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A Closer Look

RSS By: Dairy Today: A Closer Look

A Closer Look

Battered U.S. Dairies Face Uncertain Future

Dec 27, 2010

By Catherine Merlo, Dairy Today Western and Online Editor

Still reeling from 2009’s financial disaster, U.S. dairies spent 2010 in full survival mode and face more bearish pressure in the coming year.

Milk prices improved in 2010, allowing many dairies to cover their cost of production and pay bills. But the recurring burden of high feed costs – and the depth of 2009’s losses – continued to weigh down many dairies.
 
“2010 has been a sobering year, one of stabilization after the harrowing experience of 2009,” says California dairy producer Tom Barcellos. “I took the equity off my farm to keep my dairy alive. People are still having difficult times financially because banks don’t want to be in the business.”
 
“Nobody went backward in 2010, but nobody righted the ship,” says Robert Matlick, a partner in the accounting firm of Moore Stephens Wurth Frazer and Torbet. The firm has numerous dairy clients across the U.S. “Many dairies are still barely afloat, especially in the West.”
 
According to Matlick, 2010 U.S. milk prices have averaged about $14.80/cwt. for Class III milk, with October and November prices climbing to the $15-$19/cwt. range. That compares to a 2009 Class III price average of about $11.35/cwt., generally some $3/cwt. below the cost of production. In 2010, dairies are looking at a $1/cwt. profit on average.
 
“But most haven’t bounced back from ’09,” he adds. “They’re still climbing out of that hole. We’re projecting a 10- to 11-year payout on the debt that dairies acquired in 2009.”
 
A pick-up in export demand for U.S. dairy products helped boost milk prices this year.  Even so, high feed prices, spurred by ethanol’s growing demand for corn and supportive federal policy, continue to eat into dairy profitability.  After a pull-back earlier this year, prices for corn, soymeal and other livestock commodities are advancing to 2009’s high levels. Corn, a major ingredient in milk cows’ diets, is trading in the $6/bu. range, up from $3/bu. earlier this year.
 
“For 2010, feed prices for dairies are going to approach the cost of $7.50-$8.00/cwt.,” Matlick says.
 
Looking to 2011, producer Brad Crandall says he’ll “prepare for the worst and hope for the best,” on the Michigan dairy where he and his family milk 280 cows. Like other producers, Crandall will continue to control costs, boost efficiencies and get as much milk per cow as possible.
 
Many dairy analysts expect more price volatility ahead. “The global economy makes volatility more likely than ever before,” says Greg Steele, who’s with the Farm Credit bank known as AgStar Financial Services.
 
“The dairy industry must change its business paradigm by focusing on capturing margins and understanding cash-flow break-evens and cost of production,” he says. “Hope is not a strategy. Know a good margin when you see one.”
 
In addition, Steele says, “In the new landscape, there’s no substitute for adequate equity and working capital.”
 
Also in 2011, contentious debate is expected as the dairy industry develops policy recommendations for the 2012 farm bill. A controversial supply management proposal and talk of eliminating long-time price supports and federal orders promise tumultuous discussion and possibly radical change ahead.
 
But for many, all that could be a moot point.
 
“The farm bill discussions will be very intriguing, but those are long-term issues,” says Eric Erba with California Dairies, Inc., the processing cooperative that handles 43% of California’s milk volume. “Dairies first have to survive the next six to 12 months.”

Give Calves Their Fill During Winter’s Chill

Nov 29, 2010

To help calves survive and thrive in cold weather, diet is the first line of defense. 

 

Keeping water lines thawed and moving snow aren’t the only extra tasks that Old Man Winter creates on the dairy. Carefully managing calf nutrition is another demand that requires attention during the frigid winter months.Calves at dairy   web

“Newborn calves start out life with very minimal energy reserves,” says Mike Van Amburgh, Ph.D, associate professor of Animal Science at Cornell University. “Because calves have a higher surface-area-to-bodyweight ratio than older animals, they become cold-stressed at fairly moderate temperatures.”

At temperatures below the “thermoneutral zone,” calves start to expend their internal energy reserves simply to maintain their core body temperature of 102ºF. The result: Energy resources are diverted from growth and immune function, meaning calves will not gain weight, and they’re more susceptible to diseases like pneumonia and scours.
           
Van Amburgh says the thermoneutral zone for three-week-old Holstein calves is 68ºF to 82ºF, but at temperatures below 60ºF, calves have to increase energy expenditure to maintain body temperature. For calves from 22 days of age to weaning, it is approximately 42ºF, depending on insulation and rumen function. “When an 88-pound newborn calf has to start mobilizing its own fat stores to stay warm, it has less than one day’s worth of energy in the bank,” he notes. 
 
