Archive for December, 2009

NCBA files appeal of EPA’s “Endangerment Finding” rule

The National Cattlemen’s Beef Association (NCBA) filed a petition yesterday in the DC Circuit Court of Appeals challenging the Environmental Protection Agency’s (EPA) recent greenhouse gas (GHG) “endangerment finding” rule.
“EPA’s finding is not based on a rigorous scientific analysis; yet it would trigger a cascade of future greenhouse gas regulations with sweeping impacts across the entire U.S. economy,” said Tamara Thies, chief environmental counsel. “Why the Administration decided to move forward on this type of rule when there’s so much uncertainty surrounding humans’ contribution to climate change is perplexing,” Thies said.
The endangerment finding does not in and of itself regulate GHGs, but it is a critical step in the process for GHG regulation under the Clean Air Act (CAA). The rule provides the foundation for EPA for the first time to regulate GHGs from small and large sources throughout the economy, including farms, hospitals, office buildings and schools. For example, because of this rule, EPA will be able to tell farmers that they can only emit a certain level of GHGs; if they go over that amount, they can incur severe penalties and be forced to curtail production. The rule also sets the stage for citizen suits against large and small businesses that are the backbones of the U.S. economy. In addition, increased energy costs associated with this ruling will be devastating for agriculture and the public as a whole.
“Instead of letting the issue of climate change, and man’s alleged contribution to it, be addressed through the proper democratic legislative process, EPA has decided to trump Congress and mandate greenhouse gas regulation under the Clean Air Act,” said Thies. “The Act is ill-equipped to address climate change, and Congress never intended for it to be used for that purpose.”
Under the rule, EPA defined air pollution to include six greenhouse gases, and stated that manmade greenhouse gases endanger public health and the environment.
“As was evident during difficult negotiations over the past two weeks in Copenhagen, other countries around the world like China and India are unwilling to tie the hands of their economic engines and impose these kinds of costs on their citizens,” said Thies. “This unilateral move by the EPA jeopardizes our ability to remain competitive in the global marketplace.”
The petition NCBA filed today, as part of a coalition of interested parties, is the first step in asking the DC Circuit Court of Appeals to overturn EPA’s rule due to a lack of sound or adequate basis for making the finding of endangerment from anthropogenic GHGs.
“‘Climategate’ revealed that the data on which the EPA relied to make this finding is questionable and may have been manipulated to tell a story that global warming alarmists wanted to tell,” said Thies.  “The fact that the EPA is ignoring this scandal is not going to make it go away.”
According to the EPA, in 2007, GHG emissions from the entire U.S. agriculture sector represented less than 6% of total U.S. GHG emissions, and the livestock industry emitted only 2.8%. At the same time, land use, land use change, and forestry activities resulted in a net carbon sequestration of approximately 17.4% of total U.S. carbon dioxide emissions, or 14.9% of total U.S. greenhouse gas emissions.
For more information: http://www.beefusa.org/NEWSEPAGreenhouseGasRulingCouldbeDevastatingtoAgriculture39958.aspx

The National Cattlemen’s Beef Association (NCBA) filed a petition, Dec. 23, in the D.C. Circuit Court of Appeals challenging the Environmental Protection Agency’s (EPA) recent greenhouse gas (GHG) “endangerment finding” rule.

“EPA’s finding is not based on a rigorous scientific analysis; yet it would trigger a cascade of future greenhouse gas regulations with sweeping impacts across the entire U.S. economy,” said Tamara Thies, chief environmental counsel. “Why the Administration decided to move forward on this type of rule when there’s so much uncertainty surrounding humans’ contribution to climate change is perplexing,” Thies said.

The endangerment finding does not in and of itself regulate GHGs, but it is a critical step in the process for GHG regulation under the Clean Air Act (CAA). The rule provides the foundation for EPA for the first time to regulate GHGs from small and large sources throughout the economy, including farms, hospitals, office buildings and schools. For example, because of this rule, EPA will be able to tell farmers that they can only emit a certain level of GHGs; if they go over that amount, they can incur severe penalties and be forced to curtail production. The rule also sets the stage for citizen suits against large and small businesses that are the backbones of the U.S. economy. In addition, increased energy costs associated with this ruling will be devastating for agriculture and the public as a whole.

“Instead of letting the issue of climate change, and man’s alleged contribution to it, be addressed through the proper democratic legislative process, EPA has decided to trump Congress and mandate greenhouse gas regulation under the Clean Air Act,” said Thies. “The Act is ill-equipped to address climate change, and Congress never intended for it to be used for that purpose.”

Under the rule, EPA defined air pollution to include six greenhouse gases, and stated that manmade greenhouse gases endanger public health and the environment.

“As was evident during difficult negotiations over the past two weeks in Copenhagen, other countries around the world like China and India are unwilling to tie the hands of their economic engines and impose these kinds of costs on their citizens,” said Thies. “This unilateral move by the EPA jeopardizes our ability to remain competitive in the global marketplace.”

The petition NCBA filed today, as part of a coalition of interested parties, is the first step in asking the DC Circuit Court of Appeals to overturn EPA’s rule due to a lack of sound or adequate basis for making the finding of endangerment from anthropogenic GHGs.

“‘Climategate’ revealed that the data on which the EPA relied to make this finding is questionable and may have been manipulated to tell a story that global warming alarmists wanted to tell,” said Thies.  “The fact that the EPA is ignoring this scandal is not going to make it go away.”

According to the EPA, in 2007, GHG emissions from the entire U.S. agriculture sector represented less than 6% of total U.S. GHG emissions, and the livestock industry emitted only 2.8%. At the same time, land use, land use change, and forestry activities resulted in a net carbon sequestration of approximately 17.4% of total U.S. carbon dioxide emissions, or 14.9% of total U.S. greenhouse gas emissions.

