Archive for October, 2010

New Featherlite Lazer stock trailer now offered as bumper pull

Featherlite’s new ‘Lazer’ stock trailer is now available in a bumper pull configuration. The Lazer is built with aluminum sheets on the inside of the trailer’s structural posts instead of being welded to the outside of the posts. This creates a smooth, flush interior that is easier to clean. The Lazer bumper pull stock trailer is available in lengths of 12, 16 and 20 feet. It measures 7 feet wide and 6 feet, 6 inches high. The Lazer features a center gate with slider, curbside escape door and a skid-resistant, interlocking extruded aluminum floor. In addition, livestock are loaded through a full swing rear gate with lockable slider and air spaces that match the sides.

Lazer stock trailer owners can also choose from an array of options, including the new additional air space option, available on both gooseneck and bumper pull models of the Lazer. The option adds extra air spaces that run along the trailer just above the fenders, creating additional airflow into the trailer. Other options include eye-catching aluminum wheels, exterior lighting, additional center gate configurations, Featherlite’s patent-pending “Step Safe” center and rear gates and many more. For more information, call 800-800-1230 or visit www.fthr.com/tnews.

Sani-Bed II bedding additive helps reduce environmental mastitis

A&L Laboratories introduced Sani-Bed II, an animal bedding additive that quickly absorbs ammonia and dries bedding to inhibit bacterial growth.

A&L Laboratories introduced Sani-Bed II, an animal bedding additive that quickly absorbs ammonia and dries bedding to inhibit bacterial growth and reduce mastitis, environmentally caused lameness and fly problems. Sani-Bed II is chlorine-free and has a spreadable granular texture that is less dusty and penetrates bedding better than the original Sani-Bed. In addition, it comes in an upgraded easy-to-use and store box.

Compared with lime, faster acting Sani-Bed II absorbs more ammonia and moisture, and maintains antibacterial control for several days.

Use Sani-Bed II on mats and concrete stalls, plus in bed packing areas and calf hutches and pens. Using Sani-Bed II allows producers to benefit from the best of both organic and inorganic types of bedding: the comfort, low cost and recyclability of organic bedding, as well as the antibacterial benefit of inorganic beddings.

Sani-Bed II is also more cost effective than other treatments because the amount used and frequency of application is much less than lime or clay. And there is no equipment investment needed. For more  information, visit http://www.aandl-labs.com/agriculture_specialty_products.html.

Conversations: Ask your nutritionist about energy status at transition

Too frequently, transition cows show up in the ‘negative’ column due to metabolic disorders, production and reproduction problems. As producers and their advisors meet in the conference room (or kitchen), the conversation should focus on energy balance to help cows make a ‘positive’ transition.

By Ken Sanderson, D.V. M.

Every dairy cow experiences negative energy balance as she transitions from dry cow to lactation. Her lactation can be adversely impacted by the severity of the energy shortage. An energy shortage can affect peak milk, total milk and fertility. How quickly the cow recovers from negative energy balance, how quickly she returns to positive energy balance, is what matters. The faster the return, the better for milk production and reproduction.

1) Why does an energy shortage occur at calving?

The energy shortage occurs because a natural lag exists between the dairy cow’s need to generate large quantities of energy for milk production at calving and her ability to eat enough feed to meet this energy need. On a biological level, we know that how well the cow coordinates energy metabolism and glucose (energy) generation is a key determinate of milk, production and reproductive efficiency.

Ask your nutritionist for his/her opinion on the energy status of your herd.

2) Is all the cow’s energy truly produced in the liver?

Unlike monogastrics – poultry, pigs, etc. – the ruminant dairy cow absorbs very little energy though its gastro-intestinal (GI) wall. Instead, her liver plays a key role in coordinating energy metabolism. By that, I mean the production of glucose from 1) what we call gluconeogenic precursors, basically the various items that can be used to create glucose, and 2) from adipose tissue i.e. fat. Responsibility falls on the liver to coordinate the uptake of the various energy substrates, their metabolism and their export to body tissues. In early lactation, as the cow mobilizes body fat reserves for energy, there is a risk that fat will begin to accumulate in the liver. As fat accumulates, it becomes more challenging for the liver to efficiently coordinate energy production, and the tendency exists for the cow to favor the production of ketone bodies instead of glucose.

Ask your nutritionist to discuss ways of monitoring your herd for signs of problems with ketone body production as a result of fat accumulation in their livers.

3) What are signs of optimal liver function?

One of the obvious signs of optimal liver performance is the absence of metabolic problems. We know the vast majority of metabolic problems occur during the transition period. These would include clinical and subclinical ketosis, metritis, fatty liver, displaced abomasums and/or mastitis. If metabolic problems exist, the first step is to review herd management practices with your advisor(s). In an effort to understand the extent of metabolic challenge in the herd, nutritionists and veterinarians will run tests for non-esterified fatty acids (NEFA) pre-calving and beta hydroxy butyric acid (BHBA) post-calving. These tests provide good indicators as to whether or not the cow’s energy status is compromised by a build-up of fat in the liver.

Review with your nutritionist and veterinarian herd management practices to see if opportunities for improvement might exist.

4) How damaging is fat accumulation in the liver?

Well, even a small build-up of fat can decrease the liver’s metabolic functions and impact overall energy metabolism in early lactation. Liver fat accumulation generally is categorized as normal (<1% liver fat on a wet basis), mild (1-5%), moderate (5-10%) and severe (> 10%). With today’s genetic advancements for milk production, we know that virtually every cow faces energy challenges in early lactation. That means a mild-to-moderate level of fat accumulation is practically unavoidable. From industry surveys, we know approximately 50% of our commercial dairy cows have mild or moderate fatty livers, and many of these cows are struggling to manage to keep ketone body production (BHBA) at a safe level. Even if a cow has a mild level of liver fat build up, her ability to manage energy needs is significantly impaired.

