’ strengths are and what items are areas for future improvement.

8.) Milk Marketing Plan – Understanding your break-even price level and knowing how to position your business to achieve that price is essential to your financial future.

9.) Nutritionists –This is beneficial from a nutrition perspective and can also keep you up to date on what feeds are doing in terms of price and availability.

10.) Quarterly Inventories – These are essential for your accountant, your banker and your overall feed management.

New Year Plans

As we make plans for the new year, I believe these “Top 10” steps will take you a long way in the advancement of your business. However, one challenge that I’ve noticed some clients of mine have been having is what I refer to as “Future Concern.”

To be specific, I find them worrying about the possibility that a year like 2009 could happen again. The fact of the matter is that it could, indeed, happen again. However, rather than spending a lot of time worrying about that possibility, perhaps we should shift our focus over to how we could handle it differently going forward.

‘Experience Transformer’

Dan Sullivan, president and co-founder of The Strategic Coach organization, has developed a process he calls “The Experience Transformer.”

In this process, which I have used successfully with my clients and in my own business, you start by writing out the details of what actually has occurred. In other words, you describe what happened. After this, you shift to what outcome would have been better, as well as what you can learn from this experience.

Next, you tally up what items worked for you and what did not. If you could relive this experience, knowing what you know now, what would you plan to do differently?

Seeking better outcome

Finally, you create a list of the steps you would take if you were faced with a similar situation again. In essence, what steps could you take to lead you to a more successful, satisfying outcome? After you develop this list, try to make it a regular part of your ongoing management process.

As a result, you will likely find that you stay on track and hit your business objectives more often.

In particular, this becomes more likely just because you have developed an improved process, centered on your desired outcome. Give it a try. 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: Be honest

“As the industry finds itself in a very distressed financial condition, the one piece of advice I try to give each client is to be honest. Be honest with yourself, your family, your partners, vendors and banker…and acknowledge your current situation…”


By Bob Matlick

“Hindsight vision” is always 20-20, that is the way history has always been. After grappling with low milk prices and high input costs for more than a year, with what can we look back at and educate ourselves?

Risk vs. reward

When dairymen expanded, purchased more farm ground, built a new parlor or bought the neighbors dairy, did they understand the risk in expending the capital and management resources? As I look back into mid 2007 and early 2008 I can see many purchases and/or expansions that were made with little consideration for the risk involved. After all milk prices within the high teens that bounced over $20 for brief periods of time made for great projections.

‘Blinders on tight’

The export markets were booming and we strapped our blinders on tight. Milk prices had entered into a new dimension and there was no looking back. Cash flow projections (if they were even completed) laid out milk prices in the $18-$22 per cwt. range with little regard for a pull back into the historical range of $12 per cwt. and no regard for historical lows in the $10 per cwt. range. We all, dairy farmers, bankers, business consultants, feed vendors, etc., got caught drinking the Kool-Aid.

Then the world economy tanked, exports dried up, feed prices skyrocketed coupled with the huge spikes in energy and suddenly the monthly cash flow deficits were huge on dairy farms. The “Perfect Storm.” Equity was not just eroded, but eaten away in huge chunks to the extent some operations became unbankable. Had we considered the risk versus the reward?

Lessons learned

What did we learn with our 20-20 vision?

While milk prices were at all time highs and poised to go higher we neglected to look at any downside risk. Very few cash flow projections looked at scenarios with milk price at $12 per cwt. and even fewer considered feed prices at $6.50 per milking cow per day. Bankers became very competitive, giving little consideration to equity and leverage, while primarily looking at cash flow scenarios projected with all time high milk prices and low feed prices.

Dairy producers in most parts refused to look at margin management and ignored the milk futures market thinking $20 per cwt. is great, but $25 per cwt. will be better.

Driving prices

It is my belief the industry did not fully understand the tight supply-demand ratio that drives milk prices and did not understand the emerging global markets and the effect of the overall global economy. Perhaps few did have a full understanding and tried to communicate their warning, but most refused to believe. In hindsight, we just accepted the current thought process and did not recognize or protect downside risk which was huge and unfortunately has occurred.

Had the industry stepped back and recognized the potential downside risk, we may have been more cautious with expansion plans, the purchasing of additional assets (which may or may not had any significant return on investment) or paid down debt to improve equity positions. After all the potential to go to $12 per cwt. for an extended period of time was much greater than achieving $27 per cwt. History told us milk sold at $12 per cwt. at the farm level while we had no lengthy history of $22 per cwt. Hopefully going forward we will examine both the upside and downside risk and reward while managing that risk.