For more information: http://www.beefusa.org/NEWSEPAGreenhouseGasRulingCouldbeDevastatingtoAgriculture39958.aspx

Human Resources: Get ready for 2010

By Felix Soriano, MS, PAS

We’ve probably gone through one of the worst dairy economic crisis in history.  Fortunately, many dairy economic indicators suggest that 2010 will be a much better year for dairy producers with very promising milk prices.

Although it will take a while to recover from this crisis (some will taker longer than others) , producers need to be prepared to take advantage of good milk prices ahead.

Here is a list of management practices you need to consider that will help you maximize your productivity and profitability in 2010:

1-Focus on income over feed cost (IOFC) – Cutting feed cost has been the main focus of both nutritionists and producers this year.  Now it’s time to focus on maximizing herd performance and feed efficiency.  Don’t make any nutritional changes without calculating IOFC first.  Monitor IOFC weekly or at least monthly.  Work with your nutritionist to maximize IOFC.

2-Reduce feed losses – If you haven’t done so yet, make an assessment of your bunk management and feed losses.  Is there room for improvement?  Evaluate the way you handle and store commodities, by products, and concentrates, and ensure that losses are minimized in the commodity bays.

3-Monitor the mixing and feeding process – Do you have feeding protocols?  If you don’t, work with your nutritionist to develop SOP’s to ensure feeding and loading consistency between feeders.  SOP’s will also reduce variations between and within batches of feed.  Monitor loading and feeding accuracy of your feeders to reduce feeding costs.  Finally, ensure that feed refusals are kept low (not more than 2%).

4-Focus on your transition cow program – Don’t cut corners or feed cost on your close ups and fresh cows.  Furthermore, spend more money in these two groups to maximize performance and health.  Remember that what happens at this stage will affect peak milk and the entire lactation performance of the cows.

5-Maximize parlor performance – To get the most out of your cows you need to ensure that your milkers are performing a consistent milking routine.  Review your milking routine if necessary to ensure optimum milk letdown and monitor milker’s performance all the time.  Meet with your milker’s on a monthly basis to show them parlor performance numbers and SCC.  Finally, conducting training and refresher meetings with your employees is crucial to keep them motivated and performing to your expectations.

So remember, you can’t afford to miss the boat.  Be ready to make as much milk as possible next year but, maintaining cost and efficiency always in check.

FYI

■ Felix Soriano is a labor management and human resource consultant with APN Consulting LLC, Warrington, Pa. Contact him via phone: 215-738-9130, e-mail: felix@apndairy.com or visit www.apndairy.com.

DFA expands Farm Services Division

Bruce Hageman has joined Dairy Farmers of America, Inc. (DFA) as vice president of the Cooperative’s Farm Services division.

In this role, the 20-year dairy industry marketing veteran will work closely with staff at each of DFA’s Area offices, farmer leaders and key employees to promote Farm Services available to DFA members. The Farm Services division includes a diverse collection of services and programs designed to improve on-farm efficiencies and increase profit margins, including risk management, health insurance, financial services and bulk buying programs.

“Adding a leader of Bruce’s caliber to our staff is an important step in increasing awareness and member utilization of the resources available through Farm Services,” said Rick Smith, president and CEO. ”Bruce also will be instrumental in helping us identify new areas of need where expanded products and services can bring value to members.”

Before joining DFA, Hageman was vice president of marketing for an animal nutrition company where he was responsible for communications, product strategy and all marketing functions. Previously, he led global marketing efforts for a company producing yeast culture supplements targeted toward dairy cattle. Prior to that position, Hageman spent 18 years in progressive sales and marketing leadership roles in the animal nutrition business unit of a major consumer products company.

Hageman and his wife will reside in the Kansas City, Mo., area.

Dairy checkoff annual report online

The national dairy producer checkoff has developed a new annual report format that is easily accessible, convenient and efficient, and that offers an interactive experience for dairy producers, industry leaders and others.

The annual report, now available at www.dairycheckoff.com, contains results and highlights about how dairy producers’ checkoff investment increased dairy sales through partnerships, innovation and new market channels.

“In a year of tough economic decisions and challenges, our dairy checkoff is proactively reducing costs and providing a more interactive and enjoyable way to view the annual report,” said Paul Rovey, Arizona dairy producer and chair of Dairy Management Inc.™, which manages the national dairy checkoff. “The new format will allow producers to quickly find topics of most importance to them. This annual report tells a bigger story and allows the checkoff to provide the latest news and information to dairy producers.”

The annual report contains links to additional information about key programs and initiatives for readers who require more detail. It also can be printed as an entire publication in color or black and white, or as individual pages. Each section is designed as a stand-alone piece that can be printed for producers to share with others in the industry.

For producers who would like a printed report sent to them, please contact 800-85DAIRY (853-2479).

Dairy Checkoff Partnerships and Innovation Drive Sales in 2009

Rosemont, IL – America’s dairy producers, through their investment in the dairy checkoff, helped the dairy industry drive sales through food industry partnerships and innovation in 2009.

“In a year where dairy producers faced economic hardships like never before, the dairy checkoff responded by redirecting more than $35 million to further focus on immediate- and long-term sales,” said Tom Gallagher, chief executive officer for Dairy Management Inc.™ (DMI), which manages the national dairy producer checkoff. “By building powerful partnerships and developing innovative new product channels, our efforts (along with low retail prices) helped drive between 2.5 and 3.5 billion pounds in additional milk sales in 2009.”

Gallagher cited these key accomplishments that helped dairy producers and the U.S. dairy industry build sales in 2009 and beyond.

