Archive for March, 2010

Ag groups weigh in on Supreme Court case for biotech alfalfa

WASHINGTON, D.C., March 9, 2010– The U.S. Supreme Court will decide whether a lower court acted hastily and incorrectly by banning the cultivation of biotech alfalfa despite extensive scientific evidence documenting the safety of the crop.  A coalition of agricultural organizations filed on March 8 a joint friend-of-the-court brief to the Supreme Court in support of the petitioners in “Monsanto Co. v. Geertson Seed Farms.”

The brief was submitted by the American Farm Bureau Federation, Biotechnology Industry Organization, American Seed Trade Association, American Soybean Association, National Alfalfa and Forage Alliance, National Association of Wheat Growers, National Cotton Council and National Potato Council.

The groups urge that the lower courts’ decision to approve an injunction without adequately hearing the key evidence must be reversed “to protect the farmers who choose to grow genetically-engineered crops, as well as the public benefits that agricultural biotechnology brings to producers and consumers around the world.”

In the lower court case, environmental groups and individual organic alfalfa farmers sued USDA, claiming that USDA’s decision to grant deregulated status to glyphosate-tolerant (or “Roundup Ready®”) alfalfa violated the National Environmental Policy Act.

The courts in the Ninth Circuit determined that USDA should have done an environmental impact statement (EIS) before it decided to deregulate, and the court ultimately enjoined almost all planting and sale of Roundup Ready® alfalfa pending the issuance of the EIS.

The lower court’s injunction against biotech alfalfa, however, was made without the court conducting a thorough review of evidence that precluded a finding of irreparable harm, according to the brief. In addition, the brief explains that the lower courts failed to consider the public benefits of agricultural biotechnology, which already is adopted widely in the United States for a number of key crops such as corn, soybeans, cotton, sugar beets, and papaya.

In 2005, USDA’S Animal and Plant Health Inspection Service (APHIS) concluded that there is no significant impact on the human environment due to granting non-regulated status to Roundup Ready® alfalfa.  Following the lower court’s ruling, APHIS completed a 1,400-page document as its draft EIS, and again has recommended that Roundup Ready® alfalfa be deregulated and that farmers be allowed to grow it.

This case  will be the first time the high court has weighed in on the risks of genetically engineered crops.  Of the more than 10,000 cases appealed to the Supreme Court each year, only about 1% is accepted for review on the merits and oral arguments.  This matter is scheduled for oral argument on April 27.  A decision is expected by June.

Sustainability, animal welfare issues highlight NEDPA Conference

By Susan Harlow

The Northeast Dairy Producers (NEDPA) Conference, held March 3-4, in Liverpool, N.Y., focused on the issues of sustainability and animal welfare. The bi-annual meeting drew 550 participants from the Northeast.

NEDPA’s board of directors presented a set of guidelines for members and other dairy organizations to consider. The standards, developed by NEDPA and Cornell’s PRO-DAIRY, were instigated by n animal-rights group’s undercover video at New York’s Willet Dairy. They cover methods for dehorning, tail docking and handling downed animals.

Decisions about whether to dehorn and/or dock tails should be left up to individual producers, NEDPA said in its guidelines.

NEDPA member Dale Mattoon said NEDPA will be putting even more effort into the animal welfare debate. “It’s not that hard a fight to win, because it’s a believable story and we’re believable people,” he said. “The problem is getting it out to the masses, and you’ll see that happens.”

Dr. Candace Croney, associate professor in animal behavior and bioethics at Ohio State University, (right) chats with the audience after her talk.

Candace Croney, associate professor in animal behavior and bioethics at Ohio State University, outlined society’s changing attitude and ethics towards animals. “The public assumes you’re meeting minimal care standards already,” Croney said. “Instead, people want to know if you care about your animals’ quality of life. So what is ‘quality of life’ for a dairy cow? You need to be able to answer that.”

Animal welfare standards must be based on science, she said. But the dairy industry must also take into account public values, since science isn’t necessarily driving current efforts to regulate animal care. Laws mandating space for laying hens, for instance, vary from state to state.