Review with your nutritionist the history of metabolic problems – clinical and subclinical – on your dairy.

5) What can be done to protect the cow’s liver?

The first step is to make sure the basics of good herd management are in place. All cows should be well managed, comfortable and fed a well-formulated ration. Next, be sure an optimum level of rumen-protected choline is in the ration pre- and post-calving to ensure the transport of fat out of the liver, thereby avoiding the metabolic challenges related to poor liver function. Without rumen protection of the choline, little, if any, will reach the small intestine and be absorbed for use by the cow.

Ask your nutritionist about the use of a rumen-protected choline.

FYI

Ken Sanderson, D.V. M. is Global Manager of Technical Service & Business Development for Balchem. Contact him via phone: 845-326-5627; e-mail: KSanderson@Balchem.com.

Alfalfa grower seminar targets stem nematode infestations

Producer’s Choice Seed and Cal/West Seeds recently hosted a seminar to discuss the 2009 and 2010 stem nematode outbreaks in northern San Joaquin Valley, the Delta and lower Sacramento Valley.  It was noted that alfalfa growers have been hit the hardest with estimated losses of more than $50 million a year. Some growers have lost their entire alfalfa crops.

Why are we seeing such an increase in stem nematode infestations? Jon Reich, executive vice president of Cal/West Seeds, introduced a panel of nematode and alfalfa experts to discuss possible causes, symptoms of nematode outbreaks and what growers can do to curb increased infestations.

Watch for symptoms

Dan Putman, University of California, Davis, agricultural productivity and Extension agronomist, and Rachael Long, Farm Advisor in pest management and field crops, kicked off the seminar by giving an overview of the stem nematode problem in California and  symptoms growers should watch for: stunted and patchy growth, uneven crop height, circular stunted areas and yield reduction – all signs that you may have nematodes.

Another noticeable symptom called “white flagging” sometimes occurs when a stem nematode attacks the alfalfa host resulting in an albino stem. Don Miller, director of product development for Producer’s Choice Seed, uses white flags as indicators that a field may be infested. “While doing in-field alfalfa consultations, I can tell there are stem nematodes just by seeing white flags,” he says.

Another indicator to watch for is swollen crown buds. Stem nematodes attack the plant by injecting a digestive enzyme, then burrowing into the host causing swollen “tumors” to appear. Each tumor can contain thousands of stem nematodes. With a reproductive cycle of 300 eggs every 30 days, the damage can quickly destroy the host.

Soil sampling key

Internationally recognized expert nematologist, Saad Hafez, Extension professor of nematology, University of Idaho, discussed the biology of stem nematodes, soil and plant sampling methods and benefits of crop rotation for nematode control. Emphasizing the importance of soil sampling before planting, Hafez recommends, “Test when the soil’s moist, because nematodes are aquatic creatures. Dry soil may contain millions of eggs, but unless the soil is irrigated, you won’t find evidence of a nematode infestation.

Take 2-3 samples from the root zone per acre in a zigzag pattern.” He also recommends using crop rotation as a way to control harmful nematode populations. “When rotating out of alfalfa, plant a non-host crop, such as small grain, beans or corn, for 2-4 years to reduce the nematode population in the soil.”

Breeding resistant varieties

Dr. Miller talked about the advances being made in breeding nematode-resistant alfalfas, and the rating system used to label resistant strains. Cal/West Seeds has been working for 15 years developing improved strains of alfalfa that are far less susceptible to stem nematode damage.

Typically, it takes three generations of plant breeding to eliminate a susceptible gene, but steps forward are being made everyday creating hardier strains of alfalfa.

The current rating system for labeling a plant’s resistance is on a scale of 0% to 100% with 0% – 5% being classified as Susceptible (S), 6% – 15% being Low Resistance (LR), 16% – 30% Moderate (M), 31% – 50% being Resistant (R) and 51% and above being High Resistance (HR).

That means a grower facing infestations should choose a variety with at least an “R” or an “HR” rating for Stem Nematode, if past or current infestations have been severe in his county.

Needs improvement

One limitation of the rating system is that  an HR rating is any seed above 51% meaning you might get a seed performing at only 51% or as high as 100%. There’s no way of telling what you’re getting.

Miller addressed the concern stating, “I wouldn’t be opposed to a new rating system that more accurately represents the quality of seed in the HR category – possibly an additional category: “VHR” meaning Very High Resistance.”

This alfalfa grower seminar ended with a hands-on workshop held by Lei E of Cal/West Seeds and a tour of their research facilities and greenhouses. Attendees were given information and tips vital to combating the current stem nematode problem in their own fields. Program organizers hope that through continuing education they will see a more profitable 2011 for California alfalfa growers.

California/Arizona DairyBusiness: November 2010

Air, water deadlines loom

By Deanne Meyer

Livestock Waste Management Specialist

University of California, Davis

Fall is in the air and before we know it, winter will be here. This December there are potentially two sets of deliverables for dairymen in California’s Central Valley.

These deliverables apply to all dairies residing in the Central Valley Regional Water Quality Control District jurisdiction (Sacramento and San Joaquin Valleys) and to many dairies in the San Joaquin Valley Air Pollution Control District (San Joaquin to Kern Counties).