  • Partnering to create a “Legend.” Dairy producers began a partnership with Domino’s Pizza® to help revitalize the pizza category and build cheese sales. In February, Domino’s introduced its American Legends™ pizzas, which are six specialty pizzas that use up to 40 percent more cheese than the chain’s traditional pizzas. Domino’s invested four to five times the amount dairy producers invested, and due to the success of the specialty pizzas other chains are increasing cheese on their pizza offerings as well.
  • Reformulating school pizza. National and local dairy checkoff organizations are working with industry partners to create a school pizza that will meet increasingly restrictive school nutrition guidelines, while also meeting kids’ taste preferences. School pizza is the most popular entrée in schools, and therefore is an important priority for growing long-term sales.
  • Growing dairy sales at McDonald’s®. As part of a multi-year partnership between dairy producers and McDonald’s, the chain launched its McCafe® specialty coffee offerings – which use up to 80 percent milk – in its 14,000 restaurants across the country. McDonald’s also launched its Third Pounder Angus Burgers, three new burger options with two slices of cheese per sandwich, resulting in an additional 6 million pounds of cheese sold.
  • Creating new opportunities for lactose-free milk. Dairy producers partnered with milk processor HP Hood® and its Lactaid® brand to make innovative milk products available to the nearly one in four Americans who have either left or are at risk of leaving the milk category due to actual or perceived lactose intolerance. Bringing these lapsed consumers back to milk could require an additional 2.5 to 5 billion additional pounds of milk each year.
  • Bringing new products to new locations at retail. Dairy producers worked with General Mills’ Yoplait® brand to develop a new line of frozen fruit and yogurt smoothies that use an innovative yogurt chip technology and require 8 ounces of milk. In 2009, General Mills rolled out the smoothies at grocery stores across the country – for the first time featuring the yogurt chips in the frozen foods section. The company said the new yogurt smoothies were among its most successful product tests ever.
  • Growing ingredient sales at foodservice. The dairy checkoff worked with Starbucks® Coffee Company to build U.S. dairy ingredient sales with the help of a third flavor in the Vivanno™ Smoothie line, which uses whey protein and fluid milk. In all, these smoothies account for more than 3.7 million pounds of whey protein and 550 million pounds of fluid milk annually.
  • Maintaining momentum for single-serve milk. Dairy checkoff staff continues to work with individual processors, schools and foodservice chains to ensure that consumers have the fluid milk products they want, when and where they want it. Today, more than 70,000 restaurants across the country and 11,000 schools offer white and flavored milk in single-serve, plastic, resealable bottles.
  • Focusing on dairy health and wellness. The National Dairy Council®, the nutrition education and research arm of the dairy checkoff, maintains and grows support for dairy’s nutrition and health benefits by working with health and marketplace leaders. The “Fuel Up to Play 60” program helps combat childhood obesity by encouraging schools to implement physical activity and good nutrition, including dairy.
  • Fostering industry collaboration. In 2009, the Innovation Center for U.S. Dairy (established by dairy producers through their checkoff) brought industry leaders together to develop action plans, which are aligned with dairy producer priorities. The Innovation Center, which focuses on health and wellness, product development and information, sustainability, consumer confidence, and globalization, has brought together more than 180 companies and nearly 400 individuals to protect and grow sales.
  • Strengthening global markets. Dairy producers, through the U.S. Dairy Export Council® (USDEC) continue to help protect global markets for U.S. dairy. Despite the global economic recession, more than 9 percent of U.S. milk production was exported (through October 2009).
  • Enhancing dairy farmer image. In 2009, national and local dairy checkoff organizations helped recruit thousands of dairy producers to tell their story to the public. Dairy checkoff staff developed and enhanced training workshops that help dairy producers and allied industry communicate about on-farm issues, including animal care and environmental stewardship, through community relations, presentations to local organizations, one-on-one conversations, and social media.

“Despite ongoing challenges, the U.S. dairy industry’s future is bright,” Gallagher said. “By engaging industry partners, leveraging dairy’s health and wellness benefits, and encouraging the industry to innovate, we can grow sales.”

For more information about producer-funded programs, visit www.dairycheckoff.com.

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Dairy Should be Excluded in Trans-Pacific Agreement, Urge NMPF and USDEC

ARLINGTON, VA – U.S. dairy producers and exporters today urged the government to exclude any dairy-related changes in the trade relationship between the United States and New Zealand as part of a new free trade agreement between the countries.

In a letter sent to U.S. Trade Representative Ron Kirk, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) reaffirmed their commitment to seek full exclusion of trade in dairy products between the United States and New Zealand under the Trans-Pacific Partnership (TPP) Free Trade Agreement, because of the New Zealand dairy industry’s unique structure and excessive degree of control over dairy markets globally and in the United States.

Kirk notified Congress Monday that President Obama intends to enter into negotiations of a regional Asia-Pacific trade agreement, known as the TPP, which would create a new free trade pact that would include seven other nations: Australia, Chile, Singapore, Peru, Brunei, Vietnam and New Zealand. The United States already has trade agreements with these countries, except for New Zealand, Vietnam and Brunei, which is essentially a small city-state.

New Zealand is the world’s largest dairy exporter and benefits tremendously from the virtual dairy monopoly that currently exists there, whereby one company controls more than 90% of the country’s milk production. Although an agreement that included Vietnam would offer some new export opportunities, they would not come close to offsetting the negative impact to the U.S. dairy industry being forced to compete on an uneven playing field against New Zealand, said Tom Suber, USDEC president.

“NMPF and USDEC firmly believe in the value of balanced trade agreements in reducing and ultimately eliminating [global] trade distortions,” the two organizations wrote. “This is why we have strongly supported the vast majority of FTAs pursued by the United States over the years, and it is why we also support the three FTAs currently pending congressional approval … As this Administration focuses on growing our competitiveness in Asia, we urge USTR to focus strongly on the agreement already in hand: the U.S.-South Korea FTA.”

“The heightened prospect of greater exploitation by New Zealand of not only global markets but also our domestic industry and policy would make an already uneven playing field in the global markets worse,” noted Jerry Kozak, president and CEO of NMPF. “This heavy influence on our markets will drive down dairy farmer income in America, force farms out of business, and create a ripple effect on dairy plants and other rural businesses—all at a time when our economy is slowing and unemployment is rising.”

