July 2005

Bush calls for elimination of agricultural subsidies is discussed by Darryl E. Ray, Director of the University of Tennessee 's Agricultural Policy Analysis Cen ter , in The New Farm.com (Rodale, July 15, '05 ). " President George W. Bush dropped an agricultural bombshell at the G-8 Conference in Gleneagles , Scotland . At the least, it was a bombshell for U.S. agricultural producers who see the present farm program as essential to their survival. According to a July 7 Bloomberg press release, Bush 'is seeking agreement with the European Union on a plan to eliminate, by 2010, the $112 billion a year that rich countries spend subsidizing their farmers.' Bush's proposal goes well beyond the subsidy reductions currently being considered as a part the ongoing trade negotiations in the Doha Round of the World Trade Organization." Read the complete article at http://www.newfarm.org/columns/policy/2005/july05/072505.shtml .

Odds are market will soften by fall says Bob Cropp in the Market Watch column of Dairy Herd Management (July '05). "Two major factors indicate that this softening is a real possibility. First, we are seeing slow growth in cow numbers. Strong milk prices have reduced the culling and slaughter of dairy cows. . . . In addition, it looks like milk per cow is beginning to recover from the relatively low increases of the past two years. . . . It is unlikely that commercial disappearance will be able to absorb all of this milk at current prices. . . . There is no exact science in predicting milk prices. But market factors strongly suggest that the odds are greater for lower milk prices later this year."

Avoid these common expansion pitfalls recommends Timothy F. McNamara in Hoard's Dairyman (July '05). "Not having enough working capital and not doing the hard work of income/expansion projections have been among the downfalls of many plans. . . . most people love the facility planning phase but shudder at the thought of writing a business plan or creating a financial projection. . . . The effective use of professional consultants often is a good investment for expanding dairies."

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, 2005 . 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/appl2005.pdf .

Got kids? Got chores? How to keep your kids safe is "The People Side" feature in Hoard's Dairyman (July '05). "Each year, 32,800 children are seriously hurt doing farm work in the United States , and around 100 children are killed, according to the National Agricultural Statistics Service. . . . The North American Guidelines for Children's Agricultural Tasks, known as NAGCAT (were) developed in consultation with farm families, cooperative extension specialists, and child development and health experts. The guidelines help parents assess whether children aged 7 to 16 are developmentally ready to safely perform common farm tasks." The " Job Hazard Analysis Frameworks and Developmental Checklists" for many farm jobs are available at http://nagcat.org/nagcat/pages/default.aspx?page=AgriJobs

Migrant Milkers: Managing a multicultural dairy workforce in Farming (July '05) includes a list of resources and websites including the Cornell University PRO-DAIRY Hispanic Management website: http://www.ansci.cornell.edu/prodairy/hrm/hispart.html and the "Easy Dairy Spanish" publication and CD that can be ordered at http://www.farmllc.org/custom2.html .

Measure your dairy's efficiency advises Northeast Dairy Business (July '05). Author Richard Hermonot says, "Your dairy's efficiency as measured by gross margin as a percent of sales is an important key to managing your profitability. It's a good measure of how efficiently you are converting raw material into finished product. A dairy farm is really a manufacturing plant with biological machines (cows) that convert raw material (cost of goods sold) into finished product (milk). Gross margin is defined as those dollars left in your business after paying your variable costs, or cost of goods sold (COGS). . . . On a dairy farm, COGS includes: Labor, feed, crop costs, livestock costs, marketing. Add these costs together, then subtract non-milk income to calculate COGS."

Dairy incentive reference updated reports Dairy Herd Management (July '05). "The publication details how to design effective labor incentives, as well as what to avoid. Even if you don't want to tie worker performance to pay, the reference book helps you define and measure important goals for your dairy. . . .To get your free copy, go to http://www.cnr.berkeley.edu/ucce50/ag-labor/7dairy/7dairy.htm .