WATER:

At the April 24, 2009 Regional Water Board meeting, the board members delayed the need for producers to complete the Waste Management Plan by one year to July, 2010. Table 1 of the General Order was revised to change the due date for the status report on facility retrofitting completion as proposed by the Waste Management Plan (WMP) from July, 2010 to Dec. 31, 2010. The status report shall provide the status of facility retrofitting needed to implement the WMP. There are potentially three different areas in the WMP which may require retrofitting. This status report on facility retrofitting completion is due Dec. 31, 2010.

Items to include in the report:

• Modifications or improvements if the existing facility’s storage capacity is inadequate.

• Modifications or improvements if the existing facility’s flood protection does not meet the minimum requirements (protection from inundation of manured areas during flooding).

• Modifications or improvements if the existing facility’s design and construction criteria of the production area are insufficient.

If no modifications are required your report should indicate no modifications are required.

Any proposed modifications or improvements must be prepared by, or under the responsible charge of, and certified by a civil engineer who is registered according to California law, or other person as may be permitted under the provisions of the California Business and Professions Code, to assume responsible charge of such work. If modifications and improvements are being done, carefully read through the requirements in the General Order (pages B-4 through B-6).

The California Dairy Quality Assurance Program (CDQAP) is working closely with the regional board to have a template available for producers to use that will meet the regulatory requirements associated with this deliverable. It is anticipated that this document will be available at http://www.cdqa.org/binder.asp (Section 6 Document 23). For some producers, no modifications will be necessary. Yet, it is wise to submit documentation to the regional board indicating no modifications are needed.

It is very important for producers to carefully evaluate their storage capacity calculations. Were these made with a standard 90- or 120-days of winter storage? If so, you need to ask the question – does that agree with the information I have in my nutrient budget? If I need to store water until fields require nutrients, there is potentially a longer storage period required. Understand what you need for storage. Work with your agronomist to be sure that what was calculated in the Waste Management Plan will work in the crop side as well.

AIR:

Dec. 10, 2010 is the due date for permit applications for dairies with as few as 175 cows with the San Joaquin Air Pollution Control District (SJAPCD).  The SJAPCD sent out meeting announcements at the end of August identifying the changes resulting in smaller farms requiring permits.

The SJAPCD’s new source review rule (Rule 2201) was changed, resulting in a significant drop to the major source threshold. Now facilities with 5 tons/yr of NOx and VOC emissions have reached the permit threshold. There are various sources of equipment that contribute toward the 5 tons/yr of emissions including: stationary and portable irrigation pump engines, emergency engines, boilers, gasoline tanks, confined animals, etc. Mobile source emissions, such as tractors, harvesters, trucks, etc., are not counted toward the 5 tons/yr.

For more information see the flyer at the district website: www.valleyair.org/Workshops/postings/ 2010/09-21-10_AgWorkshops/Permitting%20Workshop%208-20-10.pdf

FYI

To contact Deanne Meyer, University of California, Davis, call 530-752-9391 or e-mail her at dmeyer@ucdavis.edu.


Be careful labeling this a ‘recovery’

Dairy Financial Times

By Matt Peterson

The time has come for a mid-year check-up. Our freshly released cost study covering the first six months of the year shows vast improvement over last year’s pain, but that, as many of you know, isn’t saying much. The existence of a positive bottom-line – something that many of us haven’t seen for more than a year – may cause an industry outsider to decide the shape of the dairy industry is back to normal. However, for producers, even with the year-to-date improvement, it is not back to life as it was prior to the damage of 2009.

A quick glance at out cost study indicates a majority of the gains made through the end of June stem from an increased milk price.  The $2.52 per cwt improvement represents an increase of about 20% over last year’s annualized price.  Another positive factor driving the rebound is the $0.95 per cwt reduction in total feed expenses.  Overall, the dairies used in our study have been able to drive down their average break-even point from $16.10 per cwt in 2009 to $14.80 per cwt.  Couple that with the average milk price of $14.92 per cwt and you might think the industry has experienced the much anticipated recovery.  Unfortunately, some market forecasts have projected elevated feed and fuel costs as we progress through the remaining months of 2010.  This places the gains experienced through cost reductions in peril of being washed away by year’s end.

One major item to remember in analyzing the cost study’s numbers is to remember what the net income on a profit and loss statement represents.  In short, that is the money made from operations that the producer uses to pay back debt and feed mouths, primarily their own.  A majority of our producers are not on salary and must rely on withdrawals from the business to pay for basic living expenses including self-employment and income taxes.  We generally estimate principal payments and living expenses of the typical producer to range from $1.00 to $1.50 per cwt.  After 2009, it is safe to use the high side of the estimate as producers are being pressured to use all available cash to decrease their elevated debt load.  In light of this, the $0.55 per cwt bottom-line on the cost study still leaves a shortfall.  A continual shortfall will force many to consider a voluntary exit strategy or be shutdown through foreclosure and bankruptcy.

In order to fully understand the impact of 2009 and see how feeble the current environment remains, it may be helpful to look at the first six months of 2010 through the lens of 2009.  Last year, our producers on average lost $641 per cow over the entire year.  On a monthly basis, that equates to $53 dollars per month.  Looking at the current year, only $58 per cow has been realized through six months.  So what took one month in 2009 to lose has taken almost a full six months in 2010 to recoup.  Put another way, at the current rate of progress, it will take about five and a half years to regain the entire $641 per cow that was lost in 2009.

Yes, we are seeing improvements and we are all thankful for the much needed relief.  Hope glimmers, but be cautious at labeling the improvements experienced thus far as a full-fledged recovery. At the current rate of progress, it will still take years to heal from the devastation of 2009.