What now?

As the industry finds itself in a very distressed financial condition the one piece of advice I try to give each client is to be honest. Be honest with yourself, your family, your partners, vendors and banker.  Be honest with yourself and acknowledge your current situation, consult with professional advisors (attorneys, accountants and business consultants) if needed. Let your family know where the business stands while also acknowledging your fears with them. Communicate frequently and honestly with your vendors, and bankers, let them know you have identified the issue and how you intend to solve the problem(s). For example, prepare a realistic cash flow providing for repayment that will be updated and communicated frequently, partial or full liquidation plans or any major management changes that will assist the financial problem.

The bottom line is we need to learn from our mistakes, acknowledge that the dairy business is fraught with risk and continue to evaluate measure and manage each individuals risk and reward.

FYI

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.


Opinions & Sacred Cows: Looking to recovery

“…the dairy market has reached ‘a clear turning point,’ with economic recovery underway, demand improving and wholesalers seeking to refill pipelines…we pray the apparent recovery trend continues well into 2011, for each of us!”

by Ron Goble

Everyone in the dairy industry is looking to recovery. What a year. As we approach the end of 2009 and the beginning of 2010, we are looking for better economic times in all aspects of the dairy industry.

We don’t have to review the low points of this past year. You’ve all lived it. We’ve been bombarded with the negative news all year long. It time to think “RECOVERY.”

I’m thinking recovery too. Aug.27, 2009 I had a heart attack. Oct. 2 I had triple-bypass heart surgery to fix the problem. Yes, I’m living in recovery mode, one day at a time. However, I’m back at work and didn’t miss a deadline, thanks to some help from friends and colleagues. The future looks bright once again and I’m looking ahead with new perspective and appreciation for life.

If only the dairy producers’ financial woes could be resolved by a good anesthesiologist, a skilled surgeon and dedicated support team. A few weeks of recovery and couple months of rehab and their troubles would be behind them. Dairying would be fun again and a huge burden would have been lifted off their backs.

Sorry to say, the dairy industry’s malady is a predicament much more difficult to cure. As 2010 draws near, dairy markets continue to show signs of improvement, especially as cow numbers and milk production are dropping slowly. However, prices still have a ways to go before reaching breakeven on the dairy farm.

Milk production is expected to be approximately 188.4 billion pounds this year and expected to drop below 187 billion pounds during 2010. While milk prices are expected to hit in the neighborhood of $15/cwt sometime next year, it still doesn’t quite meet breakeven for the majority of dairymen, and won’t even begin to allow them to start building equity lost through 2009. Some long-time dairy producers say they’ve lost equity that it took them a lifetime to build.

Dairy is not alone in its economic downturn and struggle to make a profit, however. As reported in “Feedstuffs” cattle feeders had experienced their greatest losses in history, pork producers had experienced their second greatest losses in history and chicken and turkey producers had experienced some of their greatest losses in history.

With all that historic bad news behind us, and as we focus on “recovery,” I’m still thinking that producers and their cooperatives can still put their heads together and make adjustments that will benefit both parties. Agriculture has long struggled with a lack of ability to set their own prices for the commodities they grow or produce. The law of supply and demand is a tough master, but a generous one when in proper balance.

Heavy culling by individual dairymen and the impact of the last four CWT herd retirement rounds are bringing the industry closer to a real recovery. The last CWT round – significantly smaller that three previous rounds – was expected to cull 26,412 cows, which will account for 517 million lbs. of milk. CWT says the last four rounds removes 5 billion lbs.

According to Rabobank International, the dairy market has reached “a clear turning point,” with economic recovery underway, demand improving and wholesalers seeking to refill pipelines. As we end 2009, and begin 2010, we pray the recovery trend continues well into 2011, for each of us! Have a Blessed Christmas and Prosperous New Year!