Suber agreed, adding, “This agreement would create virtually no new opportunities for U.S. dairy exports, given existing relations with most of the significant economic participants. That is particularly unfortunate because the dairy sector is one of the most protected agricultural sectors globally.” USDEC has worked with NMPF to lead the drive for broad, multilateral reform of global dairy markets. NMPF and USDEC have underscored the fact that no other country in the world, let alone the United States, has a dairy industry with the characteristics of that in New Zealand.

“There’s only one way to deal with such a unique and monopolistic situation,” Kozak said, “and that is through an equally unique response: full exclusion of all U.S.-New Zealand dairy trade.”

USDA: Impacts of CWT, sexed semen

The following special report was included in the Dec. 17, 2009 USDA dairy outlook report.

By Rachel J. Patton

The Cooperatives Working Together (CWT) herd retirement program is one element of a voluntary industry-led initiative available to dairy producers, intended to provide support for milk prices by removing milk cows from production (http://www.cwt.coop/ ).

Depressed milk prices prompted five “rounds” of CWT herd retirements during 2008-09. Two rounds occurred in the second half of 2008 and, with the Oct. 1, 2009 announcement of another herd retirement, three rounds will have occurred in 2009. According to the CWT, the first two CWT rounds in 2009 led to the removal of 175,153 dairy cows representing about 3.5 billion lbs. of milk production. The announcement of accepted bids in the third 2009 round, on Oct. 15, indicated that just over 26,000 more cows will be retired in 2009. Totals from the 2008-2009 series of retirements reported by the CWT are over 250,000 dairy cows and 5 billion lbs. of milk removed from production, equivalent to about 2.7% of annual output.

The purpose of this article is to explain why the CWT may have less effect than expected on both milk production and dairy cow slaughter prices. Because CWT is a whole herd buyout, new technology like sexed semen did not have a major impact in short run expansion because new facilities will be required as CWT has removed farms from the dairy industry.

The CWT buyouts have contributed some price support for dairy producers during 2009. An independent economic analysis indicated that milk prices have increased by $1.54/cwt. as a result of CWT activities that included both herd buyouts and dairy product export assistance (http://www.cwt.coop/impact/impact_index.html).

The dairy herd is expected to continue to decrease and is forecast to fall below 9 million head during 2010, making it one of the smallest herds in recent years.

However, milk production is forecast to only decline by less than 0.5% in 2009 from 2008. And, although the all milk price is forecast to increase to $14.95-$15.15/cwt. for the fourth quarter of 2009 and to $16.35-17.15/cwt. for 2010, prices are still below estimated costs of milk production for many producers, not as  high as many in the industry had hoped. While the buyout-induced decline in milk production has not been as significant as many in the industry would have preferred, the effect on prices of culled animals has also not been as depressing as some in the beef cow sector have feared.

In the absence of a removal program dairy producers typically cull about one-fourth of their cow herds, as indicated by a 2007 AHPIS survey, (http://nahms.aphis.usda.gov/dairy/dairy07/Dairy2007_PartIII_rev.pdf ) and mostly replace them with heifers that have calved. Dairy cows are culled for reasons associated with their inability to profitably produce high-quality milk and calves. Milk fat production begins to decline when cows reach their prime, at about 6 years of age (Tyler and Ensminger, Dairy Cattle Science, p. 217); thus, cows tend to be culled when their productivity begins to decline after 3 or 4 lactations, or when they are 5 to 6 years old. Reproductive and udder/mastitis problems are also significant reasons dairy cattle are culled.

However, the impact of low milk prices would likely have driven some producers to increase culling or exit the industry by liquidating entire herds in the absence of CWT. The average rate of change in January 1 dairy cow inventories since 1965 has been a decline of 1.3% over a range of changes from a maximum decline of almost 6% (1966) to a gain of just over 3% (1986).

According to NASS Jan. 1, 2009 dairy cow inventory data, dairy cow inventories have increased every year the CWT program has been a factor since its inception in 2003 except 2004, when the net decline was 154,500 cows. The dairy herd is forecast to decline in 2009, a situation that was expected prior to any 2009 CWT announcements (see Livestock Dairy and Poultry Outlook M-177, March 18, 2009). The effect of the CWT herd buyout on dairy cow inventories is likely less than the number of cows actually “bought out,” as a proportion of these animals would have been culled due to economic conditions.

A second reason that milk production and dairy cow slaughter may have been less than expected as a result of the CWT culling is that to the extent that each successive CWT herd buyout was expected to provide stronger milk prices, incentive existed for nonparticipating producers to increase or maintain production at the higher expected prices. Production practices might have been altered to be more in line with higher anticipated, but ultimately never realized, prices than those that would typically be seen in a period of oversupply.

Finally, a third reason that milk supply may not have declined as much as expected is because typically the less productive cows are culled. Year-over-year increases in milk per cow have been maintained in 2009 at a rate near to increases of the past 20 years. For all of 2009, production per cow is forecast to be 20,553 lbs, up from 20,396 lbs in 2008. When calculated on a daily basis, accounting for the extra milking day (leap year) in 2008, output per cow is forecast to increase from 55.7 lbs per day in 2008 to 56.4 lbs per day in 2009. This 1.3% year-over-year increase is below the 1.8% average since 1989, and may be more than many expected, given that milk prices failed to cover feed costs for producers in much of the country from fall 2008 until fall 2009.