FYI

Matt Peterson, CPA in Ontario, Calif., with Genske, Mulder & Co., LLP, a certified public accounting firm representing clients who produce 12% of the nation’s milk in 29 states. Matt can be reached at 909-483-2100 or e-mail him at matt@genskemulder.com

A simple solution: Name a Power of Attorney

It’s your money

By Verlyn de Wit

The following situations could have been resolved by a simple document. Can you guess what the common solution is?

You’re enjoying the African safari you’ve been planning for years. In addition to the incredible beauty, part of the allure is that you simply cannot be reached by phone, fax or any other means. But while your camera is bagging big game on the Serengeti, the “big one” just got away back home.  Like a lightning bolt out of a clear blue sky, developers have made a crazy offer on that hard-to-sell parcel of real estate. The buyer needs an answer today, or the offer evaporates. You are nowhere to be found, much less be in a position to sign documents.

Terri Schindler-Schaivo, a brain-damaged young woman from Florida was the focus of a costly decade-long legal battle that gained national attention and split her family. Her husband, who was her legal guardian, wanted to have his wife’s feeding tube removed, causing her to die by starvation and dehydration. Terri’s parents fought for her life. Everyone had a great deal to say, except Terri.

Everyone knows grandpa has been slipping a little but no one has had the courage to say the “A” word. Grandpa has always been a fiercely independent, cards-close-to-the-vest business man. Suddenly, his health takes a turn for the worse. The family decides its time to implement the massive gifting plan to his children, their spouses, his grandchildren and great-grandchildren that grandpa has talked about. The tax savings would be in six figures. But grandpa has lost the mental capacity to legally make such gifts, and the plan stalls.

Assuming that my readers’ intelligence is far above average, (and their mental capacity is beyond question) you’ve probably guessed that all of the crises above could have been resolved with an appropriate “power of attorney” (POA).

A POA is a legal instrument that is used to delegate legal authority to another person. The person who signs the POA is called the principal. The person who is empowered to make decisions or take actions on behalf of the principal is called the agent or attorney-in-fact.

While definitions vary from state to state, here’s a quick POA primer:

Nondurable (or Limited): takes effect immediately and is often limited to a specific transaction, like the closing on the sale of a residence, or handling business affairs of someone who is traveling. A nondurable POA remains in effect until it is revoked by the principal, or until the principal becomes mentally incompetent or dies.

Durable (or Blockbuster): enables the agent to act for the principal even after the principal is not mentally competent or physically able to make decisions. This power may remain in effect until the principal’s death.

Springing (or Standby): this type of POA becomes effective at a future time. Perhaps the POA “kicks in” or “springs up” when the principal becomes mentally incompetent or is otherwise unable to handle his/her affairs.  The principal’s physician is usually asked to determine if the principal is mentally competent.

Whether a POA is “nondurable,” “durable,” or “springing,” it can give an agent the legal power to do one or all of the following:

• Buy or sell real estate

• Manage property

• Conduct banking transactions

• Make health care decisions

• Invest money or liquidate investments

• Make gifts on your behalf

What happens without the POA? An opportunity may be lost, wishes are not carried out, or unnecessary expense is incurred.  Family members may be forced to petition the court to appoint a guardian and/or conservator to handle the incapacitated principal’s affairs.

It is important to note that state laws can vary widely in this area. Also, when it comes to health care you may want to go beyond a simple POA. A “living will” gives your physician specific instructions concerning which life-sustaining procedures you wish to have employed. A POA simply dumps the burden of decision in someone else’s lap who may not want to decide, or may not see things your way.

Do-it-yourselfers will find hundreds of websites that help you draft your own POW.  The mentally competent will ask for their attorney’s help.

FYI

■ Verlyn De Wit helps successful dairy producers make smart decisions about their money.  He can be reached toll-free at 1-888-468-1728 by e-mail at vdewit@sammonsrep.com or snail-mail at 1270 Eastside Dr., Sioux Center, IA  51250. Securities offered through Sammons Securities Co., LLC. 4261 Park Road, Ann Arbor, MI  48103. Member FINRA and SIPC.

■ Neither Western DairyBusiness nor Verlyn De Wit is qualified to offer legal or tax advice. Consult your attorney and/or tax professional for a qualified opinion regarding your personal situation.

Financial volatility: Experts study supply management

Editor’s note: The following article includes a summary of economic analysis of several federal dairy policy proposals by Charles F. Nicholson, California Polytechnic State University, SLO, and Mark W. Stephenson, University of Wisconsin, as well as reaction from a California dairy organization leader.

Volatility of prices and incomes has been an issue of importance for the U.S. dairy industry since the early 1990s. Much of this volatility appears to arise in the dairy supply chain, particularly the production sector, consistent with observed patterns of behavior for other commodities (both agricultural and non-agricultural).

Volatility in prices and incomes has been brought to the fore by recent events, especially a prolonged period of inadequate income for many dairy farmers during 2008 to 2009. There are likely high costs associated with price and income volatility throughout the U.S. dairy supply chain, but accurate estimates of these costs do not currently exist.

Given the costs, a number of programs have been proposed in recent years with the objective of reducing variation in milk prices and farm income. Key questions related to these programs are: 1) can they be effective at reducing variation in prices and income? and 2) do they have other effects that industry organizations consider either positive or negative?

This report summaries are analysis of the three main programs currently proposed as mechanisms to reduce price and income variability:

• Legislation introduced by Costa (H.R. 5288) and Sanders (S. 3531) (also known as the Dairy Price Stabilization Program, hereafter CS);

• The Marginal Milk Pricing (MMP) program proposed by Agri-Mark (cooperative in the Northeast);

• Elements of the Foundation for the Future (FFTF) program proposed by the National Milk Producers Federation.