FYI

Have an opinion or response? E-mail Ron Goble, Associate publisher/editor, Western DairyBusiness at: rgoble@dairybusiness.com

Chr. Hansen Animal Health & Nutrition launches new website

Chr. Hansen Animal Health & Nutrition has launched a new website at www.chr-hansen.com/animal-health. The new easy-to-navigate website delivers  information on microbial science as a whole and Chr. Hansen direct-fed microbial and forage inoculant products. The research and product information is categorized by species or customer need. News, event calendars, and staff contacts allow visitors to easily track industry happenings, read the latest research reports from Chr. Hansen, and make contact with personnel who can answer questions on products, management practices or research developments.  For more information contact Bill Braman, Ph D., VP Sales and Marketing, Animal Health & Nutrition by calling 1-800-558-0802 or emailing uswbr@chr-hansen.com. To learn more about Chr. Hansen products please visit our webpage at www.chr-hansen.com/animal-health.

A PARADOX: Technology use is essential to improve productivity and reduce resource use

Yet despite the benefits, technology in animal agriculture is often villified.

By Jude Capper, Ph.D.

In 1611, European dairy cattle were imported into Jamestown, Va., and the fledgling U.S. dairy industry was formed. Since those first cattle arrived, the industry has made huge productivity gains.

The earliest recorded U.S. milk production data relates to a Jersey cow (Flora 13) that produced 511 lbs. of milk over 350 days in 1854. By contrast, USDA data shows average milk production per cow was 20,396 lbs./cow in 2008.

Advances in technology allow the dairy industry to produce more milk using fewer cows, and thus fewer resources, than in the past. Compared to dairying in the 1940’s, we use 21% of the animals, 23% of the feed, 35% of the water and only 10% of the land to produce a gallon of milk.

Nonetheless, a lengthy time interval may occur between discovery of a new technology and widespread adoption. For example, A.I. use improves productivity by increasing the rate of genetic improvement. However, a 40-year gap occurred between its first use in dairy cattle (1936) and it being used (to some extent) in 90% of herds (1977). To date, the only technology that approached 100% adoption within a relatively short time was the bulk milk tank.

High-res technology graphTrends compared

The accompanying graph shows trends in milk production per cow from 1960 to 2007 for the United States, Canada, an aggregate of the top six milk producing countries in Europe (Netherlands, United Kingdom, Germany, France, Italy and Poland) and New Zealand. Although milk yields were somewhat similar back in 1960, the lines have diverged widely over time. The U.S. has shown the fastest rate of improvement; Canada and Europe are intermediate; and New Zealand production has remained fairly static.

Improvements in productivity for the U.S., Canada and Europe were made possible by advances in genetics, nutrition, management and animal health. However, differences in the rate of improvement may be partially explained by the attitude towards – and the adoption of – technology within the various regions. The U.S. generally being pro-technology, whereas Europe in particular takes a more hostile position.

Environmental impact

Lower productivity increases the environmental impact of dairy production,  as a greater number of animals are required to produce the same amount of milk. For every one animal within the 2007 U.S. dairy population, Canada required 1.1 animals, Europe required 1.4 animals and New Zealand required 2.4 animals to maintain the same level of production. This rise in animal numbers in-creases the amount of feed needed to maintain the population, thus increasing cropland, water, fertilizer and fossil fuel use.

This issue is not confined to regions that have highly-developed dairy industries. In 2008, the Chinese government recommended  the dairy product intake of each citizen should increase from 3.5 oz/day to 10.6 oz/day. At current levels of milk production, this requires an additional 65 million dairy animals in China and a huge increase in resource (feed, cropland, water, etc.) use. If productivity is improved to current U.S. levels, the additional number of animals required would be reduced by two-thirds, to 23 million head.

A paradox

It is paradoxical that in every other industry, technology use is embraced as the path to future improvement, but in animal agriculture, use of technologies that enhance productivity are being actively campaigned against by activists. Prohibiting technology use reduces productivity and increases both resource use and environmental impact. As the population increases and resources continue to dwindle, the role of technology in improving productivity and helping to supply consumers with safe, affordable, nutritious dairy products should be celebrated, not vilified.

FYI

Jude Capper, Ph.D. is an assistant professor of dairy sciences at Washington State University. Her current research includes investigating the environmental impact of dairy products produced through differing on-farm management practices. Contact her via phone: 509-335-6192; or e-mail: capper@wsu.edu.


Robot technology: Consistent, efficient

By Ron Goble


HILMAR, Calif – The search for consistency and efficiency led Jersey dairymen Chuck Ahlem and his son and partner Mark, to adopt robot technology in their milking parlor.

Since January 2009, a robotic arm has been applying postdip iodine solution to the teats of Ahlem’s 2,700 Jersey milking herd 2X, except for four pens that make three trips through the 50-stall rotary parlor each day.

