Archive for January, 2010

People Power: Supervision

If it’s not rocket science, why is it so difficult?

by Robert Milligan

When it comes to supervision, management and leadership, I have heard the following many times:

• “This is not rocket science.”

• “It seems easy.”

• “This is just common sense.”

Given these statements, it should be easy to be an outstanding supervisor, manager or leader. Obviously (and unfortunately) this is not the case. Great managers, supervisors and leaders are rare and, in most cases, have worked very hard to become outstanding.

Although supervision seems like it should be easy, implementing necessary skills, principles and processes to be a great supervisor does not come naturally – at least for most of us. Rather, to be successful, we must do two things: 1) change the way we think; and 2) change the way we behave/act.

Until the Industrial Revolution in the mid 1800s, supervision as we think of it today did not exist. Over the next couple of centuries, what I call the control-focused approach to supervision evolved, primarily by doing what comes naturally and influenced by the circumstances, thinking and expectations of the times. What evolved has the following characteristics:

• Employees are viewed as costs

• The primary function of the supervisor is to tell employees what to do – to be a boss.

• The primary expectation of employees is to comply with what they are told.

• Supervision is primarily reactive.

In the last 50-plus years, emanating from Dr. W. Edward Deming and the quality movement, we have learned – and research has verified – that there is a far superior approach to supervising employees. This approach, called quality-focused, sounds “nice,” appears easy to implement and has proven to enhance workforce productivity, but it doesn’t always come naturally. It has the following characteristics:

• Employees are viewed as assets

• The primary supervisory role is to direct, teach, coach, support and encourage the employee to attain great performance and high job satisfaction – to be a coach.

• Employees respond to actions from the supervisor that are fair and develop trust; the supervisor/employee relationship is an interpersonal relationship.

• Effective supervisors are proactive in developing the relationship, the employee and addressing workplace issues.

Since most supervisors have little training, they use their natural instincts. This “default” approach typically falls somewhere between control-focused and quality-focused. However, in most cases it is closer to the control-focused approach, because two key aspects of the quality-focused approach are “unnatural”:

1) Partly because labor cost is on the expenses side of the income statement, it is difficult to view employees as assets rather than as costs. Investing the time required to build a trusting relationship, training and development to best utilize the talents of each employee sounds great, but is difficult to execute.

2) Our natural approach to supervision is to solve problems. However, not unlike our work with cows and crops, the greatest success comes from preventing and solving problems before they grow. This proactive approach is not natural for most of us.

Changing the way we think – recognizing employees as assets and the need for being proactive – is difficult. However, it’s actually the easy part. The difficult part is implementation, or having to change behavior.

Think about someone who has decided to eat “healthier” or get into an exercise routine. They have to change the way they behave. But like exercise or diet, changing supervision behavior can produce positive results.

The good news: Although learning to be a better supervisor is not easy, it is possible. It takes knowledge and, most importantly, practice.

FYI

Robert Milligan, senior consultant with Dairy Strategies LLC, can be reached via phone: 888-249-3244, ext. 255, e-mail: rmilligan@trsmith.com, or website: www.dairystrategies.com.


Conversations: Ask your nutritionist about direct-fed microbials

2010 is here and, given the economic fallout from 2009, hard decisions will need to be made on a number of dairy management fronts. As producers and their advisors meet in the conference room (or kitchen), herd nutrition may be one of the most debated and diverse conversations of all.

By Brad Clyburn

When management discussions with your dairy advisors get around to nutrition, feed additives will likely raise a number of questions. One nutrition conversation that should be on the table concerns direct-fed microbials (DFM). DFMs are getting a closer review, based on their reported benefits in both herd health and production. Since there’s no doubt saving money on veterinary bills and squeezing a few more pounds of milk out of each cow would help your bottom line, here are a few starter questions to explore.

1) What are DFMs?

The U.S. Food and Drug Administration (FDA) doesn’t allow the term “probiotics” to be used in our industry. For humans, you find probiotics in products you consume every day, such as yogurt and cheese. We broadly call these “beneficial bacteria,” since they contribute to good health and even some levels of immune response. However, there are also pathogenic (bad) bacteria that can negatively affect your health.

Your dairy herd is also exposed to both good and bad bacteria, and their health and performance could be also be compromised. Ask your nutritionist about how these bacteria may affect your cow’s health and performance, much like good and bad bacteria can affect your health.