Our analyses employ a complex systems modeling approach previously used for many other commodities that represents the U.S. dairy supply chain in significant detail. Although the analysis is undertaken at a national level, the model incorporates many product categories (intermediate and final), all current national dairy policies, a trade sector that accounts for interactions with the rest of the world and detailed representation of the proposed programs.

We compare the outcomes of each of the programs to a baseline scenario (which assumes continuation of current policies and no new programs) for the period 2010 to 2018. We undertake this comparison assuming no shocks, a single large shock to feed costs and export demand, and a set of stochastic shocks for which the timing and magnitude of changes in feed cost and export demand are randomly chosen for 200 simulations. These shocks are not forecasts of the future, but represent the types and magnitude of shocks that may occur during the next nine years. We also explore the impact of selected alternative programs implementations and behavioral assumptions.

Our assessment focuses on the level and variation in the all milk pricde, the level of milk income less feed costs for dairy herds of a constant size, milk marketed, government expenditures, net exports of three key dairy products (American cheese, NDM and dry whey) and total sales of fluid milk and American cheese. This indicators provide a spectrum of outcomes of interest to dairy producers, processors, consumers and government policy makers.

Key results

• All three programs would reducd milk price volatility significantly compred to the baseline, both with and without shocks. Under the assumption of large shocks, the program would reduce the average absolute deviation from $1.75/cwt to $1.26/cwt, $1.25/cwt and $1.13/cwt, respectively;

• Cumulative milk production from 2010-18 would be reduced by 0.4% to 0.7% undr the MMP and FFTF (range with and without shocks). Milk production would be increased 0,6% to 0,8% under CS with assumed program parameters;

• All three programs would reduce government expenditures for dairy programs significantly. Under the assumption of large shocks, government expenditures would be reduced from about #3.2 billion over 2010-18 to $1.6 billion for MMP and FFTF and $1.1 billion for CS.

• The MMP and the FFTF programs would increase the average all-milk price by $0.23 and $0,17/cwt, respectively without shocks, and by $0.12/cwt and $0.06/cwt, respectively, with shocks. These price enhancement effects occur because MMP and FFTF spend collected monies on demand enhancing activities (modeled as food donations through non-commercial channels);

• The programs would have different effects on net exports of American cheese, NDM and dry whey. Under the scenarios assuming the large shock, the MMP and FFTF would reduce average monthly net exports of American cheese by 17% and 22% respectively, compared to the baseline. Net exports would continue to grow under the program, just a slower rate than under the baseline. Moreover, the lower exports under MMP and FFTF, respectively. Because CS produces somewhat more milk than the baseline, American cheese exports and dry whey exports would increase by 2.6% and 8.1% respectively, compared to the baseline.

• The impact of the programs on cumulative fluid sales during 2010-18 would be less than 0.4% (the reduction under FFTF). The impact on cumulative domestic and export sales of American and other varies with the program. MMP and FFTF would reduce cumulative American cheese sales by 1.7% and 0.7% respectively. Reductions in cumulative other cheese sales would be 0.2% and 0.3% for MMP and FFTF, respectively. CS would increase cumulative sales of fluid milk by 0.2%, but decreases American cheese and other cheese by 0.5%, 1.0%, respectively.

• The programs would have different effects on Class III and IV prices. Due to purchases of American cheese, the MMP and FFTF programs tend to enhance Class III prices compared to the baseline (an average over 2010-18 of $0.45/cwt, respectively) for the scenario assuming large shocks. Average Class IV prices are higher under MMP ($0.09/cwt for 2010-18) and lower under FFTF ($0.04/cwt) compared to the baseline for the scenario assuming large shocks, which implies a larger average price spread between Class III and IV. The CS tends to lower both Class III and IV prices ($0.14/cwt and $0.20/cwt) for 2010-18 assuming large shocks, but maintains a smaller price spread.

Conslusions and implications

Milk price volatility has clearly become a significant problem for the dairy industry since the 1990s, although the underlying causes of volatility continue to be debated. Some observers have hypothesized that without an active Dairy Product Price Support Program dairy manufacturers will simply not hold enough commercial stocks of product to buffer supply anbd demand imbalances.

Others have suggested that it is our emergence into world trade in dairyu products that has been a cause of the price swings. Still others have suggested that it is simply a faulty price discovery mechanism in the Federal Milk Marketing Order system. But some dairy producers have also suggested that volatility results from rational responses to profitability incentives in the absence of coordinated expansion decisions.

Recent research has shown that there are complex cycles in milk prices. Over these last two decades, a 36-month cycle has emerged and is becoming larger, and these cycles are probably related to dairy producer decisions. This endogenous variability is consistent with the experience for other commodities, as noted in Sterman (2000). As a result, a number of dairy industry organizations have proposed programs with supply management components to reduce this volatility.

Our analyses of three proposed programs indicate that all three would significantly reduce milk price volatility and would reduce government expenditures on dairy programs in the absence of shocks, for a set of specific large shocks, and for a set of 200 randomly selected shocks.

In general, MMP and the FFTF programs would marginally enhance the average milk price over the baseline, primarily because they are stimulating demand for dairy products through food purchases for domestic assistance programs. The CS program would somewhat diminish the average all-milk price from the baseline. This occurs because the allowable levels of growth are generous and without the deeper troughs in milk price, producers are willing and able to expand milk production.

The three programs have different impacts on exports. The CS program results in more cheese production (due to the additional milk marketed) and some of that additional cheese, dry whey and NDM are exported. The MMP and the FFTF programs reduce exports of cheese and whey compared to the baseline.