The project actually started two years earlier when engineers from Ram Mechanical (RMI) of Ceres, Calif. took on the challenge of designing the robot that applies teat dip for Green Source Automation (GSA).

The Ahlem project was the prototype for this postdip application, which now is also used at Pagel’s Ponderosa Dairy, MilkSource-Rosendale Dairy in Wisconsin and under construction at Fair Oaks Dairy, Indiana.

A new experience

“This company really stuck with it and adjusted to the challenges,” said Chuck Ahlem. “Introducing robots around animals was something they had to really work on and it took them a year longer than they thought it would. Working around cows and the movement was different. Green Source had previously worked on automation for bottling plants and glass plants. The dairy cow was a new thing for them to undertake.”

Ahlem said the robotic arm is from Fanuc Robotics model M7010 IC and is an “off the shelf” piece of equipment, but the tools and programming required by the robot were adapted by engineers from RMI.

Performance & efficiency

GSA combined the performance and efficiency of a rotary milking parlor with the consistency and accuracy of a commercial robot they call RotaryMATE. Focused on the post-dip labor position, the robot identifies and follows individual cow teats in real time.

“A stationary camera, located a few stalls ahead of the robot arm, tells the computer (and the robot) if there is a cow in the stall. But more important, if there is a cow in the stall it records whether there is a milking cluster still attached, what the cow’s leg placement is and udder height,” said Frank Dinis, herdsman for all four Ahlem dairies.

Once the computer knows the cluster is off the cow and things are clear, the robot enters the stall while the camera identifies cow teat placement in 3D for teat postdip application.The robot arm is equipped with four nozzles to apply the teat dip and sprays two at a time on each side of the udder.

Immediately after pulling out from under the cow, a squirt of clean water washes any iodine off the camera lens. The spray operation takes about 6 seconds per stall as the carousel turns at 8.5 seconds per stall. The robot arm moves with the carousel.

“You could go slightly faster, but then you get on the edge of pushing your milkers too much and quality of work suffers,”Chuck said.

Raised spreaders are mounted on the floor of each stall to help the cows keep their legs apart and in proper position for milking. “You don’t really realize how many cross-legged cows there are in the herd and the spreaders resolved that issue,” Chuck said.

“The robot has helped streamline our milking procedures.” stressed Mark. “Now milkers are covering less area it makes it much easier to get their routine down. We’re having less cows go around a second time.

“If the milker was busy postdipping and catching cows that hadn’t been milked out and reattaching units, she’d go back around again. Now that the robot is doing all the postdipping, the rover is able to catch things earlier,” he said.

Ahlem has three milkers and a pusher in their parlor operation, so they didn’t cut any positions. “If we were on a larger rotary, we could justify reducing the size of our milking crew,” said Mark.

“We could drop one milker,” interjected Chuck. “But I think the high quality, attention to detail and better herd health are good tradeoffs for keeping it as is. It just helps the milkers do a lot better job. The extra guy is sometimes pulled off to troubleshoot other problems as needed.

“The biggest plus with the robot is it doesn’t take lunch breaks, doesn’t mind working weekends, and doesn’t have any problems at home to worry about on the job,” he said with a smile.

Mark pointed out that iodine dip is the most expensive item on the list of parlor supplies and he believes they have cut the volume required to do the job by nearly 35%. The current system consistently applies dip to individual cow teats effectively and with lower usage and less waste.

“Not far down the road,” Chuck added, “Green Source is expected to switch from the current iodine dip to a foam solution that is even more efficient.” He indicated that the company has been very cautious not to move into any new changes until it is considered bulletproof.

“One feature of these robotic arms is you can get it out of your way,” said Chuck. “If all else fails and the thing goes down you can push it out of your way and go right on milking as you did before you adopted that technology. It’s not like you can’t operate the parlor without it.”

The price tag for the initial automation was approximately $300,000. Mark and Chuck called it a good investment when you consider the savings in supplies, how it frees up labor and allows your milkers to be more efficient while improving the quality of your operation.

“It’s the same thing every day. That’s one thing cows recognize. Any change or movement behind them is recognized by the cow. There is no surprise, so they are not nervous about something different from day to day,” said Chuck. “They are creatures of habit. Predip is next and we are excited about seeing them get that developed so we can have that consistency there too. Then the milkers just have to put the machines on.”

Not having to worry about pre- or postdipping will take a lot of pressure off the milkers, said Chuck.

