CWT’s Impact Not As Great As Hoped

December 21, 2009 06:00 PM
In a special report on the Cooperatives Working Together (CWT) program and sexed semen, USDA analyst Rachel Patton says the impact of the two hasn't been as great as some might have anticipated.
The special report is contained in the USDA's December Livestock Dairy and Poultry Outlook . A chart included in the report shows the decline in the U.S. all-milk price, which peaked in June 2008, did not start to trend back up until the fifth round of CWT in October 2009.
"Totals from the 2008-2009 series of retirements reported by the CWT are over 250,000 dairy cows and 5 billion pounds of milk removed from production, equivalent to about 2.7% of annual output,” writes Patton.
"However, milk production is forecast to only decline by less than half a percent in 2009 from 2008,” she later adds. "…each successive CWT herd buyout was expected to provide stronger milk prices, incentive existed for nonparticipating producers to increase or maintain production at the higher expected prices.”
She notes that milk per cow per day will climb from 56.4 lb. in 2008 to 55.7 lb. in 2009. "This 1.3% year-over-year increase is below the 1.8% average since 1989, and may be more than many expected, given that milk prices failed to cover feed costs for producers in much of the country from the fall of 2008 until fall 2009,” she says.
Patton also notes that sexed semen, used to produce mostly heifer calves, probably had little effect on milk production this past year. The reason: It takes three years from impregnation until the animal calves and begins producing milk. "Widespread use of sexed semen could become a greater factor in [future] milk supply, particularly if heifers with greater genetic merit are a consequence of improvements in technology,” she says.

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