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January 2006
Dairy of Distinction Applications Being Accepted (Lancaster
Farming,
Jan. 21, ’06). “Pennsylvania dairy farms are
invited to apply for this year’s Dairy of Distinction
award from the Northeast Dairy Farm Beautification Program.
Applications must be submitted by April 14. The award is
based on the idea that attractive farmsteads enhance consumer
confidence in the wholesomeness of milk and stimulate milk
sales and public support for the industry. . . . Roadside
judging will take place in May. . . . Winning farms will
be notified in late June. . . . To receive an application,
call Mike O’Connor at 814-863-3913 or e-mail him at MOConner@das.psu.edu.”
What’s New With 4X/6X Milking? “Frequent
milking during early lactation continues to make the headlines,” writes
Kimberlle Schoonmaker in Dairy Herd Management (Jan. ’06). “However,
some of the latest research has found no benefit from 6X
milking during the first 21 days of lactation. . . . An
on-farm study from the University of Arizona, published
in the November Journal of Dairy Science, shows that 6X
cows actually produced less milk than 3X cows on a large
commercial dairy in Arizona. . . . It’s not completely
clear why the cows in the University of Arizona study did
not see a response to 6X milking. However, the study’s
authors say that it may have something to do with factors
specific to the farm where the study was done. . . .” Read
the complete article at http://www.dairyherd.com/directories.asp?pgID=724&ed_id=5039,
including links to previous articles on 4X/6X milking.
Milk consumption continues to decline (Dairy
Herd Management, Jan. ’06). “Milk sales
on a per-capita basis have declined for the 15th straight
year. According to new data from the USDA, per-capita fluid
milk sales in 2004 dropped to 21.1 gallons—down from
the 25.4 gallons registered in 1990 when the 15-year slide
began.”
Waco wake-up call…city
sues upstream dairies. “Waco sued 14 dairies
80 to 100 miles upstream from the city’s water supply
under the Clean Water Act and Superfund law. The cases
could have far-reaching ramifications,” writes Lorraine
Stuart Merrill in Hoard’s Dairyman (Jan.
25, ’06). “Waco brought the suits in
the spring of 2004, after a decade of stakeholder meetings
and efforts to improve water quality of Lake Waco and its
tributaries. . . . The city alleges lagoon overflows and
runoff from land application of manure have polluted Lake
Waco with phosphorus, causing the city to incur ‘response’ costs
under CER-CLA (Comprehensive Environmental Response, Compensation,
and Liability Act). . . . Eight dairies have settled with
Waco out of court.”
Most important business measures is the “Questions
From Our Readers” feature in Hoard’s Dairyman (Jan.
10, ’06). “Every successful business measures
itself based on three important statistics, Return
on Assets (ROA), Return on Equity (ROE) or your
return on your net worth, and Asset Turnover (ATO).
All other financial information will boil down to these
three key areas.” The author, Gary F. Sipiorski,
President, Citizens State Bank of Loyal, WI, notes the
average return on assets to business owners is 4%, while
a respectable return would be 8%. The average return on
equity is 3%, a respectable return is 6%. Asset turnover
(the number of years it takes to turn the total farm assets)
is calculated by dividing total assets by gross income. “Normal
turns: 3.33. What the ATO should be to be competitive:
2.3.”
Business planning assistance available (Farmshine,
Jan. 6, ’06). “Since 2000, the Pennsylvania
Dairy Stakeholders has been assisting dairy producers throughout
Pennsylvania with the implementation of the Business Planning
Assistance Program (BPAP). . . . With grant funds from ARC
and PDA, BPAP can reimburse 75 percent (up to $1500) of the
dairy producer’s expenses for the services of a professional
agricultural consultant to develop a comprehensive business
plan or feasibility study. . . . Pennsylvania dairy producers
who would like more information on the Business Planning
Assistance Program should contact Alan Bair at 717-948-6328
or alan@padairy.org.” Information
is also available on the PA Dairy Stakeholder website at http://www.padairystake.org/programs/#2.
Dairy outlook for 2006 is uncertain (Farmshine,
Jan. 6, ’06). Dr. Ken Bailey, Penn State Dairy
Economist, recommends dairy producers “form realistic
expectations regarding 2006 milk prices and make plans for
improving margins or at least protecting them.” He
continues, “Milk prices are expected to weaken in the
months ahead, so better planning now could help avoid financial
problems later. . . . Are you locking in lower-price feed
when you can? Cutting out waste and avoiding expensive capital
items? Second, now might be a very good time to think about
using milk contracts to protect part of your 2006 milk supply.
. . . You may think of locking in, say, 25 percent of your
milk supply now as a cushion against volatile and unstable
prices. . . .Unfortunately, producers who got stung using
futures markets in 2004 and 2005 will hesitate to use them
in 2006. But this may be the year when they will pay off.”
Organic dairies unprofitable in 2004 (Northeast
DairyBusiness, Jan. ’06). “Organic dairying—the
fastest growing agricultural sector in New England—wasn’t
profitable in 2004. The biggest reason was expensive
feed . . . . An analysis of 30 organic dairies in (Maine
and Vermont) found that, on average, organic dairies lost
3% of their equity in 2004, not including off-farm income. Meanwhile,
Northeast nonorganic dairies of similar size earned a 4.1%
rate of return on equity.” The report, “Cost
and Returns to Organic Dairy Farming in Maine and Vermont
in 2004” is online at www.umaine.edu/rep/research-pub.html.
Dairy changes driven by technology is
the lead article of the “Peak Performance” special
section in Northeast Dairy Business (Jan. ’06). Author
Dave Natzke writes, “The past 25 years have produced
monumental changes in dairy industry numbers and profile,
driven by technological advances. . . . Scanning a dairy
spreadsheet on New Year’s Eve, 1980 . . . Wisconsin
had 45,000 dairy operations; California had 5,600; Idaho,
4,400. Wisconsin produced 17.4% of the nation’s milk
supply; California and Idaho together produced about 12%.
. . the average size of all U.S. dairy herds was 40 cows.
. . . Fast forward to New Year’s Eve, 2005. At last
count, Wisconsin had fewer than 15,000 dairy operations;
California’s total dropped to about 2,025; with Idaho
at about 900. Average herd size in the country is approaching
150 cows. . . . California and Idaho produced nearly 30%
of the nation’s milk supply. . . . Technological advances
in feeding, reproduction, housing and environment, and information
access and distribution have been primary drivers of those
changes.”
January 1 Cattle Inventory
Up 2 Percent reports the National Agricultural
Statistics Service (NASS). All cattle and calves in the
United States as of January 1, 2006, totaled 97.1 million
head, 2 percent above the 95.4 million on January 1, 2005.
All cows and heifers that have calved, at 42.3 million,
were up 1 percent from the 41.9 million on January 1, 2005. Beef
cows, at 33.3 million, were up 1 percent from January 1,
2005. Milk cows, at 9.06 million, were up 1 percent
from January 1, 2005. The report was released on January
27, 2006. National
and state data are available at http://www.usda.gov/nass/PUBS/TODAYRPT/catl0106.pdf.
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