Aug 22, 2014
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Dairy Talk

RSS By: Jim Dickrell, Dairy Today

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

Dairy’s Biogas Roadmap to Where?

Aug 11, 2014

The goals are laudable, but the reality on the ground is more sobering.

On August 1, the White House released its Biogas Opportunities Roadmap designed to promote biogas production on dairy farms that also incorporates mountains of institutional and consumer food waste that now is landfilled.

The dream is to tie country and city together to generate energy, reduce methane emissions, lessen the burden on landfills, save costs and create revenue along the way.

The "Roadmap" has the support of both the National Milk Producers Federation and the Innovation Center for U.S. Dairy. The goals are laudable: To help reduce the dairy industry’s contribution of greenhouse gas emissions by 25% by 2020.

Last year, the Innovation Center released a study that suggests what’s good for the environment also could be good for farmer’s pocket books. The study suggests there is $2.9 billion in on-farm revenue potential for anaerobic digesters that co-digest cow manure and food waste.

But the reality on the ground is more sobering. Even Tom Gallagher, CEO of The Innovation Center and Dairy Management, Inc., acknowledges "the landscape is littered with [biogas] failures." Over the past 20 years, farmers have been sold equipment that was not easy, if not impossible, to sustainably operate. Then there were the failed business arrangements and the often temporary, subsidized utility "green" programs that soon disappeared along with economic viability.

"Like other new technologies, there were a lot of failures," Gallagher says. But he also points to Europe where biogas production is no longer viewed as experimental or risky. "There are 7,000 digesters in Germany," he says.

The White House initiative is meant to jump start all that here. According to the Aug. 1 press release, the Biogas Roadmap will:

• Foster investment in biogas systems: USDA will lead efforts to better understand and track the performance of anaerobic digesters, seek opportunities to broaden financing options, and review Federal procurement guidelines.

  • Strengthen markets for biogas systems and system products: Example-- dairy farms of all sizes could enhance their revenues through nitrogen and phosphorus recovery.
  • Improve communication and coordination: USDA will establish a Biogas Opportunities Roadmap Working Group, with a goal to identify and prioritize policies and technology opportunities by August 2015.
  • Promote biogas use through existing agency programs: Leveraging existing programs will provide a way to enhance the use of biogas systems in the U.S., and leveraging research funding, and strengthening programs that support the use of biogas for clean energy, transportation fuel, and other bio-based products.


Gallaher adds that having the White House behind this initiative will put methane digestion on equal footing with other green technology such as wind and solar. That support is critical with the investor community. With the Federal government now behind biogas, private investors are more likely to invest in biogas research, development and infrastructure as they have with wind and solar, he says.

Let’s hope Gallagher is right. Most dairy farmers I talk with are highly skeptical that methane digestion will ever be a viable option. There simply has been too many equipment and energy agreement failures for them to think otherwise.

For this to work, USDA, the Department of Energy or somebody will have to demonstrate biogas is a viable, long term solution. I’m willing to go anywhere, any time to report on biogas success stories. Too often, though, these promising leads turn into failure and disappointment.
 

Why Can’t the Midwest Keep Up Its Dairy Share?

Jul 28, 2014

The results of a new study confirm what most farmers and processors know – along with a few surprises.

Editor’s note: Dairy Today is conducting our own expansion survey. We’d like to know your attitudes toward expansion, whether you plan to grow or not. And if you don’t, the reasons why. Take the 10 minute survey by clicking here

Anyone and everyone who has traveled the back roads of the western Corn Belt know instinctively that this is a great place to milk cows. Productive land, open space, cow-friendly climate and agricultural infrastructure not only dominate the landscape, it is its very fabric.

And yet, milk production in Iowa, Minnesota, Nebraska and North and South Dakota as a share of national production is just half of what it was 40 years. This five-state area is producing just 8% of the nation’s milk, down from 16% in 1970. Though production has rebounded somewhat in the last decade, the region is still a shadow of the dairy powerhouse it once was.

There are signs of life and rejuvenation along Interstate 29, which runs down the eastern edge of the Dakotas and the western border of Iowa. Both cows and processing have migrated to this "I-29" corridor, proving that commercial dairy production and manufacturing can survive and thrive in the region. But why hasn’t dairy taken off in other areas of the region?

The Midwest Dairy Association (MDA), the regional checkoff program for these western Corn Belt states plus Arkansas, Illinois, Kansas, Missouri and eastern Oklahoma, decided to find out. MDA commissioned Blimling and Associates and Dairy.com to conduct a comprehensive, competitive market analysis.

The idea stemmed from now-famous Bain Study, which showed that the United States is best positioned to fill growing world demand for dairy products, says Mike Kruger, MDA’s CEO. "So we asked the questions: What is the Midwest’s share of that growth, and what’s the dairy checkoff’s role in that market opportunity?"

The result is a 217-page report, "A Path Forward," that looks at both dairy farm and processing competitiveness compared to other growing dairy regions. The results confirm what most farmers and processors know. But it also has a few surprises, and some sobering spreadsheets on what an investment in a dairy operation requires.

For example, we know that the western Corn Belt enjoys strong milk price premiums, often beating comparable manufacturing areas by 50¢ to $1/cwt. But that’s a double edge sword—making dairy products manufactured here less competitive in national and global markets.