The ultimate objective of this research is to help the dairy industry better assess the trade-offs associated with these policy options. This analysis attempts to account for a variety of potential unintended consequences, but we have not assessed every possibility. Moreover, we do not directly address implementation issues. We assume for the purposes of our analyses that the programs can be implemented by appropriate government agencies in a reasonably effective manner. Although ewe have no reason to believe this would not be the case, it is worth noting as an underlying assumption. The industry should now use this information to facilitate thoughtful discussion about potential benefits and drawbacks of these programs.

Early industry reaction

Rob Vandenheuvel, general manager, Milk Producers Council, has been working with dairy producer groups and cooperatives across the country since the early days of this market volatility issue to fund a broad analysis of the major proposals being made to address the extreme boom/bust nature of the dairy industry.

“Both of these economists (Stephenson and Nicholson) are well-known in the industry for their work while they were at Cornell University,” Vandenheuvel said in a recent newsletter communication. “One of the most important comments in their ‘key results’ is the first bullet point, which starts out…‘all three programs would reduce milk price volatility significantly compared to the baseline…’ With multiple policy proposals on the table for the industry to discuss, it’s important that any proposal meet a basic threshold – that it would successfully accomplish its stated goals: most notably, providing dairy producers with a more stable and profitable future.”

“There is a sobering reality expressed in this report that must be heard loud and clear by the industry. Included in the analysis is a ‘baseline’ projection for the next 8-9 years.  This projection is what the economic model predicts our national all-milk average prices to be, if we do nothing. Vandenheuvel stressed, “waiting is not a luxury we have.”

“Conventional wisdom among some of our leaders is that no change will happen until the Farm Bill. Some have even suggested that there is no use in even trying to push something sooner,” Vandenheuvel wrote. “But National Milk Producers Federation had it right on this issue. When approving their ‘Foundation for the Future’ proposal, their board voted that it be part of ‘the next Farm Bill or other suitable Federal legislation.’ Let’s consider the Farm Bill a last option, and see what our industry can pull together in the early 2011.

“To do anything less would be a huge disservice to the dairy farmers across the country who have sustained a devastating 2009-10 and are craving the tools necessary to combat this boom/bust volatility,” he concluded.

Policy changes require cooperation

Editor’s Note: Jamie Bledsoe’s “President’s Outlook” communicates with Western United Dairymen membership.

Congress passed the last Farm Bill in 2008. Much has happened in the dairy industry since the bill’s passage. No one could have predicted the horrific global economic meltdown that occurred in late 2008 nor the lingering impacts that crisis would have on our businesses even today. Clearly, Congress didn’t envision what transpired.

Western United Dairymen aggressively and steadfastly pushed to utilize all of the tools the 2008 Farm Bill provided to our dairy families to turn back the calamity we saw occurring with our businesses and the businesses of our friends and neighbors. We encouraged our Congressional representatives to help us, and the groundwork that we have laid with the Congress over the years paid off. Food donations were made to the hungry, export subsidies were wrestled free, environmental regulations were deferred, the price support program was enhanced and WUD’s expertise was sought by the House and Senate Agriculture Committees. CWT was kicked into high gear and several hundred thousand dairy cows were retired. We effectively enlisted the media to join in our calls for help. Many long hours and sleepless nights interspersed with critical meetings were the rule for our staff and our Board.

It wasn’t enough. Dairy families hemorrhaged equity that had been built over generations. In some tragic cases, the family dairy legacy expired. Safety nets included in the 2008 Farm Bill were not adequate for a disaster of this magnitude and the net itself was full of holes.

Since the crisis began there have been many ideas proposed to rescue the industry. While these efforts are well intentioned, our board recognized the grim reality that no significant change in national dairy policy would be available to us until the next Farm Bill. That has been the inescapable political reality of our dilemma.

Our board was asked for and provided input on some of these proposals.

In good faith we worked hard and provided it. Of course, nothing anyone could do was going to convince the Congress to take apart and restructure a Farm Bill that was passed less than two years ago. Nothing was going to move in the Congress on dairy until the next Farm Bill; on that the chairs of both the House and Senate Ag Committees have been adamant.

The hard work continues. This summer we joined a national coalition to help fund a study attempting to model the effect of proposed policy changes. The results of that effort have been released and will be used as one of the analytical tools in our toolbox. We also surveyed our members this summer and one thing resonated within the survey: The status quo is not an option.

Our Board and staff have continued to plow ahead. We’ve held dozens of meetings and engaged national and international experts to provide us with advice. Their conclusions supports something our Board has recognized all along … the next shot at shaping future dairy policy will be within the next Farm Bill. We have continued to labor with that in mind. We have also been mindful that the processing side of the industry will oppose some of the policy ideas desired by producers. We also recognize that a divided house cannot long stand.

This past summer a dairy policy proposal for the next Farm Bill was developed by National Milk Producers Federation (NMPF). This proposal, called Foundation for the Future, enjoys overwhelming support among their member cooperatives. Our Board has reviewed this idea and had discussions with them about it. Of course, our interest lies in what might be best for our members. We’ve asked ourselves the questions about whether this might be part of a solution, and importantly, whether this proposal might work for California.

Our Board is interested in several aspects of this plan. We are also intrigued with the fact that substantial political and producer support already exists for this plan across all regions of the country. Further, our relationship with NMPF is a positive one and they have worked well with us and us with them as we’ve moved key federal legislation together in the past. Their support of a dairy policy initiative is important relative to its likelihood of success. Their opposition to policy proposals is problematic. We do have questions and concerns, however. NMPF has solicited our input and encouraged positive dialogue and also has an appreciation for WUD’s political influence and our expertise on dairy policy.