There have been concerns that increased use of sexed semen technologies may partially offset the intended milk production-reducing effects of the recent CWT herd buyouts (or any other culling actions) due to fears of additional heifers being introduced into the dairy herd. However, sexed semen is a longer term issue and did not have an impact on offsetting CWT removals on short-run expansion. While the use of sexed semen can increase the number of heifers from which replacements could be selected, it is not likely to have a great near-term impact on milk production or milk prices. 1/ There are two reasons for this: The CWT was a whole herd buyout and facility expansion would be necessary for major expansion. In addition, it takes about 3 years between the time that a cow is impregnated until the calf is producing milk. Nevertheless, in the longer term, with circumstances of high milk prices and high replacement cow prices and/or decreasing costs associated with the technology, widespread use of sexed semen could become a greater factor in milk supply, particularly if heifers with greater genetic merit are a consequence of improvements in the technology.

1/ Sexed semen technologies have been commercially available in the dairy industry for the last few years. The sorting method allows female sperm to be separated from male sperm. Milk producers using the technology increase the chances of obtaining heifer calves to 90% of the calf crop, from a naturally expected 50%.  Conception rates are about 25% lower with sexed semen and breeding costs are roughly four times that of conventional semen (De Vries, 2009: The Economics of Sexed Semen in Dairy Heifers and Cows; Fetrow, Overton, and Eicker, 2007: Sexed Semen: Economics of a New Technology). These negatives are likely to undermine a more widespread commercial use until the financial returns to dairy increase sufficiently to more than cover the increased net costs.


DELAP details announced by USDA

USDA Announces New Dairy Economic Loss Assistance Payment Program to Provide Financial Relief to Struggling Dairy Producers
WASHINGTON, Dec. 17, 2009 – Agriculture Secretary Tom Vilsack announced the implementation of the new Dairy Economic Loss Assistance Payment (DELAP) program. The 2010 Agricultural Appropriations Bill authorized $290 million for loss assistance payments to eligible dairy producers.
“Through this program, eligible dairy producers will receive economic assistance that will help stabilize their operations during these tough economic times,” said Vilsack. “I have personally heard from hundreds of struggling dairy farmers from all across our country who have been hit hard by declining prices over the past year, and now, we’ll be able to offer them help.”
Milk prices declined substantially through early-to-mid-2009, with the national price for milk averaging $16.80 per hundredweight (cwt.) in the fourth quarter of 2008 and averaging $12.23 per cwt. in the first quarter of 2009, a 27-percent decline. On average, the price U.S. dairy producers received for milk marketed in the summer of 2009 was about half of what it cost them to produce milk.
“The dedicated employees of the Farm Service Agency deserve a great deal of credit for acting quickly to provide this critical assistance to America’s dairy farmers,” said Jim Miller, Under Secretary of USDA Farm and Foreign Agricultural Services.
Eligible producers will receive a one-time direct payment based on the amount of milk both produced and commercially marketed by their operation during the months of February through July 2009. Production information from these months will be used to estimate a full year’s production for an operation to calculate the payments, using a 6-million pound per dairy operation limit.
Dairy producers who have production records at the USDA Farm Service Agency (FSA) county office because they participated in another FSA dairy program do not need to apply for the program. FSA will use existing production records for February through July 2009 to calculate and issue their payments.
Producers who have not provided production data for those months to FSA, and have not already been contacted by FSA to provide such data, have 30 days, until Jan. 19, 2010, to apply. FSA officials estimate that more than 95 percent of eligible producers will receive benefits without having to fill out a new application.
A national per hundred weight payment rate will be determined by dividing the available funding of $290 million, less a reserve established by FSA, divided by the total pounds of eligible milk production approved for payment. Based on current information, FSA estimates that 875 million cwt. of milk production will be eligible for payment. The reserve will cover new applicants and appeals. The expected payment rate is approximately $0.32 per cwt.
To be eligible for DELAP, the dairy producer and the dairy operation in which the producer has a share:
Must have produced milk in the United States and marketed milk commercially at any time from February through July 2009;
Must have milk production data for those months;
Must certify to all milk production produced and marketed by the dairy operation during that time.
Also, any dairy producer who has an annual average adjusted gross nonfarm income of more than $500,000 for calendar years 2006 through 2008 is not eligible for DELAP.
For more information and eligibility requirements on the new DELAP program, please visit your local FSA county office or www.fsa.usda.gov.
Through much of this past year, USDA took a number of steps to provide relief to dairy farmers around the country. Some of these steps include:
USDA reactivated USDA’s Dairy Export Incentive Program (DEIP), to help U.S. dairy exporters meet prevailing world prices in addition to encouraging the development of international export markets in areas where U.S. dairy products are not competitive due to subsidized dairy products from other countries.
USDA spent approximately $1 billion in fiscal year 2009 on purchases of dairy products (Dairy Product Price Support Program) and payments to producers (Milk Income Loss Contract (MILC).
USDA increased the amount paid for dairy products through the Dairy Product Price Support Program (DPPSP). USDA estimates that these increases, which were in place from August 2009 through October 2009, increased dairy farmers’ revenue by approximately $243 million.
In March, USDA transferred approximately 200 million pounds of nonfat dry milk to USDA’s Food and Nutrition Service, which will not only remove inventory from the market, but also support low-income families struggling to put nutritious food on their tables.

Payment expected to be 32¢/cwt. under Dairy Economic Loss Assistance Payment program, includes a 6 million lbs. production cap

WASHINGTON, Dec. 17, 2009 – U.S. Agriculture Secretary Tom Vilsack announced the implementation of the new Dairy Economic Loss Assistance Payment (DELAP) program. The 2010 Agricultural Appropriations Bill authorized $290 million for loss assistance payments to eligible dairy producers.

“Through this program, eligible dairy producers will receive economic assistance that will help stabilize their operations during these tough economic times,” said Vilsack. “I have personally heard from hundreds of struggling dairy farmers from all across our country who have been hit hard by declining prices over the past year, and now, we’ll be able to offer them help.”

