July 2004

Dairy Prices Seek Solid Ground reports the “Dairy” feature in Livestock, Dairy, & Poultry Outlook (ERS-USDA, July 16, 2004) “Cheese prices remain under considerable pressure from pipeline stocks built up during the buying frenzy that caused spring’s record prices. . . . Butter prices had not been as weak as cheese prices in early July, but took a tumble in mid-July. . . Consumer demand probably remains fairly strong. Economic growth is expected to rise, and restaurant demand is back. . . . Recent wholesale price drops have lowered expectations for second-half farm milk prices. Even so, milk prices are projected to average well above a year earlier.” Read the complete report in .pdf format at http://usda.mannlib.cornell.edu/reports/nassr/dairy/pmp-bb/2004/mkpr0704.pdf.

Overview of the AGR-Lite Crop Insurance Program is presented in MFVGA Newsletter (Minnesota Fruit & Vegetable Growers Assn, July ’04). “AGR-Lite is a revenue policy, rather than one based on acres and yield, as are most of the other crop policies. AGR-Lite is currently in 12 Northeast states and will be in five more states starting in 2005. . . . The policy covers a wide variety of crops and livestock enterprises. . . . Adjusted Gross Revenue-Lite (AGR-Lite) is a streamlined whole-farm revenue protection package. The plan provides protection against low revenue due to unavoidable natural disasters and market fluctuations that affect income during the insurance year. Most farm-raised crops, animals and animal products are eligible for protection. . . . AGR-Lite can stand alone or be used in conjunction with other Federal crop insurance plans.” Detailed information is available at the USDA Risk Management Agency website by clicking here.

Is your operation prepared for a hurricane? asks Mid-Atlantic Grower (July ’04) in a column by Jim Johnson, Rutgers Cooperative Extension. “The possibility of a hurricane affecting your operation is one more of the inherent risks of doing business.” The article focuses on “the coastal states of New Jersey, Delaware, Maryland and Virginia. “A review of information from the National Weather Service for the period 1900 to 2000 indicated that there were few direct hits of hurricanes for the Mid-Atlantic region. . . . There is the possibility of a major hurricane making a direct hit in our area. However, our risk based on historical data is low. The potential of damage from peripheral effects of a hurricane remains. . . . rainfall will probably be the key issue and wind a secondary issue.” Johnson recommends identifying low-lying areas; checking structures for weaknesses; and, conducting safety and first aid training. He also notes last-minute preparations such as filling fuel tanks; filling sprayers with water; charging batteries; securing windows, doors and greenhouse vents as applicable; and cautioning employees to avoid driving into water of unknown depth. Find the article on the Mid-Atlantic Grower website at http://www.americanfarm.com/Grower.html.

Milk-based beverages gain popularity reports Hoard’s Dairyman (July ’04). “These products include milk-based carbonated soft drinks like Swerve from the Coca-Cola Company (and similar products from its main competitors, Pepsi and Dr. Pepper), low-carbohydrate milk products like LeCarb from Southwest Foods designed to appeal to those following Atkins and related diets, and a wide variety of other energy, coffee-based, and nutritional beverages. . . . A second, currently less visible, type of new product development also is underway with individual milk protein fractions . . . Milk proteins already enjoy a presence in functional foods, defined as foods promoting health benefits beyond basic nutrition because of their attractive nutritional profiles. . . . Educating consumers about milk protein fraction properties is expected to positively influence their interest in the use of milk protein fractions in products they buy. . . Finally it is important to note that assigning the new beverage products to Class I may or may not improve producer incomes. . . . the good news is that the difference in milk prices and farm revenues under Class I versus Class II are likely to be small . . . Regardless of the class to which these new products are assigned, milk prices will be higher with growth in demand for these new beverage and protein-fraction products.”