Colder weather demands higher nutrition
           
To help calves survive and thrive in cold weather, diet is the first line of defense. Because young calves three weeks and under have little to no rumen function yet, nearly all of the required extra energy must come from the liquid feed source.
           
Whether milk replacer or pasteurized waste milk is the primary liquid feed source, calves will use more energy when temperatures drop. Van Amburgh says a traditional milk-replacer program of feeding 20% protein, 20% fat milk replacer at a rate of 1 lb. of dry powder per day (2 qt. of milk replacer fed twice a day at standard dilution rates) will result in strictly maintenance for the calf, with no remaining energy for weight gain at temperatures below the thermoneutral zone.
           
Pasteurized whole milk fed at the same volume will provide 11% to 18% more energy due to its higher protein and fat content. However, consistency of nutrient levels in whole milk can vary considerably day to day, which requires careful monitoring of this feed source. Increasing nutrient levels in whole-milk feeding programs to accommodate for colder temperatures also may require supplementation with milk replacer, depending on the volume of waste milk available on the dairy.
           
Higher-protein milk-replacer rations fed at more appropriate rates provide considerably higher energy levels and allow calves to withstand colder temperatures while still gaining weight. Table 1 (below) shows a comparison of a 20:20 milk-replacer feeding program and a feeding program utilizing more of a 28% protein, 20% fat milk replacer. At 32ºF ambient temperature, calves on the 28:20 program still would be expected to gain 1.41 lb. per day, with no adjustments to the feeding program.
           
Van Amburgh advises working with a nutritionist to select and properly adjust liquid feed rations to accommodate for cold temperatures, noting that a 100-lb. calf may require more than double the amount of 20:20 milk replacer powder per day to achieve 1 lb. of gain per day at an ambient temperature of 5ºF. 
           
“Feeding a fat supplement in cold weather is another common suggestion,” notes Van Amburgh. “Most of those products are 7% protein and 60% fat. Supplementing a standard, pound-per-day, 20:20 milk-replacer ration with 0.25 lb. per day of a 7:60 fat source at 32ºF will increase the energy allowable to gain by just 0.22 lb. per day, which is just slightly above maintenance. Thus, feeding more of an appropriately balanced diet to meet the requirement for both energy and protein for allowable gain would be a more effective approach to compensate for cold stress.”
 
Tips for winning the winter battle
           
In addition to carefully evaluating liquid feeding programs, Van Amburgh provides additional advice for keeping calves healthy and growing in extreme cold:
·         Provide housing that is draft-free with good air quality, and keep calves dry at all times.
·         Use deep straw bedding to give calves a place to “nest” and thus conserve body heat. Many producers also successfully use calf jackets to also help conserve body heat.
·         Feed liquids as close to the calf’s internal body temperature as possible. Most milk-replacer manufacturers suggest feeding at 100 ºF to 105ºF. Supplying liquid feed or water at much cooler temperatures requires the calf to expend energy to warm the liquid to its internal body temperature after consumption, and can increase bloat problems.
·         Offer a high-quality (20% protein or higher), free-choice starter grain to encourage rumen development and provide supplemental energy. The protein level of the starter should be commensurate with that of the liquid feeding program.
·         Provide warm, free-choice water to promote dry feed intake and improve digestion, weight gain and overall health of calves. While this can be challenging in the winter, offer water for 20 to 30 minutes immediately post-feeding. Calves are still up and active at this time, which will help to encourage intake within a timeframe that is manageable for then disposing of unconsumed water before it freezes.
           
“Caring for calves in the winter provides its own set of challenges, to be sure,” says Van Amburgh. “But well-nourished, properly housed calves can grow well and remain exceptionally healthy, even in the most extreme conditions, and we now know this early growth has long-term benefits when they reach lactation.” 
 

 

 
Table 1.          Effect of cold stress on predicted calf growth using the 2001 Dairy                             NRC calf model (National Research Council, 2001). A 100-lb. calf was                                     used as the model animal.
 
Temperature,              Milk replacer               Energy allowable        Protein allowable
Degrees F                   formulation and           gain, lb./day                 gain, lb./day
                                    intake, lb./day
           
                                    20:20
 
68                                1.0                               0.46                             0.53
50                                1.0                               0.05                             0.53
32                                1.0                               0.00                             0.53
 
                                    28:20
 
68                                2.0                               1.96                             1.96
50                                2.0                               1.67                             1.96
32                                2.0                               1.41                             1.96

 

Seven Steps to Reducing Mastitis and Improving Milk Quality

Nov 01, 2010

With European dairy customers tightening their somatic cell count (SCC) requirements to 400,000, interest in improving milk quality is growing.

Jim Salfer, with University of Minnesota Extension Service-Stearns County, and Jeff Reneau, with the University of Minnesota, Department of Animal Science, have compiled seven general steps for solving a high SCC problem.  
 