2) What is the science behind DFMs? How do they work in the rumen?

A DFM is a beneficial bacteria that helps balance the intestinal microflora. In dairy cows, this specifically means managing the amount of lactic acid in the rumen. It’s well known that excess lactic acid in the rumen can contribute to health-related issues, such as acidosis. Certain DFMs have been proven to provide bacteria which consumes lactic acid, thereby helping provide a level of acidic control. Ask about other issues or challenges related to excess lactic acid in the rumen.

3) What benefits will I see by using DFMs?

Research proves that a continual feeding regimen of DFMs can have significant improvements in both health and production. Because the rumen is in better balance, the cow’s dry matter intake (DMI) can improve. The result of increased DMI is better health and production. In fact, research from Chr. Hansen Animal Health & Nutrition demonstrates 3-5 lbs. more milk, along with improvements in fat and protein yields. Ask to see data on this kind of performance, and discuss how improved DMI can positively affect cow health.

4) When should I consider using DFMs?

Continual feeding of DFMs in all groups is recommended, but since each operation is managed differently, you should discuss some of these common scenarios when a DFM can have the most impact:

• at birth. The intestinal tract of newborns is basically sterile, which provides the best opportunity for introducing the beneficial bacteria found in DFMs.

• during weaning or other diet change. At weaning, a young animal’s digestive system is not fully developed to efficiently change from milk to plant-based rations. Additionally, any time the forage changes, the cow’s rumen undergoes a period of stress as she adjusts to the new forage.

• during periods of stress. Handling, shipping, vaccination, weather changes and extremes, surgery and other situations can put stress on the animal, resulting in reduced appetite and feed intake and weight loss.

• after antibiotic therapy. Antibiotic treatment often lowers the number or growth of Lactobacillus and other beneficial microbes in the digestive tract. DFMs assist in replenishing these beneficial bacteria, resulting in a quicker return to a balanced intestinal microflora.

• daily feeding. Since many stressful situations can’t be anticipated, daily feeding is recommended as a preventive measure. DFMs have been shown to improve animal performance and health when included in the diet.

5) How do I select a brand?

By law, DFM product labels must indicate a cell count guarantee. Be sure to compare labels for this guaranteed analysis and investigate the packaging. Many products are shipped with live bacteria, but arrive on the farm dead because they were improperly packaged. Good packaging technology can keep bacteria alive without refrigeration. Discuss reputable manufacturers that:

• have a core competency in all aspects of microbiology, including the selecting, growing, harvesting and stabilizing of microbial cultures.

• have food-grade manufacturing facilities that follow FDA guidelines and practices.

• have highly concentrated and stable products that do not require refrigeration.

• meets all HACCP food safety criteria.

• guarantees the level of viable organisms.

• has conducted extensive university research to support product effectiveness.

FYI

Brad Clyburn, Ph.D., is Key Account Manager with Chr. Hansen Animal Health & Nutrition. Contact him via phone: 817-718-6996; e-mail: USBDC@chr-hansen.com or visit www.chr-hansen.com/animal-health


Marketing: The state of dairy marketing is psychological

By Matt Mattke

While markets are largely unpredictable, and each year is different from every other, there is an overall consistent emotional pattern – the continual transition between bullish euphoria and bearish despondency. This pattern holds true because market prices are driven by people, and people are, by nature, emotional. These emotions tend to lead to repetitive actions largely irrational at (and right after) market extremes. It is human emotion that causes blow-off market tops and capitulation bottoms.

Even though 2010 milk prices are much higher than the $9-$10/cwt. prices  seen for much of 2009, the overall psychological state of the market remains overly pessimistic. The “sold” side is becoming crowded. Producers are selling heavily in 2010, and bankers and advisors are recommending being heavily priced in 2010.

After the devastation 2009’s low milk prices caused to producers’ balance sheets – especially for producers who did not hedge any milk – it’s understandable the strong desire to eliminate uncertainty in future milk income. For producers who only received $11.30/cwt. for their milk in 2009, another round of $10 or even $12 milk, is not tolerable. So, we can’t argue against hedging milk at $15.50+ levels for 2010. That has been a historically good value.

We urge producers to protect their milk price in a manner that does not limit their ability to participate in higher prices on a substantial amount of their 2010 milk production. This is due to a number of technical and fundamental factors we believe are supportive for 2010 prices. But one of the biggest factors is we do not see the psychological and emotional characteristics present at market tops.