Forward Contracting is debated in the July ’04 issue of Hoard’s Dairyman. Two University of Wisconsin economists argue forward contracting “Should be an option . . . for everyone who wants a long-term risk management tool, not just those who ship to a dairy co-op.” (See a similar article by the same authors at http://www.aae.wisc.edu/future/ , scroll to “Negative PPD Explained” in blue box, and select “Forward Contracting, Hedging . . .”). The director of economic research for the National Milk Producers Federation says “It’s a bad deal . . . A program that strips away producers’ basic price protections, in exchange for a set of questionable benefits, is a bad deal for all dairy farmers.”

Federal Milk Marketing Order Pooling, Depooling, and Distant Pooling: Issues and Impacts is available on the Understanding Dairy Markets website of the University of Wisconsin. This 16-page article includes definitions of terms such as milk pool; money pool; marketing area; depooling; producer settlement fund; producer price differential (PPD); uniform producer price and more. The complete article is available at http://www.aae.wisc.edu/future/ (scroll down to “Negative PPD Explained” in blue box, click, then select the article title from list).

National Dairy Quality Awards honor dairy producers from across the United States who successfully have placed high priority on producing milk of the highest quality. The program is open to all U.S. dairy producers. Applications need to be submitted by professionals who serve the dairy industry, such as dairy plant field representatives, veterinarians, extension specialists, or DHI supervisors. The nominator should work with the dairy producer to complete this application. The deadline for submitting the initial screening form is September 10, 2004. Judges will review the applications and select the top nominees, who will be asked to provide additional information on overall herd health and management practices. The final judging will be completed by mid-late November. The initial screening is form available at http://nmconline.org/ndqa/appl2004.pdf.

They work smarter (Hoard’s Dairyman, July ’04) details the experience of two North Carolina dairies that worked with labor consultants to develop job descriptions, task protocols, and an employee handbook. “The consulting company helped Rocky Creek Dairy get up to speed on hiring and firing, such as incorporating the paperwork needed for immigration law compliance and the documentation necessary for disciplinary actions. . . . With his experience in the recent expansion to 1,000 cows, Shelton (the owner) believes a labor consultant is even more important as herd size grows.” He recommends, “Besides looking for a consultant with dairy knowledge, I would lean toward someone with veterinary experience.” The dairy manager for the second dairy stresses, “A dairy needs to have the attitude that employees are everything.”

Innovative Farmer of the Year. Nominations are now being accepted for the Innovative Dairy Farmer of the Year award, annually co-sponsored by the International Dairy Foods Association (IDFA) and Dairy Today magazine. The winner will be honored at the 2005 Dairy Forum, January 9-12, at the Disney Yacht & Beach Club in Orlando, Fla. The deadline for nominations is Friday, September 24, 2004. For award criteria and a nomination form, click here. Questions can be directed to Tanika Manning at IDFA, 202/220-3557, tmanning@idfa.org. (Source: Dairy Today eReport, July 30, ’04)

Cutting nutrients in the Chesapeake. “The Chesapeake Bay Foundation this week called for new funding and action to reduce pollution from animal manure in the watershed. Among dairy-specific initiatives, CBF advises Pennsylvania's governor and legislature to establish a $10 million dairy feed management pilot program to improve dairy feed efficiency. New research indicates that lower nutrient levels in dairy feed could reduce pollution by up to 40%, while saving the region's dairy industry as much as $18 million a year. To view the complete report, go to www.cbf.org.” (Source: Dairy Today eReport, July 30, ’04)

USDA to Provide Interim System to Register Locations as Part of the National Animal ID System. “The U.S. Department of Agriculture's Animal and Plant Health Inspection Service today announced that it has selected a premises registration system, as an interim solution, that will record locations where animals reside or will reside. This is an important first step in the implementation of a national animal identification system (NAIS). . . . USDA is enhancing the system for use in multiple states and will provide it to a limited number of states in early August. It will be phased-in to ensure that any problems can be addressed before it is available nationally.” (Source: USDA Animal and Plant Health Inspection Service press release, July 17, 2004.) Read the complete article at http://www.aphis.usda.gov/lpa/news/2004/07/premreg_vs.html.