Our board realizes that substantial changes to U.S. dairy policy will not be an easy lift in the Congress. Our membership seems inclined towards change. With the recommendation of the Dairy Programs Committee that met on September 3, our Board memorialized this impetus at our meeting on September 10 and voted to work closely with NMPF as they refine Foundation for the Future. Our work started this week as our CEO traveled to Washington, DC, to begin collaborative discussion with their organization.

The scope of this proposed change is broad. The effort to move real change in US dairy policy will be significant. The importance of developing a secure safety net for California producers is critical. We have been deliberate and thoughtful because this issue is so important.

We hope that others will join us to find positive solutions. We encourage all California dairy families and their organizations to help us work collaboratively for change. We extend our hand and hope it is accepted. Our industry must be viable for our member families to succeed.

Need a little kindness? Try Moozie

Opinions & Sacred Cows

By Ron Goble

Moozie the cow is developing a good reputation among kids. Moozie is the mascot for Children’s Kindness Network (CKN) and last month, she visited some 28,000 cows and several hundred children at Milky Way Dairy in Maricopa, Ariz. Dairy owner Nina de Jong said, “We wanted to have Moozie visit our dairy because we believe in the values she teaches kids. We certainly treat our family, our friends, and our dairy animals – all 28,000 of them – with kindness. We’re happy to host this event so that thousands can hear Moozie teach and encourage kindness, and reduce bullying in our schools.”

Events for children included: an instrument petting zoo brought by Arizona State University musicians, hayrides, calf feeding, face painting, a costumed Moozie and a robotic, talking Moozie. Gifts from Arizona Milk Producers were given to the first couple hundred 3- 8-year-olds who attended.

Founded in 1998 by Ted Dreier, the Children’s Kindness Network focuses on Moozie the Cow, their Ambassador of Kindness. Moozie began as a garage project by Dreier who grew up on a dairy farm and wondered if he could make a robotic cow.

When he visited a Head Start program in Denton, Texas with Moozie, he discovered that kids attentively listened as the programmed robotic cow talked about kindness. Hoping to help stop violence and bullying by reaching children early, Dreier stepped away from his career as a motivational speaker and began working with young children full-time.

Today, there are Moozie puppets all across the U.S., and Moozie robotic cows currently in Franklin, Tenn., Charlotte, NC, and Vallejo, Calif. In Vallejo, Moozie is part of a three-acre teaching farm. The children visit the pigs, ducks, etc. then go to a barn and listen to Moozie talk about kindness. She has become one of the main attractions at the farm. On an annual basis, between 25,000-30,000 children are exposed to Moozie’s message of kindness with that number growing each year.

It’s not hard to believe that children readily connect with Moozie, whether in the form of a puppet or a animated robotic cow. Kids love animals and of course we know that dairy cows are very special animals. With this special connection children listen as the theme of being kind – being kind to the earth, being kind to each other, being kind to animals, or even being kind to themselves.

What an important message for the dairy industry to support. I’m sure that those youngsters who visited Milky Way Dairy also learned something about the dairy industry while they were there. I’d bet they had an opportunity to drink some wholesome, ice-cold milk – regular or chocolate – in the process.

The Children’s Kindness Network is a nonprofit organization with a mission of “building a culture of kindness, beginning with pre-K.” Check-out Moozie’s web site www.moozie.com.

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


Production Pulse: Milk quality

A&L Laboratories introduces Quality Milk Program

A&L Laboratories is rolling out a Quality Milk Program to assist U.S. dairy operations in the quest for higher quality milk.

According to A&L Laboratories president and CEO Roger Beers, the program is designed to help producers meets or exceeds Pasteurized Milk Ordinance (PMO) standards and impending European Union dairy product import standards.

Beers said every dairy should implement a whole-farm approach quality milk team, including the farm’s veterinarian, nutritionist, milking team leader and other relevant employees, milking equipment dealer, chemical supplier, financier and a quality milk specialist.

When a farm elects to participate in A&L’s Quality Milk Program, an A&L quality milk specialist joins the farm’s team and works with team members to develop a results-oriented program. Steps in the program development include:

Establish quality goals — SCC, PI and SPC are metrics by which the program can be measured. Other useful metrics are Lab Pasteurized Count (LPC) and Coliform Count (E. coli).

• Examine current residue build-up on equipment —This assessment determines whether CIP is working properly. Amount and types of residue buildup give clues as to where problems are occurring and changes can be made to improve CIP performance.

• Evaluate housing/environment — Provide a clean, dry, comfortable and fly-free environment for calves, heifers and cows. Bedding additives can assist with sanitation by absorbing ammonia and moisture, drying the bedding and eliminating bacteria growth.

• Inspect and analyze CIP — Proper equipment cleaning involves a warm water rinse until water runs clear, followed by detergent rinse, acid wash and sanitizer. Proper water temperatures are crucial for CIP effectiveness and decrease the amount of cleaning products needed in the process. Water hardness and quality should also be evaluated so that proper amounts of cleaning products are used.

• Audit chemical product handling — Have an inventory control system in place with safety training for anyone handling chemical products.

• Evaluate teat health — Score teats regularly to benchmark and track health; look for high-quality teat dips that increase blood flow and prevent chapping and frostbite.

• Analyze milking machine performance — Ensure that the vacuum pump and regulator are working properly. Ensure that automatic takeoffs are set for proper milkout. Preventative maintenance should be performed every 1,000 to 1,200 hours.

• Perform a milking audit — Establish and supervise proper milking procedures.

To learn more, call (800) 225-3832 or visit www.AandL-Labs.com.