When markets top, people are not talking about how much cheese is in inventory or how many cows haven’t been culled yet. The talking points are quite to the contrary. When cheese inventories are falling 5%-10% below previous year levels, that’s when prices tend to top out. When inventories are growing 10%-17% above previous year levels, that’s when prices tend to bottom out. That seems counterintuitive, but it happens. Market turning points occur when expectations for the future change. If the market believes the fundamentals going forward are going to get better, prices will rise. When the market believes the fundamentals going forward are going to get worse, prices will fall.

There is no bullish euphoria at the moment. Bullish arguments remain scarce, with all the focus on the present and how much cheese is out there. The focus is not on the future and what fundamentals could be when 2010 gets here.

Everyone’s “A” game is on regarding hedging milk and, instead of the complacency being of prices falling apart, it seems a great deal of the complacency is of prices being able to go any higher.

We cannot guarantee prices are going to go higher. We do believe there is strong potential for 2010 prices to go higher, but it is not the main objective behind this article.

The objective is to increase your awareness of what the “herd mentality” is right now, and try and prevent major marketing mistakes we’ve seen in the past. That major mistake is getting aggressive in milk hedging right after a bear market, and then abandoning hedging right as the bull market is about quit.

When hedging your 2010 milk production, give yourself some flexibility to benefit if prices go higher. Focus on your weighted-average price for all of your production, and the implications any pricing decisions have on your bottom line. What is your weighted-average price if the market goes higher? What is your weighted-average price if the market goes lower?

While markets are largely unpredictable, and each year is different from every other, there is an overall consistent emotional pattern – the continual transition between bullish euphoria and bearish despondency. This pattern holds true because market prices are driven by people, and people are, by nature, emotional. These emotions tend to lead to repetitive actions largely irrational at (and right after) market extremes. It is human emotion that causes blow-off market tops and capitulation bottoms.

Even though 2010 milk prices are much higher than the $9-$10/cwt. prices  seen for much of 2009, the overall psychological state of the market remains overly pessimistic. The “sold” side is becoming crowded. Producers are selling heavily in 2010, and bankers and advisors are recommending being heavily priced in 2010.

After the devastation 2009’s low milk prices caused to producers’ balance sheets – especially for producers who did not hedge any milk – it’s understandable the strong desire to eliminate uncertainty in future milk income. For producers who only received $11.30/cwt. for their milk in 2009, another round of $10 or even $12 milk, is not tolerable. So, we can’t argue against hedging milk at $15.50+ levels for 2010. That has been a historically good value.

We urge producers to protect their milk price in a manner that does not limit their ability to participate in higher prices on a substantial amount of their 2010 milk production. This is due to a number of technical and fundamental factors we believe are supportive for 2010 prices. But one of the biggest factors is we do not see the psychological and emotional characteristics present at market tops.

When markets top, people are not talking about how much cheese is in inventory or how many cows haven’t been culled yet. The talking points are quite to the contrary. When cheese inventories are falling 5%-10% below previous year levels, that’s when prices tend to top out. When inventories are growing 10%-17% above previous year levels, that’s when prices tend to bottom out. That seems counterintuitive, but it happens. Market turning points occur when expectations for the future change. If the market believes the fundamentals going forward are going to get better, prices will rise. When the market believes the fundamentals going forward are going to get worse, prices will fall.

There is no bullish euphoria at the moment. Bullish arguments remain scarce, with all the focus on the present and how much cheese is out there. The focus is not on the future and what fundamentals could be when 2010 gets here.

Everyone’s “A” game is on regarding hedging milk and, instead of the complacency being of prices falling apart, it seems a great deal of the complacency is of prices being able to go any higher.

We cannot guarantee prices are going to go higher. We do believe there is strong potential for 2010 prices to go higher, but it is not the main objective behind this article.

The objective is to increase your awareness of what the “herd mentality” is right now, and try and prevent major marketing mistakes we’ve seen in the past. That major mistake is getting aggressive in milk hedging right after a bear market, and then abandoning hedging right as the bull market is about quit.

When hedging your 2010 milk production, give yourself some flexibility to benefit if prices go higher. Focus on your weighted-average price for all of your production, and the implications any pricing decisions have on your bottom line. What is your weighted-average price if the market goes higher? What is your weighted-average price if the market goes lower?

