Aug 20, 2014
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June 2014 Archive for Dairy Talk

RSS By: Jim Dickrell, Dairy Today

Jim Dickrell is the editor of Dairy Today and is based in Monticello, Minn.

Formalized Employee Management: What’s the Tipping Point?

Jun 30, 2014

How Wisconsin’s John Pagel learned to successfully handle more cows and more people.

At some point in every expanding dairy’s growth, you will have to formalize how you manage employees with full-blown job descriptions, regular employee meetings and job performance reviews.

For John Pagel, of Pagel’s Ponderosa Dairy LLC, Kewaunee, Wis., the tipping point came when he upped cow numbers from 1,500 to 3,650 cows in 2009. At 1,500 cows, he was already managing 65 employees. But that number shot up dramatically when he grew cow numbers 145%. Currently, he employs 140 employees to milk 5,000 cows, manage 5,200 replacements and farm 8,500 acres.

"At 1,500 cows, we thought we knew what we were doing. But when we more than doubled our herd size in 2009, we found out that we didn’t," he says.

He soon learned there was no way he could manage that many employees by himself. "I now manage eight managers and they manage 120 people," he says.

Now, he has a mission statement, organization chart, employee manual, job descriptions, a mentoring program for new employees, formalized job and safety training, and follow-up programs to shortcut seemingly inevitable procedural drift. He has a 6:30 a.m. managers’ meeting Monday through Thursday each week to discuss what’s happening each day. The managers, in turn, keep their crews in the loop.

"Before, my phone was constantly ringing all day long with things people needed. Now we discuss things in the morning and plan our days," he says. For example, northeast Wisconsin has been deluged with rain all spring. These "rain days" have left his cropping crew idle, but it has allowed those employees to help out with facility and equipment maintenance.

On good weather days when corn needs planting or alfalfa needs harvesting, his maintenance crew is shifted over to help with field work. That might have happened before, but with daily meetings and a formal chain of command, the work flows more smoothly.

Pagel’s employee management program is based on the tri-footed C-A-R principle: communication, accountability and respect. "It’s a program designed to let every employee know how we treat one another at the Ponderosa," he says.

• Employees are trained in communications skills, to actively listen, to be assertive (but not combative), show leadership and respect others.

• They are also expected to be accountable. "That means showing up on time every day and being ready to work," says Pagel. "It doesn’t matter if the Packers beat the on Vikings Sunday, come Monday morning employees need to be ready to work."

• Every employee must be treated with respect, and in turn, treat everyone else with respect. Example: A milker is not only a milker. "At Ponderosa Dairy, a parlor technician is one of the most important jobs on the farm," says Pagel.

Pagel readily admits that his approach isn’t foolproof, and he still deals with his share of employee issues. "Taking care of employees is an ongoing process and it will go on forever," he says. But he now has a formalized system in place that works reasonably well and keeps chaos to a manageable minimum.

Pagel spoke at the VitaPlus Calf Summit in LaCrosse, Wis., last week. A preview of his talk can be found here.

Know Your Rights When EPA Shows Up

Jun 16, 2014

Even with a court-issued warrant, you still have Fourth Amendment rights

The Environmental Protection Agency is stepping up surveillance and inspections of dairy farms for potential water discharge violations.

EPA has already done flyovers of dairy facilities in Michigan, Iowa and Wisconsin, and has followed up with document requests of numerous dairies, says David Crass, an attorney with Michael, Best and Friedrich, LLP, based in Madison, Wis. and Washington, D.C.

Farms will have to comply with those document requests under penalty of perjury, he says. And EPA is now in the process of following up on those document requests and making surprise, on-farm inspections. EPA is targeting those inspections to occur after large precipitation events that tax a farm’s runoff control measures, he says.

But this is still America and you still have Fourth Amendment constitutional rights from unlawful search and seizure, says Crass. "If the inspectors have a court-issued warrant, you will have to deal with them. But call your lawyer immediately," he says.

Make sure your employees direct EPA staff to your farm office upon their arrival, and have them wait there until you or someone you authorize can meet them. "Only your authorized farm personnel should engage these inspectors in discussions or bring them on a tour of your facilities," Crass says.

If the inspectors do not have a court-issued warrant, they are on your property as your guest, he says. "Unless they have a judicially-issue inspection warrant, a facility owner or operator can deny them access to the facility," he says. "You can offer to reschedule at a time that is more convenient for you if you are away from the farm or are otherwise scheduled on other matters."