Croney said dairy must use education and communication to face the issue, and the industry must be honest and transparent about how it cares for animals.

Dehorning, tail docking, cow longevity, separating cows and calves and access to pasture are some of the current and future animal welfare issues dairy faces, said Marina von Keyserlingk, associate professor and research chair in animal welfare at the University of British Columbia. She urged dairy to pick its battles – scientific studies don’t support the need to dock tails, but they do justify practices such as dehorning and cow/calf separation, for health and safety reasons, she said.

Marina von Keyserlingk, associate professor and research chair in animal welfare at the University of British Columbia, talks with NEDPA members.

Housing is a large part of animal welfare. “To improve dairy cow housing, we must accommodate feeding and resting behavior,” said Nigel Cook of the University of Wisconsin-Madison. That includes:

• Stall surfaces that allow cows to rest comfortably, and rise and lie down easily. His studies showed that sand reduced lameness by 42% over mattresses.

• Stalls of sufficient size, especially for transition and older, larger cows.

•  Minimizing time in stall lock-ups.

EPA, market updates

Curt Gooch, senior Extension associate with Cornell’s PRO-DARY, filled NEDPA in on the progress of the U.S. Environmental Protection Agency’s (EPA) National Air Emissions Study. Monitoring of dairy sites in five states has concluded and the final report is due to EPA on May 1. Then EPA has 18 months to develop emissions-estimating methodology and, by 2012, come up with a  tool that producers can use to estimate and report any emissions.

Large CAFOs that signed a consent agreement with EPA, which protects them from enforcement of Clean Air Act violations while the study is underway, should be aware of the dates when their agreements end next year, Gooch said.

Ken Bailey, former dairy economist at Penn State and now a risk management consultant with INTL/FC Stone in Chicago, said he is optimistic about milk prices this year. “There are a lot fewer cows than a year ago,” he said. “Meanwhile, Asia is growing rapidly. By the time summer hits, you’re going to see this market turn around quickly.” Producers should lock in prices when they start to see an upturn, Bailey said.

Sexed semen has had little effect on milk prices thus far,  but may have more impact in the future, said Albert de Vries of the University of Florida’s Department of Animal Sciences. The technology has put 156,00 extra heifers onto farms this year; that will rise to an extra 237,000 in 2012, he said. A total of 722,000 added heifers are projected to calve between 2008 and 2012, he said.

Conneman, Jensen honored

George Mueller of NEDPA congratulates Dr. George Conneman (right) on receiving the Richard Popp Award.

The Richard Popp Memorial Leadership Award was presented to Dr. George Conneman, a faculty member in Cornell’s Department of Applied Economics and Management from 1956 to 2001. He taught graduate and undergraduate courses in farm business management and real estate appraisal. Conneman was associate dean for 13 of those years. He was faculty director of the NY FarmNet program and helped initiate the program that would become FarmLink.

In 2003, Conneman and his wife, Diane Knack, former director of LEAD, New York (Empire State Food and Agriculture Leadership Institute), received the Distinguished Service to Agriculture Citation of the New York State Agriculture Society.

The Richard Popp Undergraduate Scholarship Award was presented to Don Jensen III.


Marketing: Strategy #1 — Buying corn

by MATT MATTKE

Selling Futures Against Bought Corn

Corn feed buying agreements should be simple, flexible and give both parties greater control over the price paid or received. One simple feed contract for both the dairy producer and corn grower is a “pick your price” contract. The corn grower simply decides when he wants to lock in his sales price with the dairy producer. Depending on the time of year and the corn grower’s market savviness, that time could be an ideal buying opportunity for the dairy producer, or it could be the most inopportune time.

Example

The following example assumes the corn grower picks a very inopportune time for the dairy producer to buy corn.

Suppose the corn grower decides to sell 30,000 bushels of corn to the dairy producer at $4.50/bushel. It is April, seasonally a stronger month for corn prices.