FYI

Matt Mattke, Market360® adviser at Stewart-Peterson, can be reached via e-mail: mmattke@stewart-peterson.com, phone: 800-334-9779 or visit www.stewart-peterson.com.


MANAGEMENT: Agility — Business Harmony

New song needed in a volatile business world

To keep your dairy business in tune, ‘harmonize’ strategic clarity and consistency with agility and resilience.

By Dave Natzke

C.K. Prahalad, University of Michigan Ross School of Business professor, writing in a BusinessWeek column titled, “In Volatile Times, Agility Rules,” suggested business managers must “harmonize” two critical capabilities: 1) strategic clarity and consistency; and 2) agility and resilience. What’s that mean for dairy in this volatile era?

Strategic clarity

“Many dairy farm families do not have a strategic vision embodied in a mission statement,” said Geoff Benson, professor emeritus in the Department of Ag & Resource Economics, North Carolina State University. “Organizations can handle extreme change only when they can address it within a clear strategic framework. Otherwise, they can only wait and react.”

Unfortunately, a strategic vision on many dairies either lacks clarity or is not based on fundamentals, Benson said.

“A strategic vision, operational efficiency and financial management are the keys, but I do not believe these are ‘givens’ in the sense that they are widely practiced in the dairy industry,” he explained. “Many dairy managers do not understand the basic economics of the dairy industry or, if they do, they don’t have a plan to cope with it. Many focus on production efficiency, which is important, but they too often ignore profitability as an over-arching management goal and in decision making. Some production practices may be efficient, but not profitable.

“Financial management is the weakest of the three,” Benson said. “Part of this is the lack of focus on profitability; part is the lack of a cash-flow management strategy to cope with volatility (and this is harder to do if you are not profitable) and net worth issues (building wealth, reducing debt as a goal, maintaining solvency and ensuring adequate collateral for credit.)”

“Other than working hard and producing as much milk as you could, not a lot has needed to be strategic on dairy farms in the past,” said Ken Bolton, University of Wisconsin-Extension Center for Dairy Profitability. “This has changed, and is something many producers struggle with greatly. We tend to understand that if doesn’t matter to the cow, it doesn’t matter. We must build our understanding that if it isn’t strategic to achieving our core mission, it doesn’t matter. Many producers may want to rethink their core mission of minimizing their income tax liability to one of building wealth. Some have the opportunity to change their way of life mission to one of producing profit. These are seismic cultural changes that do not come easily to any of us.”

Management categories

Wayne Weiland, regional business manager with Standard Dairy Consulting, categorizes overall dairy management into three categories – financial/business management, people management and cow management. For example, process control is a people management issue; marketing is a business management issue; and stocking density is an example of a cow management issue.

Strategic clarity falls under both people management and business management, Weiland explained.

“You need to have a clear strategy for the business, and you must be able to communicate that strategy to your employees, so they can help move the business in that strategic direction,” he said. “It empowers your employees when they know where the business is headed, and they make better minute-by-minute decisions that will be consistent with the overall strategic direction.”

Consistency

“Consistency is a people and cow management issue,” Weiland said. “Can we do things the same way, every day? Consistency is still what makes cows perform best. The old saying: ‘It’s better to be consistently wrong than inconsistently right’ is worth examining. If I have a dairy doing something consistently wrong, it’s much easier to identify and correct than if I have them doing it inconsistently right. Then it’s both tough to find the problem and difficult to correct.”

Management requires monitoring. To be resilient or agile in times of volatility, dairy managers need an evaluation process or system for dealing with change, said Mark Kinsel, president & CEO of Agricultural Information Management, Inc. That includes a crafted, proactive approach to dealing with changing conditions, not a reactive, “seat-of-the-pants” response. “Have contingency plans for changing condition,” Kinsel said. “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.”

Volatility necessitates change

Business volatility changes management needs and skills, warned Ron Curran, manager, market development, AgSource Cooperative Services.

“Whether people, processes or finances, the most important management area for managers to focus on is the area that is weakest today,” said Curran. “Become better educated, both formal education and informally, by keeping an open mind, travelling and soaking up knowledge wherever and whenever you can.”

Weiland agreed. Getting outside help or hiring people who match needs or bring specific skills may be necessary.

“If I’m a great financial manager, but can’t manage the day-to-day labor force, then I better find someone who is not just good, but great at doing this,” he said.