On a larger rotary parlor the reduction in labor alone could be a most significant savings. The Ahlems have already determined to buy another robot for their new dairy in Texas, which features an 80-stall rotary.

“Most of the challenges during the project centered around computer programming,” said Mark. “They were continually upgrading the system and changing out parts that didn’t work quite as well as they had expected. Green Source was coming into the project without knowing what dairymen, his milkers and his cows would require.”

“We were the guinea pig for their development, but it was worth it,” added Chuck.

FYI

To contact Chuck or Mark Ahlem, or Frank Dinis at Charles Ahlem Ranch, Hilmar, Calif., call 209-668-0867.


Stay loose: Decision agility requires strategy, open mind

Not all parts of the human body are agile. Agility is, however, critical at the joints, allowing us to move and, in the case of athletics, compete. In business, agility is needed at the junctions where management decisions are made. Having options – and acting on them – will help make your business agile.

By Dave Natzke

The current “buzzword” in almost all business magazines is “innovation.” The message: In a fast-paced, global environment, all businesses must be innovative.

But innovation just for the sake of being innovative really does little. The challenge is application. Innovation must be applied in the context of business strengths and weaknesses, production and management structures and capabilities, and markets.

The same is true for agility. Being agile for the sake of agility means little. And, in the case of dairy, production and management structures and capabilities (and markets) mean agility be much different than in other businesses.

Production agility limited

“For many in the dairy industry, ‘agility’ just flat out does not apply,” warned Geoff Benson, professor emeritus in North Carolina State University’s Department of Ag and Resource Economics. “Dairy farms are highly specialized and capital intensive.”

For example, one definition of business agility is the ability to “scale up” to meet demand or “scale down” rapidly as a means to reduce costs and limit production. Noting the life cycle of the dairy and the dairy animal, that’s not possible in a dairy business, noted Wayne Weiland, regional business manager, Standard Dairy Consulting.

“Unlike some manufacturing industries where you can shut down production for three months while inventories clear, and then gear back up to full capacity as the recovery comes, it’s tough to initiate such actions on a dairy. The cow keeps on demanding attention, and ‘shutdowns’ take months and years to reverse. Dairy does not lend itself as well to agility.”

Another factor applies, according to Weiland. Due to the “small business” environment of most dairies, owners and managers wear multiple hats, most laborers are cross-trained, and basic operational demands don’t stop and wait. Outsourcing many components of the operation aren’t practical or financially sustainable.

Gregg Hadley, University of Wisconsin-River Falls/Extension assistant professor and farm management specialist, concedes those points. However, he doesn’t believe the production side of the business is automatically immune from the need to be agile.

“Many management decisions are made based on traditional farming practices,” he explained. “Some dairy managers use these issues as a justification for never making changes. I had a conversation with a lender during a tough dairy market, and he said, ‘My biggest concern is that a lot of farmers don’t change anything in tough times. They just try to ride the storm out.’ The producer must keep an open mind with regard to production practices.” For example:

Approach feeding from the perspective that cows need nutrients, not ingredients.

“You can’t change ingredients too frequently, but that doesn’t mean you can’t change them at all,” Hadley said. “Dairy managers need to be certain that the ration they are feeding offers them the greatest return. Don’t get caught up feeding a particular ingredient just because it has been successful in the past. With today’s price volatility, it may be a good feed, but it may be too expensive to feed.”

Manage rations. When dairy margins are good, it is usually more profitable to feed fewer rations to the herd. But as margins shrink, fine-tuning feeding groups (based on milk production and body condition score) and feeding more rations becomes increasingly justified.

Check whether your cropping plan delivers the most profitable mix of forages and grain. The most profitable mix five years ago may not be the most profitable mix today.

Leasing facilities reduces investment in fixed assets, and may allow a producer to move to cheaper/smaller facilities when times are tough; or expand into larger facilities when times are better.

Owning your own milk hauling vehicles may provide more geographical freedom to pursue a better milk market when the current contract is up.

“Some production models are inherently more agile than others,” said Greg Squires, manager of Dairy Enterprise Services. For example, an intensive grazing dairy with no fixed housing can “pull stakes” much more easily in a sustained down market than its conventional-housing counterpart, because the fixed asset structure is significantly minimized.  “I recently spoke with a dairy producer from New Zealand who described himself as an ‘investor’ first and a ‘dairyman’ second. His business model focuses on (real estate) conditions.