Milk prices declined substantially through early-to-mid-2009, with the national price for milk averaging $16.80/cwt. in the fourth quarter of 2008, and averaging $12.23/cwt. in the first quarter of 2009, a 27% decline. On average, the price U.S. dairy producers received for milk marketed in the summer of 2009 was about half of what it cost them to produce milk.

Payment calculations

Eligible producers will receive a one-time direct payment based on the amount of milk both produced and commercially marketed by their operation during the months of February through July 2009. Production information from these months will be used to estimate a full year’s production for an operation to calculate the payments, using a 6 million lb. per dairy operation limit.

Dairy producers who have production records at USDA Farm Service Agency (FSA) county office because they participated in another FSA dairy program do not need to apply for the program. FSA will use existing production records for February through July 2009 to calculate and issue their payments.

Producers who have not provided production data for those months to FSA, and have not already been contacted by FSA to provide such data, have 30 days, until Jan. 19, 2010, to apply. FSA officials estimate that more than 95% of eligible producers will receive benefits without having to fill out a new application.

A national per hundredweight payment rate will be determined by dividing the available funding of $290 million, less a reserve established by FSA, divided by the total pounds of eligible milk production approved for payment. Based on current information, FSA estimates that 875 million cwt. of milk production will be eligible for payment. The reserve will cover new applicants and appeals. The expected payment rate is approximately 32¢/cwt.

To be eligible for DELAP, the dairy producer and the dairy operation in which the producer has a share:

• Must have produced milk in the United States and marketed milk commercially at any time from February through July 2009;

• Must have milk production data for those months;

• Must certify to all milk production produced and marketed by the dairy operation during that time.

Also, any dairy producer who has an annual average adjusted gross nonfarm income of more than $500,000 for calendar years 2006 through 2008 is not eligible for DELAP.

For more information and eligibility requirements on the new DELAP program, please visit your local FSA county office or www.fsa.usda.gov.

Previous USDA steps

Through much of this past year, USDA took a number of steps to provide relief to dairy farmers around the country. Some of these steps include:

• USDA reactivated USDA’s Dairy Export Incentive Program (DEIP), to help U.S. dairy exporters meet prevailing world prices in addition to encouraging the development of international export markets in areas where U.S. dairy products are not competitive due to subsidized dairy products from other countries.

• USDA spent approximately $1 billion in fiscal year 2009 on purchases of dairy products (Dairy Product Price Support Program) and payments to producers (Milk Income Loss Contract (MILC).

• USDA increased the amount paid for dairy products through the Dairy Product Price Support Program (DPPSP). USDA estimates that these increases, which were in place from August 2009 through October 2009, increased dairy farmers’ revenue by approximately $243 million.

• In March, USDA transferred approximately 200 million pounds of nonfat dry milk to USDA’s Food and Nutrition Service, which will not only remove inventory from the market, but also support low-income families struggling to put nutritious food on their tables.

USDA, Innovation Center for U.S. Dairy sign sustainability, GHG agreement

Landmark joint effort showcases dairy industry’s sustainability leadership and creates opportunities for further environmental and economic benefits

Rosemont, IL — USDA and the Innovation Center for U.S. Dairy agreed to work jointly in support of the U.S. dairy industry’s goal to reduce greenhouse gas emissions by 25% over the next decade.

In a landmark memorandum of understanding (MOU), the USDA and the industrywide dairy group identified a variety of projects that can help the dairy industry achieve those greenhouse gas reduction goals and increase its financial and environmental sustainability.

The agreement was signed by Agriculture Secretary Tom Vilsack and Thomas P. Gallagher, chief executive officer of the Innovation Center for U.S. Dairy and Dairy Management Inc. (DMI), which manages the national dairy checkoff program on behalf of the nation’s dairy farmers. DMI was one of the founding organizations of the Innovation Center for U.S. Dairy, which was created to foster industrywide pre-competitive collaboration and innovation on strategies designed to increase sales of milk and milk products.

“This historic agreement, the first of its kind, will help us achieve the ambitious goal of drastically reducing greenhouse gas emissions while benefitting dairy farmers,” said Vilsack.  “Use of manure to electricity technology is a win for everyone. It provides an untapped source of income for famers, it provides a source of renewable electricity, reduces our dependence on foreign fossil fuels, and provides a wealth of additional environmental benefits.”

“This memorandum came about because of the commitment of U.S. dairy farmers and the dairy industry to a sustainable future that includes both environmental and economic viability,” said Gallagher. “Sustainability goes hand in hand with our heritage of taking care of the land and natural resources while producing nutritious products that consumers want.”

Under the agreement, USDA will take a number of steps to help farmers, including supporting a strategic research plan to help the industry further reduce environmental impacts. Other initiatives would help the industry develop future technologies, advance nutrient management, support renewable energy, and improve energy efficiency. These efforts build on the Innovation Center’s U.S. Dairy Sustainability Commitment, which includes projects designed to reach the greenhouse gas reduction goal of 25% by 2020 (usdairy.com/sustainability).

Potential outcomes of the MOU include accelerating opportunities to adopt livestock manure processing systems that capture methane gas from livestock manure and convert it into electricity, coordinating research information on life cycle assessments, and supporting the industry’s efforts in energy audits, feed management and energy conservation.

Gallagher noted that the Innovation Center is nearing completion of an unprecedented life cycle assessment of fluid milk from farm to table. Initial estimates by the Applied Sustainability Center at the University of Arkansas show that the entire dairy supply chain, from cattle feed ingredients through packaging and transportation to the consumer’s table, accounts for less than 2 percent of total greenhouse gas emissions in the U.S.

“The dairy industry’s on-going efforts to improve milk production efficiency over the past six decades have already reduced greenhouse gas emissions at the farm level by more than 60 percent,” said Indiana dairy producer Mike McCloskey, chairman of the Innovation Center’s Sustainability Committee. “To feed a growing world we must continue to develop new ideas, innovations and best practices to preserve natural resources and secure a healthy future for the next generation.”