People, business skills

Most dairy farm managers are blessed with a great amount of technical intelligence in the areas of production, said Gregg Hadley, University of Wisconsin-River Falls/Extension assistant professor and farm management specialist.

“But most dairy farm managers could use more technical intelligence with regard to the business management aspects (processes, financial management, risk management, human resource management),” Hadley said. “To keep the management team and workforce motivated in these volatile conditions, managers might need to develop the emotional intelligence (understanding people and how they react) aspects of human resource management.”

Consistent performance requires a consistent message, added Alvaro Garcia, dairy science associate professor, South Dakota State University. Red flags might include asking milkers to do a thorough job with cow prep and udder stimulation, and later complaining about the time it takes to milk and the need to cut down labor costs; or asking employees to lower somatic cell counts, and then complaining when milkers use more gloves than normal.

Non-economic volatility

Adding to the need for agility is the fact economics is not the only volatile force facing the dairy business, said Jeffrey Bewley, animal scientist at the University of Kentucky.

“Dairy operations most likely to maintain their positions in the dairy industry are those that are the most resilient by being the most prepared to deal with change, uncertainty and the pressure of internal and external forces,” he explained.

“A resilient dairy develops creative solutions to dealing with change as the ‘rules of the game’ change,” Bewley continued. “Dairies will become increasingly more complex with increased consumer concerns for food safety, animal well-being and environmental impact. Resilient dairies take advantage of existing strengths, absorb system shocks and adapt to changes by taking advantage of the new opportunities they create. Striving for resilience may help you avoid the traps that occur when the dairy is viewed as a constant, unchanging system.”

2009: A HARD LESSON IN ‘BREAK-EVEN’


One of the dairy management lessons of 2009 may be a greater awareness of “break-even” milk prices – because so many producers were looking “up” at them.

“There are many more people that know their break-even point today than did two years ago,” said Wayne Weiland, regional business manager for Standard Dairy Consulting. “Back then it was an exercise conducted by the most savvy business-minded owners who were really looking at margins and maximizing their return on capital and profit on a total system/business basis. Now, almost everyone knows where the break-even is, because almost everyone was operating below the water line and had to come up with ways to inject capital into the business – by borrowing more or eating equity.

“This became more visible (at 2009 milk prices), since it was more of a checkbook balance issue: ‘Do I have enough money to pay the bills?’ When you don’t, it’s clear that the break-even is above $10/cwt. I heard comments like: ‘If we could just get back to $13/cwt. milk, at least I wouldn’t be losing money every day.” That tells me they know their break-even is $13/cwt., even though they may not have done the mathematical calculations,” Weiland concluded.

Even greater awareness is needed, advised Gregg Hadley, assistant professor and farm management specialist at the University of Wisconsin-River Falls and UW Center for Dairy Profitability.

“The increase in market volatility has increased the awareness of break-even and other cost-of-production concepts,” Hadley said. “But in order to understand one’s break-even, you need good accounting. Most farm accounting is done with tax management in mind. This type of accounting is largely cash transaction-based.

“Dairy farm managers need to understand how profitable their operations really are, and this requires accrual accounting techniques,” Hadley continued. “Furthermore, in order to get farm managers financial information they can really use, less emphasis needs to be placed on financial accounting (records for external use) and more emphasis needs to placed on managerial accounting (records for internal use).

“Once the accounting is in order, the manager needs expertise to analyze the records,” he said. “If the dairy manager isn’t willing to invest the time to develop this skill, he or she needs to make sure someone on either their external management team or internal management team can analyze the records and make practical recommendations based on their analysis.”

Beyond milk prices, producers should also understand the break-even production level for cows in their herd, said Jeffrey Bewley, animal scientist at the University of Kentucky.

“When cows are not covering their variable expenses, other options (culling or drying off early) should be explored,” Bewley explained. “I think more producers were concerned about this number over the last year, but we still aren’t where we need to be. In the long run, producers may also need to understand the future profitability (net present value or retention payoff) of each individual cow to make more informed decisions about which cows should stay in the herd.”

Agility will mean …

“Agility is the ability to respond to system stresses or shocks in a timely manner. To achieve agility, dairy producers have to be prepared for these ‘disasters’ before they occur. In all likelihood, this will include more formalized decision making and participation in forward contracting options.”

Jeffrey Bewley, animal scientist,

University of Kentucky

“Marketing for a margin will now becomes important. Producers will leave money on the table at times, but will secure a profit even if it is not at the level desired. Understanding all of the numbers on the balance sheet and cash flow and how they reconcile together will be a must.