The dairy producer believes a better buying opportunity will come in a few months, so he wants to neutralize that $4.50/bushel  purchase price and be positioned to lock in a lower purchase price if the market offers the opportunity.

Therefore, immediately upon agreeing to the $4.50/bushel purchase price with the corn grower, the dairy producer turns around and offsets that price by selling 6 futures contracts (5,000 bushels per contract) in his hedge account at $4.50/bushel off the December futures contract. By selling those futures contracts, the dairy producer has reopened his opportunity to capitalize on lower corn prices. However, this also means he has simultaneously reopened his risk to have to pay higher corn prices. Ultimately, the dairy producer is back to taking the open market price until the futures contracts are exited.

In the table below, the first column shows a scenario where the corn price drops to $2.00/bushel. Under that scenario, the dairy producer capitalized on $2.50 of additional downside opportunity by having the sold futures in place. The sold futures netted him $2.50/bushel and, by subtracting that gain off the $4.50/bushel cash price established by the grower, yields a final purchase price of $2.00/bushel (not including commissions and fees from placing the hedges).

The last column of the table shows a scenario where the corn price explodes to $8.00/bushel. Under that scenario, the dairy producer realized $3.50 of upside risk by having the sold futures in place. The sold futures netted him a net loss of $3.50/bushel, and by adding that loss to the $4.50/bushel cash price, yields a final purchase price of $8.00/bushel (not including commissions and fees from placing the hedges).

The other two examples shown in the middle columns of the table show a more modest price appreciation scenario and a more modest price decline scenario.

Bottom line, the table illustrates that by selling futures against a purchase price established by the corn grower, the dairy producer is ultimately back to taking the market price until the sold futures are exited. Whatever price the sold futures are exited at is the final price paid by the dairy producer for those 30,000 bushels of corn (not including commissions and fees from placing the hedges).

Disadvantages

The disadvantage of selling futures contracts against cash purchased corn is the futures remove the ceiling price established by the cash purchase contract. The other disadvantage is having to finance any margin calls generated by the sold futures contracts in the event the corn price goes higher.

Advantages

The advantage of selling futures contracts is the flexibility it gives the dairy producer to manage his price risk on that corn, while still maintaining a contract with the grower for the physical bushels. The other advantage is the dairy producer is providing the corn grower the same type of pricing mechanism he could get at the local elevator. For many corn growers, having the ability to set his sales price with the dairy producer may make the dairy producer a more attractive market to go to than the elevator.

The next article will cover the strategy of buying cash corn and protecting that feed purchase with a fence position.

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.

Table 1. Corn price direction scenarios and impact on price dairy producer pays for corn ($/bushel)

What if the corn price goes to:            $2.00         $4.00             $6.00               $8.00

Price of sold futures contracts:           $4.50          $4.50             $4.50               $4.50

Gain or loss of sold futures**:              $2.50          $0.50            ($1.50)            ($3.50)

Price locked in with corn grower:       $4.50          $4.50             $4.50              $4.50

Final price locked in

after sold futures gains or losses

($4.50 minus gain or loss)**:               $2.00           $4.00             $6.00              $8.00

** Commissions and fees with placing the futures trades is not included in these examples, but must be factored into final gain and/or loss of sold futures positions

Feeding & Nutrition: In search of a ‘greener’ cow

Researchers look to omega-3 fatty acids to reduce methane emissions and make healthier milk.

By Susan Harlow

Dairy cow nutrition was once a matter of feeding for higher milk yield and cow health. But recently, feed management has taken on wider significance, as we learn more about how it affects the environment and human health. A cow’s diet ends up both in the environment and in the milk bottle, one way or another.

Stonyfield Farm of Londonderry, N.H., long concerned about its environmental impact, has for the last decade sought to reduce the carbon footprint of milk production – its largest contributor of greenhouse gases. The toughest part has been dealing with enteric emissions, or the methane from a cow’s digestion. So when Stonyfield learned how Group Danone, the French company which holds a large share in Stonyfield, uses dairy nutrition to reduce its greenhouse emissions, the U.S. company began a similar pilot program, calling it “The Greener Cow.”