Here’s their list:
 
1. Define the problem.
Use DHIA and/or on-farm records, bulk tank SCC records, bulk tank cultures and individual cow cultures to try and understand which cows are infected and when they are getting infected.
 
2. Identify the troublemakers.
Use bulk tank and individual cow cultures to determine what main organisms are causing elevated SCC or clinical cases. Different organisms will require different solutions.
 
3. Generate possible causes and solutions.
Based on the information you gathered in steps 1 and 2, work with your diagnostics team to generate a list of possible causes and consider possible solutions. If there are multiple causes, you will need to use a multiple-pronged approach. The use of a cause-and-effect diagram may be helpful in this process. Decide on the most likely causes and the best solutions.
 
4. Develop an action plan.
Work with your team to develop an action plan based on step 3. Determine how the preferred solutions will be implemented, who will be responsible for the implementation, and who will need to be trained.
 
5. Set up plan to monitor progress.
One of the most important components of any plan is to set up monitors to show whether your plan is working. The use of multiple monitors (e.g., BTSCC and bulk tank culture) is often best since no monitor is perfect. Some possible monitors:
·         Bulk tank SCC graph for each milk pickup
·         Monthly bulk tank culture for mastitis pathogens
·         Individual cow DHI SCC
·         CMT of all fresh cows (How many cows are calving infected? Which quarters are infected?)
·         Culture of all fresh cows with high CMTs (What organisms are causing infection?)
·         Culture of all new clinical cases and new sub-clinical infections (new cows over 200,000 SCC) each month (What organisms are causing infection?)
·         New infection rate on all cows (goal < 5%)
·         New infection rate on fresh cows (goal <10%)
·         Rate of clinical mastitis (goal < 2%/month)
 
6. Carry out the plan.
Make the changes you and your team decided is appropriate based on facts. Be careful not to tinker with the plan unless there is strong evidence the plan is not working.
 
7. Monitor progress and adjust plan as needed.
Review the monitors and progress monthly (or more frequently) to determine if the desired progress is being made. If it is, continue on the same course. If not, find out why. Is the problem the plan of action itself or failure to successfully implement the plan? Reevaluate the action plan and/or retrain personnel. Continue to fine-tune your plan until you achieve your SCC goals. Progress can be slow depending on the causes of the high SCC or clinical mastitis problem or the plan being implemented. However, if you use a systematic approach, you will make consistent progress toward your goal. Once reached, a low SCC will reward your farm with increased profitability and personal satisfaction.
 
If you’re curious about how your dairy’s milk quality stacks up, take this quiz from the University of Minnesota. 

Grass Isn’t Greener in the UK

Oct 18, 2010

Animal rights groups drive the media and public perception

JaneHillstrom
By Jane Hillstrom, Hillstrom Communications
 
When things aren’t going well, it’s beneficial to listen to someone else’s story. How would you like to raise animals in the United Kingdom where media and public support for animal rights groups dominates the landscape? The activists’ influence shapes legislation and food purchases.
 
Due to the animal rights organizations’ power throughout the country, farmers operate under the Five Freedoms, which were established by the British government. These animal welfare guidelines “should be considered on farm, in transit, at market or place of slaughter.” They include freedom from hunger and thirst, discomfort, pain, injury or disease, the freedom to express normal behavior and freedom from fear and distress.
 
Last spring, animal rights activity in the UK amplified when Nocton Dairies submitted an application for an 8,100 head farm. Animal rights groups targeted Nocton blaming the trend on large dairies in the United States. As a result, an investigative news team from the BBC traveled to the U.S. to shoot dairy farms. The show has yet to air.
 
Dairy producer leaders — dairy producers, co-op VPs, and industry groups — also traveled to the U.S. to learn about larger farms. A representative accompanied the visiting UK delegation from the Royal Society for Protection of Animals (RSPCA). The RSPCA does not advocate vegetarianism but has for some time owned and endorsed a brand of welfare-friendly livestock and fish products including cheese, called “Freedom Foods.” The attending representative is their liaison with the farming sector. He appeared positive and realistic about the dairy industry, yet still a gatekeeper.
 
During the visit, the UK dairy producers spoke freely and openly about their challenges. The producers are accustomed to RSPCA’s presence. It is a variation on “Keep your friends close and your enemies closer.” The animal rights groups hold considerable power with the media, the retail sector and the public making it difficult for agriculture to move forward without their support.
 
The World Society for the Protection of Animals (WSPA), an alliance of 1,000 member humane societies in 150 countries, created a website Notinmycuppa (cuppa means “a cup of tea”) to oppose Nocton Dairies. They applied the emotive word “battery” to dairy freestall barns and on the site, ask their viewers, “Would you drink factory milk from battery cows?”
 