“Investments will have to be made in the areas that impact cow comfort, genetics and nutrition. Remember, a cow does not understand a checkbook. Building costs must be reevaluated, and we may find future economics will not support certain construction.”

Gary Sipiorski,  dairy development manager, Vita Plus

FYI

If you’d like to join the discussion or offer your own opinion, e-mail dnatzke@dairybusiness.com. Include ‘Dairy Agility’ in the subject line.

Facilities: ‘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.

FYI

For a print copy of Cornell’s Bedded Pack Management System Case Study, contact Kim Holden, Cornell Cooperative Extension of Delaware County, e-mail: kmh19@cornell.edu; or website:  www.aem.cornell.edu/outreach/extensionpdf/2009/Cornell_AEM_eb0916.pdf.

Information from the University of Minnesota Extension can be found at website: www.extension.umn.edu/dairy/management/compostbarns.htm.

Contact Highfields Institute, P.O. Box 503, Hardwick, VT 05843; phone: 802-472-5138; website: www.highfieldsinstitute.org.

Find Penn State information at website: http://marathon.uwex.edu/ag/modern/documents/DesignofBeddedPackHousing.pdf.

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.


Letters: January 2010

LETTERS

Producer/trucker conducts retail survey

After establishing a transportation company in 2009, I had the opportunity to survey retail milk marketing and prices in 17 states and 27 cities or towns during October 2009. Among my findings:

• Prices for 2% milk in one-gallon plastic jugs and/or glass containers ranged from a low of 99¢/gallon in Chicago, to $4.36/gallon in Shreveport, La. The average price was $2.94/gallon.

• The highest priced organic milk was $6.49/gallon, in Milwaukee, Wis.

• I found two common threads among milk offerings from producer-handlers: 1) their shelf space was limited; and 2) they offered products at prices below their competitors.

• Milk is being offered in a variety of flavors, including orange, banana-strawberry and root beer.

• In only three markets was “rbST-free” or “rbGH-free” labels noticeable.

• In many stores, large signs indicating milk prices were displayed prominently, drawing consumers to the dairy case.

• In three markets, gallon containers were offered in a two-for-one price scenario, with a 10¢-20¢ savings per gallon.

• Another notable sign offers “WIC-approved” milk. In Texas, the manager of an employee-owned grocery store chain explained that whole milk might not be available to WIC recipients due to concerns over obesity. He indicated it would not be a welcomed change.

• Country-of-origin signs were used in one store.

• Shelf space competition was most fierce in Kansas City, Mo., with seven brands represented. Iowa City, Iowa and Shreveport, La., each had six brands in competition for shelf space.

• Four markets offered all varieties (fat content) at the same price.

• A trend of skim milk being priced higher than milk containing fat has become more noticeable.

As a Holstein breeder, and with producers being paid on component values, what kind of cow do we breed for if skim is more valuable? How should you feed and manage? What should you be paid if your milk buyer processor/consumer is demanding these products? More or less?

Consumers have hundred of choices available when they shop. Food is such a value and plentiful. No one else along the chain would work or stand for the return on investment and human capital for the pleasure of being in this business. Dairymen and women need and deserve to get more of the retail dollar.

Mike Richter, Rich-Lane Farms

Highland, Illinois

richlane@papadocs.com

Vail article is required reading for employees

I loved your article on the Vail Brothers (“Beating the Benchmarks,” September 2009 issue ofEastern DairyBusiness, by Susan Harlow). It is required reading for our employees. What a wonderful example of frugality and steady growth. There is so much in this article that the struggling dairy farmers of our area should pay attention to. Two quotes stand out:

1) “You borrow money to buy cows, but you don’t borrow money for machinery without a darn good reason.”

2) Any efficiencies or success has to do with people who work together well. When they can work things out themselves, that’s just magic.”

Keep the good reporting coming.

George B. Mueller

Clifford Springs, N.Y.

Dairy-beef quality researchers noted

A November 2009 Eastern DairyBusiness article, titled “Premiums & Deductions: Dairies Have a ‘Steak’ in Cow Quality” failed to adequately attribute the work of lead investigators Jason Ahola, University of Idaho, Extension beef specialist, and Holly Foster, independent contractor, California Beef Council, Sacramento. For more information about their research, visit www.bqa.org.