Boehringer Ingelheim Vetmedica: Consider on-farm mastitis culturing program

The tight dairy economy is forcing producers to take a close look at improving milk production levels and reducing treatment costs. Subclinical mastitis silently robs producers of more pounds of milk, while clinical mastitis causes a more obvious and direct impact on an operation, with milk discard during and after treatment, along with the cost of treatment.

One strategy that allows dairy producers to make better mastitis treatment decisions is to implement an on-farm milk culturing system.

“On-farm milk culturing is not for every dairy operation,” says Dr. Linda Tikofsky, Boehringer Ingelheim Vetmedica, Inc., professional services veterinarian. “A farm needs to have a certain level of mastitis in the herd or a certain number of cows, to make the investment in equipment and training economically feasible.”

She adds that if a farm is only sporadically doing milk cultures it makes more economical sense to submit milk samples to their veterinarian or an outside lab.Tikofsky says there are three main reasons for dairy producers to put an on-farm milk culturing system in place:

  1. Treatment decision: On-farm culturing at the most basic level allows producers to determine if the pathogens causing the infection are gram positive or gram negative. On-farm culture results can drive decisions to use an intramammary antibiotic, select a specific drug that has greater effectiveness against the specific pathogen, or withhold antibiotic treatment and discard milk until the cow can naturally eliminate the infection.
  2. Timeliness: On-farm culturing can give a producer preliminary results within 24 hours. Samples collected and sent to an off-site laboratory may take five to seven days for a diagnosis. Faster results allow the producer to make more immediate decisions on treatment.
  3. Cost effectiveness: With targeted treatment, producers will see a better response to treatment of infections caused by gram positive pathogens like staphylococci and some environmental streps. A recent study looked at the cost effectiveness of using on-farm culturing to identify and treat only gram positive infections. The 189 cases, after accounting for all costs, resulted in a net income of about $3,342/month.1 Infections caused by gram negative pathogens have a high rate of spontaneous cure and most antibiotics have limited efficacy against these pathogens.2 With many cases of mastitis caused by gram negative pathogens, the cow will clear the infection on her own without antibiotics. Evaluation of numerous research studies have shown 50% to 60% of clinical milk samples would earn a “no treatment” decision because they are negative for bacteria or it is a gram negative pathogen.3

Before implementing an on-farm culturing system, Tikofsky says producers need to consider several factors. “Operations need to make the commitment to have a designated person to plate the milk and review the plates to give you the right information,” says Tikofsky. “You need to train that person and everyone that collects samples to make sure it is done right.”

Other considerations include providing a clean environment to culture the samples and review plates to prevent contamination, investing in the right equipment including an incubator and plates, and finally, a proper disposal area for pathogenic materials.

“The bottom line is that with the information provided by on-farm culturing, producers can save money and increase the odds of a full cure on first treatment,” says Tikofsky. “If you treat right the first time, then the affected cow is back in the tank quicker and you save on milk discard.”

Tikofsky recommends that dairy producers visit with their consulting veterinarian about the advantages and implications of implementing an on-farm culturing system.

For more information, visit: www.bi-vetmedica.com.

–###–

1Pol M, Bearzi C, Maito J, Chaves J. On-farm culture: characteristics of the test in Proceedings. 48th Ann National Mastitis Council Meet 2009.
2Pyorala SH, Pyorala EO. Efficacy of parenteral administration of three antimicrobial agents in treatment of clinical mastitis in lactating cows: 487 cases (1989-1995). J Am Vet Med Assoc 1998;2121:407-412.
3Ruegg P, Godden S, Lago A, Bey R, Leslie K. On-farm culturing for better milk quality in Proceedings. Western Dairy Mgt Conf, 2010, 156.

Pfizer Animal Health: Extended therapy reduces chance of mastitis relapse

Mastitis is a common and pricey disease on the dairy operation, costing nearly $200 per clinical case due to decreased milk production, lower milk quality premiums, treatment expenses and increased culling and death.1 The cost and inconvenience of mastitis is further magnified if a treated cow relapses with a recurring infection.

“There is nothing more frustrating than having to re-treat a cow for mastitis,” says Dan Funke, quality milk manager for Pfizer Animal Health. “Mastitis therapy is an investment in labor, treatment costs and milk discard, and treatment decisions must be made in the best interest of the animal’s health and well-being. Dairy producers should utilize the course of treatment that offers the best chance of a complete cure the first time.”

Funke offers tips for appropriately treating mastitis for a successful outcome:

  • Consult your veterinarian: Work with your veterinarian to determine the appropriate mastitis therapy and duration of treatment to help achieve a bacteriological cure, thereby eliminating the infection, not just the symptoms. An extended-therapy protocol — defined as administering intramammary treatment for two to eight days — often can increase the likelihood of a complete cure. Only two products on the market are labeled for and demonstrated effective with extended therapy.
  • Tailor treatment: Treatment protocols should be based on the cow’s treatment history; length of the infection; and cow age, health status and lactation stage. It’s also important to identify the pathogen causing the mastitis infection. With this information, your veterinarian can prescribe the appropriate mastitis product and protocol. Using a product labeled for extended therapy, your veterinarian can tailor treatment duration to the individual case. For example, eight days of treatment may be recommended for hard-to-kill mastitis pathogens.
  • Complete treatment protocol: Dairy producers often discontinue treatment when milk returns to normal and clinical signs of the infection subside. Be sure to complete the prescribed treatment regimen to help ensure that the infection is eliminated.

Extended therapy can help you properly treat the cow the first time, reducing the chance of relapse and cost of treatment failure. It is the best thing we can do for the cow, and the bottom line.

For more information on ways to improve your milk quality, visit www.milkqualityfocus.com.

background_banner