Operating Cash Flow: The Secret to Creating and Sustaining a Valuable Business ( American Christmas Tree Journal, July '05). Author Jim Devine notes, "The number of times that I have heard a business owner say they acquired additional assets due to their ability to write them off would require a Hewlett Packard calculator to quantify. . . . As a small business owner, the funding strategies that are available don't include some of the creative financing alternatives that are available to large businesses with open access to public capital markets. On the credit side, most small businesses have access to only the capital they can effectively borrow from their local bank or what they can squeeze from their suppliers. Equity in the form of retained profits represents their primary equity funding resource.. . . We often find that business owners who are struggling with cash flow issues are also the ones who have accumulated the biggest pool of assets. . . . The very decision to acquire an asset is an intentional decision to be less liquid. . . . Remember, at the end of the day, cash is king!

New Jersey , Pennsylvania Reach Agreement on Commercial Drivers' License Exemption for Farmers ( Country Folks Grower , July '05) "The reciprocal agreement recognizes each state's exemption from the commercial drivers license requirement for farmers, enabling farmers to drive their vehicles into the other state without being cited. . . . The CDL exemption applies to vehicles controlled and operated by farmers, their employees or family members that are used to transport agricultural products, farm machinery or both to and from a farm, provided they are within 150 miles of their farms." Read the complete article at the State of New Jersey website, http://www.state.nj.us/agriculture/news/CDLagreementPR.htm .

Protect Your Hearing recommends Golf Course News (July '05) in an article that appears in English and Spanish. "Loud noises increase heart rate and energy use. This can contribute to fatigue, discomfort and mental unease. However, the primary effect of noise is loss of hearing. Abusing the ears with loud noises shifts the hearing threshold upward, so that a person can only hear louder sounds. . . . Once damage to hearing has occurred, it is impossible to repair. Everyone should take steps to protect their hearing in the workplace. . . . Acoustical ear muffs provide the most effective protection against noise. They don't contribute to infection and discomfort as do ear plugs, which fit tightly and carry dirt to the ear canal. Ear muffs block more noise than plugs because they also cover the sound conducting bones around the ears."

PFB Testifies Against Sunday Hunting reports Country Focus (PA Farm Bureau, July '05). "PFB's State Governmental Relations Director Joel Rotz told the committee . . . "Farmers want one day a week when they can enjoy some privacy, whether it is for religious reasons, quality family time or recreational use of their property."

Dairy Profit Team Program Expanded ( Country Focus , July '05). "The state Agriculture Department's Center for Dairy Excellence has expanded its Dairy Profit Team Program. . . . The program started last year and has a goal of adding 40 farms per year through 2008. Once accepted into the program, farms assemble a 'profit team' . . . In the short term, the team targets areas to improve efficiency and increase profits; while in the long term, they set multi-year goals and implement changes needed to achieve the goals." Information is available at http://www.agriculture.state.pa.us/cde/cwp/view.asp?a=3&q=135061 or by contacting Gary Heckman at 717-346-0849 .

U.S. dairy-consolidation or restructuring? asks Roger A. Cady, Monsanto dairy technical manager, in The Business Advocate online (July '05). "Between 1985 and 1997, the industry lost 169,000 dairies, yet ownership of the first 50 percent of cows remained in the hands of about 14 percent of dairies. That is consolidation. In 1998, changes in market share indicated that consolidation was changing to restructuring. By 2004, the first 50 percent of cows were owned by 7.5 percent of the dairies-or just 5,200 herds. . . . The motivation is complex, but, in short, it is to capture more value for the product, have more predictability with regard to income, and capture economies of size and scale that provide significant ability to control input prices. . . . Restructuring is important for everyone to understand, regardless of herd size, because it helps explain some of the discomfort and disenfranchisement that many producers feel. . . . Dairies with less than 200 cows account for more than 90 percent of U.S. dairy herds. Yet, they own less than 50 percent of the cows. On one hand, they wield power with politicians because of their sheer numbers. But they do not wield the same power with service providers and suppliers." Read the complete article at http://www.winonadailynews.com/articles/2005/07/10/businessadvocate/02dairy7-1.txt

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