FYI

To offer your own opinion or response, e-mail Dave Natzke, national editorial director,DairyBusiness Communications, e-mail: dnatzke@dairybusiness.com.


Editor’s Update: Tick, tick, tick

Let me take just a couple minutes of your time

By Dave Natzke

No matter what the milk price, equity position, interest rate or value of the U.S. dollar, we all share an equal amount of one “currency” as a new year gets underway – time.

I must confess I’m counting my “time” currency while in a bad mood. I sat through a rather unfruitful three-hour meeting last night, and just hung up on the fourth telemarketer (calling my business phone) in the past 24 hours. Taking time to go through the 150-200 e-mails I get a day, I’ve been invited to join yet another “social network.” (While I see the value in them, and confess to having urged you to look into participating in a social network as a means to connect with consumers, I’m coming to the conclusion they can be a big waste of time if not managed properly.)

It’s probably a good thing my wife isn’t home to see me much of the day, because I admit I probably cling to my “time” currency a little tightly. For example, at lunch, I defrost a frozen bagel for 19 seconds, because I don’t want to wait 20. While I’m waiting, I put mustard on the meat and cheese so it’s ready when the bagel is thawed. I use a paper towel so I don’t have to wash a plate. Silverware and sitting down slow intake.

A nap is quality use of time, but I probably wouldn’t eat or sleep if I didn’t need both, and a bladder collection device isn’t out of the question in the future if it would save me time during the waste disposal process.

Bartenders must have the “time” thing figured out. How else can you explain a two-hour “happy hour?”

I’m not against patience or procrastination – as long as I can do something with the time in between. I’m not against relaxation or recreation either. As of mid-December 2009, I have walked more than 1,500 miles per year for five consecutive years (7,700 miles). At about 12 minutes per mile, that’s a lot of time. But I can think and walk at the same time, and if I take my Blackberry, I can even check e-mails when the path is straight, or text some brilliant revelation back to my computer so I don’t forget it, and can write about it later.

Raised on a dairy farm, I’m an early riser. When I die, I hope it’s at night, so I wouldn’t have missed a good part of the day.

Time is my most valuable currency, because it is one of the few things I can spend as I want. Invested wisely, the return is great; invested unwisely, the costs are greater. Time adds a dimension to everything. Time is unlimited potential.

Time spent with family and friends, or in the act of learning or having “fun,” is to be cherished.

Maybe it’s because I’ve worked on publication “deadlines” for more than 30 years, but I value my time in every step of every process, and I recognize the value of yours. I appreciate the time you invest in reading this magazine, and I pledge to try to waste as little of our time together as possible in 2010.

Your day as a dairy producer is also probably measured and managed in terms of minutes, or, in the milking parlor, maybe even seconds. Every business decision you make and every conversation you have has a time/value element.

When seeking answers or direction in my own life, one of my dilemmas is I frequently don’t know the right questions to ask – until it’s too late. To that end, Eastern DairyBusiness launches a new column this month, titled “Conversations” (see page 27, “Ask your nutritionist about … direct-fed microbials.”

“Conversations” discusses dairy management areas/concepts in a non-commercial way, using industry experts. It is designed to increase or create openings for conversations about dairy management ideas between producers and advisors, and add value to those conversations. I hope to make this a regular feature in 2010.

Partly personal

Three of the brightest dairy people I know – and the most passionate and selfless for their dairies and industry – are being recognized by others:

• Laura Daniels, Cobb, Wis., was named the recipient of the 2009 Young Dairy Leaders Institute Distinguished Alumni Leader Award.

Liz Doornink, Baldwin, Wis., will be honored as Ag Woman of the Year at the inaugural AG CONNECT Expo, in Orlando, Fla.

• Carrol Campbell, Winfield, Kan., will be honored as the 2010 Outstanding Dairy Producer of the Year at World Ag Expo, in Tulare, Calif.

All three are members of American Farmers for the Advancement and Conservation of Technology (AFACT); Carrol and Liz are co-chairs. All three are also among the most humble people I know, so you probably won’t hear them talk about their well-deserved recognition. If you see them – undoubtedly working somewhere on dairy’s behalf – congratulate them, and say “thanks.” p

AT A GLANCE: NUMBERS

$400-$677

Average loss per cow during the first six months of 2009 in New Mexico and Idaho, respectively, according to Dairy Farm Operating Trends’ report, from the accounting firm of Moore Stephens Wurth Frazer and Torbet, LLP. Losses in California during the period ranged from $511/cow in Southern California to $647/cow in the San Joaquin Valley.