Pasture is the best way to feed that greener cow. A diet rich in natural omega-3 fatty acid sources such as grass, alfalfa and flax rebalances a cow’s rumen, so she gives off less methane, explained Nancy Hirshberg, Stonyfield’s vice president for natural resources. In addition, omega-3 provides many benefits for human health, as anyone who walks down a supermarket aisle knows today.

But even if they’re pastured, most Northeast and Midwest dairy cows eat a ration heavy in corn and soy during the winter. One of Stonyfield’s goals is to find a diet that will maintain the omega-3 benefits of pasture year-round.

Pilot project

Its pilot project, started 18 months ago, comprises 15 Vermont dairies, divided into three groups. During the last two winters, one group fed rations with 6 lbs. of flaxmeal; another group, 3 lbs. of TradiLin, flaxseed that’s undergone a patented extrusion process; and the third, a control ration.

A trial by French researchers Y. Chilliard, M. Martin, et al, published in the Journal of Dairy Science last fall, found that extruded flaxseed can change fatty acid composition and decrease methane per kilogram of milk by as much as one-third, said Stonyfield.

Preliminary results of Stonyfield’s study found an average 12% reduction in methane emissions on the dairies feeding flax. But it also found that omega-3s in the milk increased by 29%, while the ratio of omega-6 to omega-3 was lowered, a ratio considered a key to human health.

However, TradiLin is currently only processed in Europe, by the French company Valorex SAS, so is a costly alternative.

“The big unknown is how to make it work economically for every farm that wants to adopt it,” Hirshberg said.

Final numbers from the pilot project won’t be available until spring, but Guy Choiniere said he’s happy with results on his dairy. He dairies with his family in Highgate Center, Vt., and had his farm certified organic in 2005.

Choiniere, whose herd is on pasture from May 15 to October 15, said grass can’t be beat for feed, as long as it’s well-managed.

“Just because they’re on grass doesn’t mean you’ll have the same profile,” he said. “You have to manage grazing to have it be high in omega-3.”

But Choiniere is looking for a feed on which his cows will do as well for the seven months they’re in the barn as they do on pasture.

Before joining Stonyfield Farm’s project, Choiniere knew that grass-fed cows produce fewer methane emissions. So it didn’t surprise him that Stonyfield’s analysis showed his 75-head herd cut emissions by 25% after eating a ration high in omega-3 for three months last spring before they went out to pasture. In his second winter of the trial, Choiniere said he’s seen the same benefits he saw last year – improved appetite and better overall “attitude” – after bringing his cows in from fall pasture.

Over the last five years, Choiniere has cut back grain from 25 lbs. per cow to 12 lbs. For the study, he replaced 2 lbs. of cornmeal in their diet with 2 lbs. of the processed flaxseed. “Higher omega-3s are more friendly to the (cow’s) gut, so it’s operating more efficiently,” he said. “When you get a tractor operating efficiently, you’re going to get less fumes coming out of the muffler.”

He manages his herd for high fall production, yet didn’t see the usual spring fall-off in milk production.

“It brought my cows to a summer level,” he said. “Grass takes all your problems away, and I saw those improvements in the winter. And the manure texture changed – I saw grass texture in the winter. They had improved appetite and cud chewing. And the hair coat – all of a sudden, a shine came over them. Those are the visuals that I could see.”

Choiniere said his herd has maintained its milk production, settling around 57 lbs. per cow after a high of 58 lbs. in December.

Components are a different story. Although protein has stayed the same, butterfat levels dropped from about 4% before feeding processed flaxseed to 3.8% now.

Drawbacks

Milk fat depression may be one of several drawbacks. While research has found feeding flaxseed does lower methane emissions, there are some risks involved. Depending on the amount of flaxseed fed and the method of processing, it could decrease milk production, milk components and feed digestibility.

So this approach is not without controversy. Is omega-6 that bad? Is omega-3 that good? If so, how can the omega-3 content of milk be increased?