“Agility may also shift some dairy producers’ growth models, from building greenfield sites to acquisition of troubled assets, especially with increasing market volatility,” Squires said.

Agility comes with its own demands – typically more management, Hadley said. “They just need to keep an open mind, be creative, and ‘push the pencil’ to analyze new ideas.”

Have a strategy

“A strategic vision, operational efficiency and financial management are the keys,” said Benson. “Many dairy farm families focus on production efficiency, which is important, but they too often ignore profitability as an overarching management goal and in decision making. In my experience, financial management is the weakest of the three. Part of this is the lack of focus on profitability; part is a lack of a cash-flow management strategy to cope with volatility; and net worth issues – building wealth, reducing debt as a goal, maintaining solvency and ensuring adequate collateral for credit – forming part of the cash-flow management strategy.”

Strategic clarity and consistency requires an evaluation process or system for dealing with change. “Have a crafted, proactive approach to dealing with changing conditions, not a reactive, ‘seat-of-the-pants’ response,” said Mark Kinsel, CEO, AgriMetrica LLC. “Have contingency plans for changing condition while being agile and resilient. Be confident enough in your plan that you stay the course once you make a decision to change, and don’t try to constantly tweak the plan at every turn.”

Producers must “embrace” and manage volatility as part of business, Squires concluded.

Building a case for agility: More volatility ahead

History tells us milk prices will remain volatile in the years ahead. In fact, volatility could increase, said Matt Mattke, market advisor with Stewart-Peterson.

Mattke said one reason volatility will reign is that the market follows a typical cycle of over-production followed by significant under-production. There’s really no middle ground of balanced production in line with demand, he said.

Not only is volatility on an upward trend, the degree to which prices rise and drop appears to be getting more dramatic.

Volatility in the milk price began in the late 1980s and early 1990s, before the advent of futures trading in 1996. “But now, we’re getting to the point where we could see 40%-50% year-over-year swings in price,” he said.

Mattke doesn’t see much that could prevent this trend from gaining more momentum. Managing the supply side through milk production caps or growth quotas are possible, but Mattke doesn’t believe such an effort would necessarily smooth the road ahead. OPEC, he said, is as an example of how attempts to control pricing can have limited effect on price volatility.

Input volatility

The price of milk isn’t the only market force with which dairy producers must contend. They also have to manage the changing price of feed inputs. Recent years have reminded everyone how difficult this can be. During the bull market that began in 2006, producers witnessed record high prices for grain. “Prices have since dropped significantly,” said Mattke, “and therefore we believe grain price volatility could diminish, in the short run, if the market follows historical patterns.”

Historically, grains tend to experience long bear market tails after raging bull markets, often resulting in extended periods of sideways trading action. This is especially true of corn and wheat. Mattke believes if this pattern takes hold, dairy producers may very well see less volatility in grains.

While the thought of reduced grain volatility may be somewhat comforting, nothing is certain – except the need to be prepared. During the late 1970s, grains bucked the post-bull market trend toward long bear market tails. After dropping from record highs, sideways trading never materialized. Large price swings continued. Weather was a key factor then, and could re-emerge as a key to volatility. More than 20 years have passed since the last major Midwestern drought. Crops are more drought-tolerant today, but demand is also greater, so a drought or drought scare could send crop prices to all-time high levels.

Significant volatility could persist for a number of years on the input side. Such a scenario of high milk and grain volatility could jeopardize the viability of any ill-prepared dairy operation.

Agility will require …

“The dairy producers of the future will have to know their numbers inside and out. They will have to spend more time making $500 decisions rather than the $5 decisions. Each part of the operation will have to be evaluated.”

Gary Sipiorski

Dairy Development Manager, Vita Plus

“Business agility in my mind is more a culture or mindset. Being able to adapt your management style, including asset management, is the important thing. It is more a question of where to invest limited resources. How sensitive is my decision to the current economics? What if the economic situation changes? These are the types of questions ‘agile’ managers ask themselves.”

Mark L. Kinsel, CEO

AgriMetrica LLC

“Lenders will require the capability to maximize opportunity as a prerequisite for doing business. Volatility will continue. Those who are not agile will miss market moves and leave opportunity on the table. The best producers will be agile enough to take every penny they can get from the market, so that when prices drop below profitable levels, they have something to absorb the shock.”

Scott Stewart, President and CEO,

Stewart-Peterson

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