The MOU between USDA and the Innovation Center may also help accelerate adoption of methane gas digesters for all sizes of dairy farms, making it easier to connect digesters to electricity grids and help digester operators capture potential carbon offset payments. Additional support from the USDA could include research on how feed mixtures affect methane emissions from cows. Opportunities to reduce so-called enteric emissions have been identified by dairy stakeholders in the Innovation Center’s industrywide plan to cut greenhouse gas emissions.

“We are very pleased to be working with Secretary Vilsack and the entire USDA,” Gallagher said. “The additional cooperative efforts and assistance spelled out in this agreement will help the dairy industry move forward with its greenhouse gas reduction roadmap and further its role as a leader in sustainability.”

Innovation Center for U.S. Dairy provides a forum for the dairy industry to work pre-competitively to address barriers to and opportunities for innovation and sales growth. The Innovation Center aligns the collective resources of the industry to offer consumers nutritious dairy products and ingredients, and promote the health of people, communities, the planet and the industry. The Board of Directors for the Innovation Center represents leaders of more than 30 key U.S. producer organizations, dairy cooperatives, processors, manufacturers and brands. The Innovation Center is supported and staffed by Dairy Management Inc. For more information, contact innovationcenter@usdairy.com or visit USDairy.com.


‘Pack’ Mentality: Bedded packs have many pluses, but bedding savings Is not one of them

Animal comfort, health and productivity are enhanced, but management is key, and bedding cost and availability are limiting factors.

By Susan Harlow

Comfortable, healthy cows, less manure odor, excellent soil amendment, environmental benefits… What’s not to like about bedded packs?

Bedding cost and availability, that’s what. Composting bedded pack barns, which rely on sawdust rather than straw, may be particularly questionable now, when sawdust is locally expensive and hard to find.

In fact, the growth of composting barns has slowed in the Midwest because of bedding costs, said Marcia Endres of the University of Minnesota, who researches compost barns.

But in the Northeast, more hoop-style bedded packs are being built, especially by smaller producers looking for an alternative to covered barnyards. Government cost-share money for their environmental benefits also makes bedded packs attractive.

There are two types of bedded packs:

1) A deep bedded pack, most common in the Northeast where availability of sawdust is a constraint, has bedding added daily and is not turned or tilled.

2) A composting, or aerated pack, common in the Midwest, is tilled usually twice daily with a cultivator or rototiller.

Management is just as essential with a bedded pack system as for a freestall or tiestall barn. Poor management will negate any upside.

In a recent case study of a dairy with a bedded pack, Cornell University’s Department of Applied Economics and Management found the system offers “an excellent environment” for cattle and has environmental benefits, but said managing bedding costs is crucial to make it sustainable.

Larry Wilterdink of Waldo, Wis., goes through a semi-trailer load of sawdust once every three months in summer and once a month in winter to bed his 80-head composting bedded-pack barn. The price has risen in the three years since he built the barn – from $1,400 to $1,700/load.

“It doesn’t really scare me because I figure I’m making it up in cow health and not culling out cows,” Wilterdink said. The pack compost also gives him the benefit of excellent fertilizer, and a product to sell off-farm.

Wilterdink wanted cow comfort from his barn and he got it, along with odor control and healthier cows. “Cows last longer in the herd and breeding is better because heat detection is easier,” he said. It’s a good way to store manure as well, especially because his dairy, near a river, probably couldn’t be permitted for a liquid storage system.

Bedded pack  barns offer these benefits:

• Manure management.  Many producers turn to bedded packs to get away from liquid storage systems. The barns keep odors under control and used bedding can be spread on fields or composted.

• Cow comfort. Bedding depth, starting at about a foot, cushions cows. A recent study by the University of British Columbia found cows prefer bedded packs to freestalls when given the choice, and spend more time lying down  and standing on packs.

• Herd health. Cows’ feet and legs do better on packs. Endres found less lameness, 6.5% in compost barns, compared to 17% in sand freestalls.  Hock lesions were fewer, as well.

Cleaner udders can reduce milking prep time and mastitis. Studies in Wisconsin and Minnesota noted a drop in mastitis on bedded packs, although a recent study by Cornell University saw no change from freestalls.

“Management is more finicky than in a freestall, so if you don’t manage it right, you’ll have the same problems, only worse. You have to do it well to gain the benefits and avoid problems,” said Tom Gilbert, executive director of Highfields Institute, Hardwick, Vt., a nonprofit organization which promotes composting.

• Better reproduction. Heat detection can be improved by as much as 5%, Gilbert said, boosting pregnancy rates (PR) by as much as 3%. Endres’ study showed a 2% rise in PR, to 16.5%.

• Improved milk production. Cornell’s study found milk production rose 2,000 lbs. per cow, in part because of the bedded pack.

•  Improved soils. Manure removed from a bedded pack and composted, then spread on fields, add significant organic matter and nutrients – eventually. “Composted material is very stable, so you don’t see much agronomic return in the first year,” Gilbert said.

Guy Choiniere, Sheldon, Vt., grazes his cows in summer, but makes sure they’re on their bedded pack full-time by mid-October. “They have a job to do between Oct. 15 and April 15, and that’s produce 800 tons of manure,” he said. After cleaning the barn – a job that takes  him one day – Choiniere spreads some raw manure on his fields to maintain a diversity of feed for soil microorganisms, and piles the rest for the following spring.

Choiniere built the SuperStructure barn five years ago. At 7,200-square feet, the barn isn’t roomy enough for the 85-head milking herd and youngstock older than six months, which take up one-third of the barn. So in the winter, half the milking herd spends half the day in the tiestall and half in the hoop barn.

He’s impressed by the cow comfort and health, although his initial goal was environmental. “I put it in to take care of covered barnyard problem and so I wouldn’t have to enlarge my pit for more liquid manure,” he said.

