May 2006

The Health-Insurance Crunch (BusinessWeek Online, May 22, ’06). “There are 18 million microbusinesses (companies with 10 or fewer employees) in the U.S. . . . 51% of these companies do not offer any form of health insurance, either for employees or owners. . . . many microbusiness owners who do provide medical coverage for themselves and their employees are struggling mightily with costs that tend to increase annually, even twice a year. . . . According to a report issued last year by the Kaiser Commission on Medicaid and the Uninsured, 27 million American workers are uninsured. Of them, 77% hold full-time jobs, and 49% are self-employed or work for small businesses.” The National Association for the Self-Employed (NASE) offers a web-site “microbusinesshealth.com, that includes a free, downloadable guide to health care with plain, easy-to-follow information tailored specifically to microbusiness owners.” Read the complete article at Health-Insurance Crunch.

We need to adjust focus to improve success writes Gary Heckman, Director of the Center for Dairy Excellence, in the guest editorial of Farmshine (May 26, ’06). “There is virtually nothing an individual producer can do to change the base price received for his or her milk this month. Producers have improved their success in situations like this by focusing on things under their control. . . . Focus on managing profit.” Heckman provides “a short list of profit enhancements these producers have focused on boost their success.” A few of the recommendations are: “lowering somatic cell counts to qualify for premiums; improving low solids content (fat and protein) in their milk by adjusting their ration formulation; updating milking procedures to improve milk harvest and reduce SCC; culling unprofitable cows; and special attention to dry and close-up cows so they start the new lactation without problems.”

Virtually all farms, even the largest, are still family (Farmshine, May 26, ’06) “‘Even the largest farms tend to be family farms’ says the 2005 Family Farm Report (Structure and Finances of U.S. Farms). . . . While 98% of all U.S. farms are family-owned, they are organized in different ways. . . This includes: proprietorships, partnerships, or family corporations. . . . Small family farms account for most of the farms (91%), but produce a modest share of the farm output (27%). . . . The shift in production away from small farms is likely to continue, the report says, attributing this trend to negative operating profit margin (on average) and the large and growing share of small farm operators who are at least 65 years old.” The report summary and the full report are available at http://www.ers.usda.gov/publications/EIB12/.

Center for Farm Transitions (Farmshine, May 26, ’06). “Governor Rendell launched the Center for Farm Transitions in January to prepare for an expected turnover of farms throughout the state and to provide farmers with access to resources as they consider all their farming options. The center helps new farmers looking to get started, existing farmers who wish to make changes to their operations, and those leaving their farms due to retirement or the start of new careers. The goal of the center is to keep farming assets in agriculture. . . . The Center for Farm Transistions web site, www.iplantofarm.com, offers information and expertise from a variety of sources.”

Working Together is the message from PA Dairy Stakeholders President Allyn Lamb in the May ’06 News from the Pennsylvania Dairy Stakeholders. Lamb writes, “USDA statistics show that over the three-year period from 2003 to 2005 national milk production increased about 6,677 million pounds. What is remarkable is that California and Idaho combined accounted for 53% of that increase. Pennsylvania contributed only 2%. New York contributed another 2%, so the two large Northeast states contributed only 4% of the total increase. To the extent that there is excess milk production, Pennsylvania and the Northeast are not causing the problem.” Newsletters are posted in PDF format at http://www.padairystake.org/newsletter/.

Five Key Retirement Risks is the “Vested Interest” feature in Lancaster Farming (May 27, ’06). Kevin J. Smith identifies these risks: Longevity, inflation, health care cost, long-term care costs, and death of a spouse. “Outliving retirement savings is the number one financial risk facing today’s retirees. . . . The desired comforts of retirement can easily be disrupted through lack of awareness and inadequate planning in the above areas. Proper preparedness is the key to optimizing your retirement enjoyment and satisfaction. Consult your financial advisor for additional information and assistance.”

What do top managers do right? is a “Profit/Tips” feature in Dairy Herd Management (May ’06). “A recently published survey of high-producing herds in Michigan doesn’t reveal any silver-bullet strategies for milk production. Instead, researchers found that the managers of 18 herds with annual rolling herd averages of more than 28,000 pounds consistently paid a lot of attention to many fine details at once. The diets, nutrition composition and ingredients fed by these herds were not unusual, says Herb Bucholtz, Michigan State University extension dairy specialist. “However, all herd managers emphasized a high degree of daily attention to feeding, nutrition and overall herd management. They managed with a high degree of intensity and paid attention to all aspects of managing the herd.”