Northeast SARE Farmer/Grower Grant Program applications available. The Northeast Sustainable Agriculture Research and Education Program’s Farmer/Grower Grant Program “supports Northeast farmers who want to explore innovative sustainable practices on their farms.” The program is open to farmers in Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, West Virginia, Vermont, or Washington, DC. It allows farmers to conduct experiments, try new approaches, and test emerging ideas about agricultural sustainability. The emphasis is on new ideas that advance good stewardship, improve farm profitability, and strengthen rural communities.” The deadline for the 2005 grant round is December 7, 2004. For information and application, click on http://www.uvm.edu/~nesare/FGinfo.html. (Source: Pennsylvania Vegetable Grower, July ’04).

Another herd-buyout plan in the offing reports the July 7, 2004 electronic newsletter “Dairy Alert” (Dairy Herd Management). “Although the Cooperatives Working Together program has started its second year, it may be a while before you start hearing the specifics of another herd-retirement program. CWT officials will probably announce something later this year once dairy prices have reached target levels. Currently, there is too much strength in dairy prices for the herd-retirement program to kick in and work optimally. The first CWT herd-retirement program initiated last year reduced the national dairy herd by 33,000 head.”

Tunnel ventilation minimizes heat stress reports the July 7, 2004 electronic newsletter “Dairy Alert” (Dairy Herd Management). “Tunnel ventilation does a better job of reducing heat stress than shade and fans alone, according to research from Mississippi State University. Cows cooled by tunnel ventilation ate about 4 pounds more feed per cow per day and produced nearly 6 pounds more milk per cow per day than cows cooled with shades and fans. The tunnel-ventilated cows also had lower peak body temperatures and slower respiration rates.” Read a related article from Mississippi State University at http://msucares.com/news/print/agnews/an04/040624tunnel.html.

Pennsylvania updates milk dealer bonding reports Dairy Today eReport (July 9, 2004). “Rep. Art Hershey, a former dairy producer, introduced legislation OKd this week requiring new dealers to post a bond with the Pennsylvania Milk Marketing Board. The bond must equal 75% of the highest aggregate amount owed by the dealer to producers for a 40-day period during the preceding 12 months. Current participants in the security fund are permitted to operate under the old, 30% bond/security requirements.” A press release about the legislation is available by clicking here.

Milker wages stagnant reports Dairy Today eReport (July 9, 2004). “A University of California informal survey of 112 dairy operations from across the country suggests milker wages have remained unchanged. In a similar survey conducted in 2000, milker wages averaged $9.26 per hour. In this years survey, the average was $9.25. Wage rates were highest in the West at $10/hour, but average years worked was also the longest, nearly six years. The Midwest averaged the lowest milker wages, $8.60, but also had shortest work tenure, 3 years. The number of foreign-born workers also varied by region: West, 81%; Midwest, 49%; Southeast, 34%, and Northeast, 22%.” Read a more complete report on this informal survey at Dairy USA Wage Survey 2003.

June all-milk at $18.40 notes Farm Journal’s Dairy Today eReport (July 2, ‘04). “USDA reported Tuesday that the U.S. all-milk price for June was $18.40/cwt, down $1 from May but up $7.40 from last June. The June California all-milk price was $16.30; Idaho, $17; New York and Wisconsin, $18.70, and Florida, $25.30. The milk-to-feed ratio for June was 3.20, up 0.3 from May (with USDA revising its May M-F ratio downward from its original estimate of 3.36). While these ratios are definite improvement over last Junes 2.21, it generally takes a ratio of 3.5 to encourage dairy expansions on a wide scale.”

LOL to restate earnings reports Farm Journal’s Dairy Today eReport (July 2, ‘04). “Land O’Lakes announced late last Friday that it will be re-stating earnings for 1997 through March 31, 2004. Auditors apparently found problems with accounts at its Carlisle, Penn. facility, with preliminary findings showing that earnings were over-stated by $19 million. A new accounting team has also been brought in to the Carlisle facility.”

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