Six-month losses per cow reported by Pete Hoekstra, CPA and managing partner with Genske, Mulder & Co., LLP, in the January 2010 issue of  Western DairyBusiness magazine, averaged $400 in New Mexico; $402 in the Upper Midwest; $465 in the Lower Midwest; $477 in Washington; $502 in the Texas Panhandle; $535 in California; $594 in Arizona; and $607 in Idaho. Third-quarter projections add about $185 in the loss column in the Midwest and New Mexico; and about $225 in most Western states.

Harlow editorial earns ‘Cap Creal’ award

An editorial by Susan Harlow of Eastern DairyBusiness was chosen for a 2009 Harold L. “Cap Creal” Award from the New York State Agricultural Society. Harlow will receive the award at the society’s annual forum, Jan. 7, 2010, in Syracuse, N.Y. The editorial, titled “Gleaning Your Field,” ran in the December 2008 issue of Eastern DairyBusiness.

LETTERS

Producer/trucker conducts retail survey

After establishing a transportation company in 2009, I had the opportunity to survey retail milk marketing and prices in 17 states and 27 cities or towns during October 2009. Among my findings:

• Prices for 2% milk in one-gallon plastic jugs and/or glass containers ranged from a low of 99¢/gallon in Chicago, to $4.36/gallon in Shreveport, La. The average price was $2.94/gallon.

• The highest priced organic milk was $6.49/gallon, in Milwaukee, Wis.

• I found two common threads among milk offerings from producer-handlers: 1) their shelf space was limited; and 2) they offered products at prices below their competitors.

• Milk is being offered in a variety of flavors, including orange, banana-strawberry and root beer.

• In only three markets was “rbST-free” or “rbGH-free” labels noticeable.

• In many stores, large signs indicating milk prices were displayed prominently, drawing consumers to the dairy case.

• In three markets, gallon containers were offered in a two-for-one price scenario, with a 10¢-20¢ savings per gallon.

• Another notable sign offers “WIC-approved” milk. In Texas, the manager of an employee-owned grocery store chain explained that whole milk might not be available to WIC recipients due to concerns over obesity. He indicated it would not be a welcomed change.

• Country-of-origin signs were used in one store.

• Shelf space competition was most fierce in Kansas City, Mo., with seven brands represented. Iowa City, Iowa and Shreveport, La., each had six brands in competition for shelf space.

• Four markets offered all varieties (fat content) at the same price.

• A trend of skim milk being priced higher than milk containing fat has become more noticeable.

As a Holstein breeder, and with producers being paid on component values, what kind of cow do we breed for if skim is more valuable? How should you feed and manage? What should you be paid if your milk buyer processor/consumer is demanding these products? More or less?

Consumers have hundred of choices available when they shop. Food is such a value and plentiful. No one else along the chain would work or stand for the return on investment and human capital for the pleasure of being in this business. Dairymen and women need and deserve to get more of the retail dollar.

Mike Richter, Rich-Lane Farms

Highland, Illinois

richlane@papadocs.com

Vail article is required reading for employees

I loved your article on the Vail Brothers (“Beating the Benchmarks,” September 2009 issue of Eastern DairyBusiness, by Susan Harlow). It is required reading for our employees. What a wonderful example of frugality and steady growth. There is so much in this article that the struggling dairy farmers of our area should pay attention to. Two quotes stand out:

1) “You borrow money to buy cows, but you don’t borrow money for machinery without a darn good reason.”

2) Any efficiencies or success has to do with people who work together well. When they can work things out themselves, that’s just magic.”

Keep the good reporting coming.

George B. Mueller

Clifford Springs, N.Y.

Dairy-beef quality researchers noted

A November 2009 Eastern DairyBusiness article, titled “Premiums & Deductions: Dairies Have a ‘Steak’ in Cow Quality” failed to adequately attribute the work of lead investigators Jason Ahola, University of Idaho, Extension beef specialist, and Holly Foster, independent contractor, California Beef Council, Sacramento. For more information about their research, visit www.bqa.org.

FYI

To offer your own opinion or response, e-mail Dave Natzke, national editorial director, DairyBusiness Communications, e-mail: dnatzke@dairybusiness.com.

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