Power comes in numbers and connections. The WSPA has “14 offices and hundreds of thousands of supporters worldwide” with a mission to bring “together people and organisations throughout the world to challenge global animal welfare issues.” They even have consultative status at the United Nations and the Council of Europe.
 
And if that weren’t enough, the UK’s popular media favors the animal rights groups. For example, a caption for an article in the Guardian on the proposed Nocton Dairies reads, “The £40m farm will condemn cows to a life inside a dark shed, according to rights group Viva.” And, some people think our media isn’t objective!
 
The rhetoric doesn’t go unanswered. Dairy producers tell their story through DairyCo (similar to Dairy Management Inc.), which proactively educates consumers on how milk is produced with its website, This is Dairy Farming, similar to the U.S. industry’s Dairy Farming Today. The site features farmers, describes on-farm animal care and environmental practices, and offers dairy facts and resources.
 
What can you do to make sure what happens in the UK stays in the UK? According to research studies, the U.S. public trusts dairy producers. Trust is built and maintained through communication. Create a farm brochure, website and business cards. Host an open house for your neighbors, speak at a service club meeting, and start a blog. What will you do this week to be an activist for dairy farming?
 
Jane Hillstrom owns Hillstrom Communications, a public relations firm, and is co-founder of Dairyland Digital, the owner of AgVille.com, an educational and networking website for people who work in agriculture. She can be reached at 920.839.5032 or jane@hillstromcommunications.com.

Using Words that Work

Sep 20, 2010

As your neighbors drive past your dairy, your farm sign is the next line of communication. Does your name convey that you are trustworthy, caring and responsible?

 
JaneHillstromBy Jane Hillstrom, Hillstrom Communications
 
Just because you’re speaking doesn’t necessarily mean that knowledge is being transferred. Communication is a science similar to the formulation in developing a balanced ration. It has certain ingredients — words, voice and body language — that when mixed correctly help you say what you intend to say.
 
The same can be said for the written word. For example, exclamation marks and all capital letters imply you are shouting. Bold, black, square letters speak gruffer than fine, cursive, yellow letters. By now, you might be thinking, “I have more important things to do than read about WORDS!” Consider this: Every conversation — written or verbal — counts. Every conversation affects dairy demand, which affects the viability of your business. So, PAY ATTENTION!
 
A picture speaks a thousand words. The roadside image of your farm says who you are, what you stand for and how you care for your animals without ever opening your mouth. A well-groomed farm is as well respected as a clean restaurant.
 
As your neighbors drive past your dairy, your farm sign is the next line of communication. Does your name convey that you are trustworthy, caring and responsible? Farm signs vary from “Just ‘R Mess Dairy” to “Knee Deep in It” to “Our Family Farm Since 1887.” Which words set a tone with your neighbors and community members about the type of dairy operation you run? Where would you want to buy pure, wholesome milk?
 Hillstrom   moving 2
As dairy producers work to educate the public about modern on-farm practices, words that work matter.  As Dr. Frank I. Luntz, author of “Words That Work” says: “What matters is not what you say, but what people hear.”
 
At times, simple and clear work best. For example, a family farm located across the road from a housing development posted two signs, “we have flies” and “we are not moving!” with the intent to inform their neighbors they live near an agrarian business.
 
The “we have flies” sign is very clear and follows the rule of simplicity. The owner eventually removed this sign after criticism that it was too strong. The sign, “We aren’t moving!” draws a line in the sand letting everyone know our arms are crossed and knees locked. Do the words create a positive image?
 Hillstrom   flies
These signs made their way onto Facebook and were printed in the local newspaper. In his article, Bob Pratte, reporter for The Press-Enterprise said, “Consider the signs a pre-emptive strike against silly grumbles from people who move to a rural area because they like the setting and then complain about farming.” The signs were a shot fired across the bow…or the road. Would warm cookies and cheese have been more effective?
 
Communication in any form shifts the receiver. Below are a few ideas for signage for your dairy to shift them your way:
·         Our Farm Feeds the World…and You
·         Care. Quality. Stewardship…Every day.
·         Producing Healthy Products for a Healthy Population
·         Feeding Families Everyday
·         Producing Milk by Caring for Our Cows and Protecting the Land.
 
Obviously, these are ramblings for a rich country. There are more than 900 million malnourished people in our world. Empty stomachs don’t worry about communication tips, farms next door or flies.
 
Photo credits: Kevin Snow
 
Jane Hillstrom owns Hillstrom Communications, a public relations firm, and is co-founder of Dairyland Digital, the owner of AgVille.com, an educational and networking website for people who work in agriculture. She can be reached at 920.839.5032 or jane@hillstromcommunications.com.
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