Altering the ration is just one method of lowering methane emissions on dairy farms. Using fatty acid sources to achieve nutritional and environmental results isn’t cut and dried, since it involves many interlocking factors.

One approach to cutting back on methane emissions, on a per-pound-of-milk-produced basis, is feeding and managing cows for higher levels of milk production, indicates Larry Chase, a Cornell University professor of animal science. At the 2008 Mitigating Air Emissions for Animal Feeding Operations conference, he listed a number of other factors that could be used to lower methane emissions. These included genetics, recombinant bovine somatotropin, higher quality forages, altering rumen fermentation with monensin, and adding fat sources, such as flaxseed or fish oil, to rations.

Bauman skeptical

Dale Bauman, Cornell’s Liberty Hyde Bailey professor and a leader in research to extend the field of dairy nutrition beyond the cow to the environment and consumers themselves, takes issue with Stonyfield’s claim that boosting omega-3 amounts in milk is a step forward. The amount of omega-3 fatty acid in milk fat in the first place is so small that the increase due to feeding oilseeds would not represent a meaningful contribution to human requirements, he said.

He also says the form of omega-3 fatty acid – alpha-linolenic acid – that is affected by feeding these particular oilseeds is a type of little use to humans, because they can’t convert enough of it to the useful long chain omega-3 fatty acids.

One of Bauman’s research goals is find out how to increase the milk fat content of the valuable long-chain omega-3 fatty acids, as well as conjugated linoleic acid (CLA), another fatty acid with health benefits. But that is difficult to do without causing milk fat depression.

“Our work has focused on supplying the polyunsaturated fatty acid precursors for rumen bacteria, while minimizing the shift in rumen fermentation associated with the decreased diet digestibility and milk fat depression,” he said. “To date, we have not found a way, when corn-based diets are used, that consistently increases CLA while mitigating the milk fat depression risk.”

Whatever the path, the goal is worth working toward, said Charlie Sniffen of Fencrest LLC, former ruminant nutritionist for W.H. Miner Agricultural Research Institute, Chazy, N.Y. “Anything we can do to have a smaller footprint and increase energy efficiency, let’s do it.”

In addition, the human health angle can only help dairy producers.

“It’s becoming obvious that there’s an opportunity for niche marketing by creating the right kind of fatty acids in milk,” Sniffen said. “Other countries are farther advanced. In the Asian market, there’s a huge interest to the omega-3 approach. They’re working hard to develop products to enhance omega-3 concentration in milk.

“So it’s going to happen, no doubt about it,” he continued. “Part of the marketing work has already been done for us by the egg producers; now we, dairy, have to deliver.”

Big appetites

One tool that’s helped Guy Choiniere feed his herd profitably is a robotic round bale feeder that moves automatically along the feed manger of his tiestall barn. “That’s increased dry matter intake by 30% because it stimulates appetite through one bite at a time,” Choiniere says. “There’s no slug feeding – they’re always aggressive, always hungry. They don’t like to see it go by without taking a bite.” The feeder helped him replace 10 lbs. of grain with forage.

And Choiniere hasn’t bought any protein concentrate in the last five years. “Once you realize that a cow only needs 17% to 18% protein, as long as you can make high-quality feed, only high-energy grain is needed,” he said.

High-quality feed starts with the soil, he said. Feed the soil well and your cows will eat well. That means making sure soil micro-organisms get four essentials: air, water, organic matter and minerals.

Choiniere raises his hay and stores it in Ag Bags, on 150 acres on a nearby farm. Four years ago, he seeded those acres to 30% legumes – clovers and alfalfa, and the rest to a mixture of grasses, mainly tall fescue. He applied manure heavily that first year. He uses a refractometer to measure sugar levels in the grass to decide when to harvest.

Hay yields went from about 2 tons per acre to 4 to 5 tons, with no added manure applications. Now he’s turned his attention to reclaiming played-out pastures on the home farm, filling in with clay and aerating the soil down about 8 inches, followed by a heavy manure application.


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