That was Earl Fournier’s idea, too. His Cover-All fabric barn serves as a covered barnyard with plenty of light. Fournier, of Swanton, Vt., keeps about 25 6- to 12-month old heifers on the bedded pack.

The pack has meant better foot health and less laminitis in his heifers, Fournier said. “They also learn the social order at a young age and that takes a lot of stress off the animal.

The 50-by-80 foot barn has 1,500 square feet for animals, or about 100 square feet per animal. “That’s the bare minimum,” Fournier said. “That’s where most people get into trouble – it’s because they have way too many animals for the facility.”

He’d considered a composting pack, but his supply of sawdust is unreliable. “If you don’t have sawdust, you’re in a mess,” he said. Fournier beds twice weekly over a sawdust base, with straw chopped in a used REM straw processor. “Full-length straw gives more porosity, but chopped is easier,” he said. “You have to make it easy to do or it’s not going to get done.”

Thinking about a pack barn?

Consider these points:

• construction. A bedded pack barn costs roughly the same per square foot as a freestall, Gilbert said. A hoop barn with feed and scrape alleys will cost between $600 and $1,700/head, depending on whether you use your own labor and materials.

The Natural Resources Conservation Service or your state may help fund a pack barn because of its environmental benefits.

Aim for 70 to 100 square feet per animal. Design the pack to run the length of the barn, giving animals access from the long side. Build a low wall that keeps the pack level and limits access to several openings.  “If cows can walk the whole open face, it becomes a ramp and they trample the pack; they don’t get a place to lie down,” Gilbert said. Feed and scrape alleys keep waterers off the pack and provide some raw manure for fields. Good ventilation is essential because the pack is a manure storage facility. Fans help dry out the pack and keep odors down.

• bedding materials. Compared to a freestall system, you’ll save money on manure handling, but spend more on bedding, since a bedded pack requires three to five times as much as a freestall. Endres estimates bedding costs at 60¢-80¢/cow daily.

Don’t skimp. “Even though bedding is expensive, don’t reduce the amount, because managing pack moisture is the most important thing you do,” Gilbert said. Use at least 10 lbs. of bedding per animal daily. Gilbert estimates a cost of $1.20/head, bedding at 15 lbs. per day ($15/yard for sawdust).

Sawdust, hay, straw, bark and wood chips – as long as they come from a well-maintained chipper so they don’t have splinters – can be used in a deep bedded pack. Sawdust, wood shavings or ground cornstalks are best for a composting pack, which needs carbon and nitrogen, plus bulk to allow air flow. Chopped hay and straw build up a mat that’s tough to till. The pack should be tilled twice a day down at least 10 to 12 inches, Gilbert said.

Turning the composting pack aerates and dries it out and can reduce the amount of bedding you need by 20 to 30%.

Other money-saving ideas:

• use the pack just half the year, with animals on pasture the remainder.

• grow your own bedding material.

•  sell composted bedding to offset costs.

• build the pack with a separate feed alley. Animals excrete more when feeding, so less bedding will be required, but you may need a liquid manure system for handling feed-alley manure.

Endres has been studying corn cobs, woodchip fines and soybean straw as bedding. She said they will work as well, although excellent management is critical.

The labor involved in cleaning out the barn once or twice year depends on what you do with the manure. The producer in the Cornell study took 160 hours to remove manure and spread it in a compost pile. It took Fournier just four hours to clean his barn out with a skid-steer, excavator and dumptruck, and then pile it. “So from a labor standpoint, it’s a lot more efficient than a liquid system,” he said.

• compost as soil amendment.

Manure from a bedded pack can increase the microbial population and organic matter in the soil.  But although the term used is “composting barn,” further composting is probably necessary to raise temperatures enough to kill pathogens sufficiently.

Temperatures in noncomposting packs run 80° to 100° F; in composting packs, they reach up to 110° F. But compost should reach at least 130° F for mature composting.

Compost loses about 20% of its nitrogen in the field the first year, vs. 90% from a liquid manure in which N is highly available. “So it takes some patience and planning to get payback. You may want to save some liquid manure to provide the flush of N in spring,” Gilbert said.


Survey: Dairy facilities

In preparation for the January 2010 editions of Western DairyBusiness (WDB) and Eastern DairyBusiness (EDB), editors surveyed dairy producers on their 2010 dairy facility plans. Among the highlights:

WDB survey respondent herd sizes ranged from 150-3,000 cows. About 75% said they would change or make improvements to dairy facilities in 2010. Transition, maternity, hospital/treatment areas and heifer facilities will be targeted, with parlor, cattle resting, feeding and lanes/holding areas also getting some attention.

Cows come first. Although productivity and efficiency were cited, efforts  to improve herd health and reduce cow stress were cited as the primary reason for facilities’ investment. Of course, improving health and reducing stress should add to productivity. WDB respondents are equally split between building new and retrofitting facilities.

• EDB survey respondent herd sizes ranged from 110-560 cows. About 83% said they would address dairy facilities in 2010. This region has seen a lot of investment in transition cow facilities in the past decade. If facilities’ investment is an indicator, more producers will be bringing heifer-raising enterprises back home: replacement heifer facilities will get the greatest attention in 2010. Calf, cow resting and feeding areas addressed to a lesser extent.

Facilities getting worn out. Improving herd health and reducing cow stress were cited as reasons for facilities’ investment in 2010, but the majority of EDB respondents said existing facilities are outdated or worn out. EDB respondents are more likely to retrofit.

Read about it

When it comes to what they want to read about, WDB respondents cited ventilation and calf/heifer facilities; EDB readers cited cow comfort and cattle resting topics, with keen interest in bedded pack areas.

Congratulations to Lynda Foster, dairy producer from Fort Scott, Kan., who was drawn as the winner of the $100 VISA gift card from all those completing the online survey.


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