"Inspectors don’t like that, but unless they have an inspection warrant issued by the court, you have the right to tell them to reschedule," says Crass.

In addition to rescheduling to a time that you are actually available, this will give you time to do your own facility inspection, and address any areas on the farm that need attention. Of particular focus by EPA during these inspections are manure storage, feed storage and leachate areas, calf hutch areas, outdoor lots and clean water diversions. "Make sure these areas are not resulting in any discharge to waters of the US," he says.

When the inspectors do arrive for the scheduled appointment, ask them specifically what they want to see. Crass says it is important to define the scope of the inspection up front. It must be limited to areas that could result in a discharge of contaminants to surface waters, which is the limits of EPA’s Clean Water Act jurisdiction. Define this scope up front and then keep the inspection limited to that scope.

"For bio-security reasons, inspectors don’t need to go inside barns, for example," says Crass. You have legitimate bio-security reasons to keep them out since you don’t know where they last were and what they might have come into contact with.

Always have two people from your operation accompany the inspectors so you have two witnesses to the inspection. "Take pictures of everything that they take pictures of and take samples where-ever they take samples," Crass says. That will create duplicates of everything inspectors have so you have your own verification should issues arise. Crass also emphasizes the importance of reviewing for accuracy and correcting the record after EPA issues a written report of the inspection.

Actually, Dairy Promotion Does Work

Jun 02, 2014

Without advertising, sales would decline. But here’s what the dairy industry really needs.

Despite record (or near record) milk prices, I continue to hear frustration with the dairy checkoff programs. I heard it at a veterinary conference last Wednesday here in Minneapolis from a dairy farmer friend of mine, and our own Robin Schmahl voiced his frustration last Tuesday in his AgDairy Market Update.

But the fact of the matter is that dairy promotion does work. In his Report to Congress on generic dairy promotion, Oral Capps, an economist with Texas A&M, shows that for every dollar invested in dairy promotion, consumers spend $3.05 more on dairy products. It varies by product, with fluid milk seeing the lowest benefit-to-cost ratio (BCR) of $2.14. The cheese BCR is $4.26, export promotion, $5.12, and butter, $9.63.

Yet fluid milk per capita sales, despite the Milk Processor Education Promotion (MilkPEP) budget of $95 million, continues to decline. (MilkPEP is funded by a 20¢/cwt. assessment added to the Class I price.) Over the last 10 years, fluid per capita sales have fallen between 15% and 20%. What gives?

Capps says it’s a combination of factors:

• "Consumer demand is generally affected more by [retail milk] prices and incomes than demand enhancing activities.

• "Dairy markets are becoming less responsive to demand-enhancing expenditures over time."

Consequently, dairy promotion spending on fluid milk only reduces the rate of decline, he says. According to Capps’ estimates, fluid milk consumption would be 197 lb. per person without MilkPEP ads, or 10 lb. less than they currently are. So simple math suggests the U.S. would consume 3.2 billion pounds less milk—roughly equivalent to Colorado’s annual output--without the MilkPEP ads.

To its credit, MilkPEP has done extensive research on its marketing program. It has dumped the ‘got milk?’ and milk mustache campaigns in favor of its Breakfast Project last year and Milk Life, launched in February. The Breakfast Project is predicated on the fact that breakfast is the largest milk consumption meal of the day, and fewer families are eating breakfast.

Dairy Today associate editor Wyatt Bechtel did a deep dive into the Milk Life campaign for our June/July issue. The campaign is designed to re-energize fluid milk advertising, using double entendre that "milk is life" and consumers should "milk life" for all its worth. Hopefully, the ads will jump start sales.

But go back to Oral Capps’ two bullet points above. Retail prices and income have more to do with milk purchases than advertising—and advertising is becoming less effective over time.
Jerry Dryer, in his June/July Market Watch Diary column, says the dairy industry must focus more of its effort on innovative fluid milk products, packaging and milk pricing. The Innovation Center for U.S. Dairy agrees, and launched its fluid milk initiative several years ago.

All of this will take energy, commitment, people and, of course, money. The industry really doesn’t have a choice. We can promote fluid milk all we want. But if we don’t have innovative milk products placed in attractive, easy-to-use packages in places where consumers can readily buy them at competitive prices, we’ll continue to see milk sales decline.

Read Oral Capps "Report to Congress" on 2012 generic dairy promotion and research here.

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