We also know that the western Corn Belt enjoys cheaper feed, last year’s massive winter-kill of alfalfa notwithstanding. South Dakota’s five-year ration cost average (2008-2012) was a hair over $6.50/cwt. of milk produced. That’s 25¢ better than Wisconsin and $1.25 better than Idaho.

The real shock came in dairy facility building and land costs, which have doubled in the last decade. A 3,000-cow, cross-ventilated facility with 100 acres for the site and 500 acres of cropland in South Dakota now costs upwards of $25 million. A comparable facility in Wisconsin or Michigan is $22 million. The difference is more expensive land farther west: $12,000/acre in South Dakota versus $6,000 in Wisconsin and Michigan.

In all these areas, only a select few dairy producers have the financial leverage to build facilities of this scale. So it’s going to be up to everyone else to decide if they’re willing to grow incrementally, from 80 cows to 150, from 150 to 300, and so on.

MDA’s "Path Forward" is just the first step. Western Corn Belt states must decide if dairy is their future. Dairy farmers are at the core of this decision, because only they can make the financial investments on the ground to make it happen.

Western Corn Belt farmers have faced this question for the past four decades. Often, they have said "no." But the time is fast approaching for a collective "yes." In another decade, it will be too late.

Is a German Monk Impacting Your Dairy’s Bottom Line?

Jul 14, 2014

Environmental effects may be behind the wide difference in the performance of your first-calf heifers, but don’t discount genetics.

If you’ve ever taken the time to chart the performance of your first-calf heifers, you’ll see a wide difference in performance. Even in the best managed herds with 30,000 lb. herd averages, one heifer will produce 36,000 lb. of mature equivalent milk while a heifer lying in the next freestall is producing 20,000.

Roughly 70% of the variance is due to environmental effects: A health event early in the calf’s life—pneumonia, scours, whatever—can affect how she performs in the parlor later in life.

But don’t discount genetics, says Pat Hoffman. Hoffman was a heifer specialist with the University of Wisconsin for years, and is now a Dairy Technical Specialist with Vita Plus Corporation.

Hoffman explains the other sources of performance variation are both genetic: parent average and Mendelian sampling effect. (Each contributes about half of the genetic variance.) Parent average is the average genetic value of the sire and cow. The better the parents, the better the average.

The Mendelian sampling effect is where that German priest comes in. Father Gregor Mendel, through experiments with pea plants in the mid-1800s, discovered how genes sort themselves at fertilization. When a sperm fertilizes an egg, the genes of each are recombined. On average, that recombination will be the average of the parents’ genetics. But any one individual can get any combination. Over a population, the recombination occurs on a bell curve with most getting the average and just a few on each tail of the curve getting the best or poorest combinations of genes. (Note: A.I. bull studs rely on Mendelian sampling to find the best next generation of sires. And that’s how and why they only bring back one in 10 bulls to active, proven line-ups.)

In practical terms, roughly 20% of calves get the best combination of genes and another 20% get the poorer combination of genes. It might seem counterintuitive, but as herd averages rise, the Mendelian effect takes on greater value, says Hoffman.

When herd averages were just 10,000 lb./cow, a 20% variance was +/- 2,000 of milk. At a 20,000 lb./cow average, the variance is 4,000 lb. And at a 30,000 lb./cow average, the variance is 6,000 lb. So the 24,000 lb./cow versus 36,000 lb./cow difference is actually to be expected, says Hoffman.

"There are numerous genetic research papers on the Mendelian effects on milk production and estimates are different within each research paper. But random genetic effects account for more than 5,000 lb. of milk in first lactation," he says. "At $20 milk, this variance is of high economic value."

"In fact, this Mendelian sampling effect has more value than ever before. And it may be growing [as we improve a herd’s genetic level] and not shrinking."

What you do about this is another matter:

Scenario 1. If you need every heifer as a replacement, your only decision is what you breed your heifers to. Low genetic value heifers merit cheap semen or beef semen (to produce dairy beef).

Scenario 2. If you don’t need all the heifers for replacement, the decision gets trickier because it now costs $2,000 (give or take) to raise a heifer to freshening.

The key is knowing which are the genetically poor heifers. If you have good records, parent average is probably good enough for Scenario 1. If you’re actually going to cull animals, parent average may or may not be.

Hoffman points out that parent average is dependent on the accuracy of records—knowing who the sire and dam are. Plus the reliability of Parent Average for production traits in a commercial herd is roughly 20 to 25%, says geneticists. Hoffman prefers genomic testing because it has higher reliability (65 to 70%) and will correctly identify parents.

But geneticists point out that a tripling of reliability does not equate to a tripling in accuracy. To get to the issue of accuracy, you have to take the square root of the reliability. So the accuracy of Parent Average for production is about .5. The accuracy of genomics is .84. Consequently, genomics is more accurate, but not 3X more accurate.

And then there’s the issue of cost. Genomic 6K or 9K chips cost in the range of $50. But to find the bottom 20% without using parent average, you have to test everybody. So the $50 test becomes $250. Perhaps that makes sense in Scenario 2 if you’re trying to save $2,000/head in rearing costs. It probably doesn’t in Scenario 1—unless you’re a registered breeder also trying to find the very top-end heifers for flushing and sexed semen treatment.

You can read Hoffman’s entire presentation on heifer performance variation here.

For more on genomic testing:

http://www.uwex.edu/ces/heifermgmt/documents/DairyHeiferGenomics101.pdf
 

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.

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