Focus on Essential Objectives is the cover story in Dairy Herd Management (May ’06). Author Shannon Linderoth writes, “Determine what’s right for you and your business so you can achieve your own unique business goals and objectives to address those factors. . . .” Suggestions include: “Take time to ponder goals; Make sure that your business goals and personal goals mesh; and Prioritize your goals.” The article concludes, “While this process will help you narrow your list, you will still probably have anywhere from seven to 10 or more of these goals to address. Don’t attempt to deal with all of them at once. Pick three to get started.” Read the complete article at http://www.dairyherd.com/directories.asp?pgID=724&ed_id=5413.

Accomplish Your Essential Objectives by Shannon Linderoth (Dairy Herd Management, May ’06) is a follow-up to Focus on Essential Objectives (above). “Once you’ve made the time and effort to set goals, it would be a shame to stop there. You must take that next step.” Once you have a goal in mind to focus on, the next steps are: “identify performance gaps; choose the best method for change; determine deadlines; enact your plan; and focus on continuous improvement.” Read the complete article at http://www.dairyherd.com/directories.asp?pgID=724&ed_id=5411.

Are you considering tunnel ventilation? Asks “Hoards has heard. . .” (Hoard’s Dairyman, May 25, ’06). “One resource to check out is the on-line tool available through Cornell at www.prodairyfacilities.cornell.edu that includes fan performance data from over 140 different models. The program allows the user to determine how many fans they will need to properly tunnel ventilate their barn and how much milk production they will have to gain to make it a profitable investment.”

Resources for long-day lighting are featured in the “Profit/Tips” section of Dairy Herd Management (May ’06). “You have heard about long-day lighting and how it helps improve milk production. Here are some resource materials: A publication entitled, ‘Supplemental Lighting for Improved Milk Production’ uses drawing, along with practical descriptions, to explain correct selection and placement of light fixtures in barns. . . . Online ordering information is available at http://www.nfec.org/material_to_order/energymgmt.htm. For information on the science behind long-day lighting, as well as advice on the number of light fixtures required, go to: www.traill.uiuc.edu/photoperiod/home.htm

Manure-Handling Choices Require Money and Patience is an “Editorial Comment” feature in Hoard’s Dairyman (May 25, ’06). “Current manure-handling options feature much of the same technology being tried decades ago. Yet, we really haven’t identified effective, workable solutions, let alone any that provide a return on investment. . . . Unfortunately, it still seems like it is most practical to make a hole in the ground (lined, of course), fill it with manure, empty it a couple of times a year, and hope for the best. But, we can’t just keep doing this, especially on larger dairies. Despite this bleak outlook, we do owe gratitude to those dairy owners and other entrepreneurs (and state and federal agencies) that have put money and time into untested manure treatment systems. We see few clear answers to the manure problem surfacing. But, at least, we as an industry are learning a little more about our options.”

Don’t let hard financial times be a killer says Lorraine Merrill, the “People’s Side” columnist for Hoard’s Dairyman (May 25, ’06). “Hard financial times in agriculture bring higher rates of deaths, injuries, and physical illnesses among farmers. . . . Suicide rates are higher in rural America. Farm men are at twice the risk for suicide as the general population, with much higher rates in times of crisis. . . In the 1980s farm crisis, suicide rates for farm men spiked three to four times the national average. . . . The epidemic is silent because of the stigma surrounding suicide and the pain and confusion borne by families, friends, and neighbors. . . Yet, 50 percent more suicides than homicides occur in the U.S. every year. . . Hopelessness is the biggest warning sign. . . . Alcohol is strongly associated with suicide. At least 90 percent of suicides have it in their blood. . . Getting help and preventing suicide is important for the whole family and community. Rather than ending suffering, suicide only makes it worse.”

Transferring the Farm by Vern Grubinger (Farming, May ’06) recommends, “To get where you want to go, each generation has to identify their goals. For the older generation these may include providing security in later years, minimizing estate taxes, helping the next generation get into or stay in farming, and conserving the land for future generations. The younger generation may have the same goals, or not. Some heirs may want to develop land for cash. Others may want to farm the land or have it farmed by someone else. . . . If goals aren’t thought out, solutions agreed upon and put firmly in place, then the transfer process probably won’t succeed. . . . Links to more information on estate planning and farm transfer have been compiled by the University of Connecticut at www.canr.uconn.edu/ces/frm/estate_planning.html.”

EPA has hit a Texas dairy with $160,000 in fines notes the “Hoard’s has heard. . .” column (Hoard’s Dairyman, May 10, ’06). EPA fined the dairy and “required the owner to spend $100,000 more in environmental improvements to his farm for past violations of the Clean Water Act, according to an article in Country World. The farm, located just north of the Red River near the Texas-Oklahoma border, was previously one of the largest dairies in the world when it was at its capacity in 2000. . . . In January 2005, the farm sold more than 4,500 head of milk cows over a four-day event. Currently, the farm milks about 200 cows.” Read more at the Country World website, http://www.countryworldnews.com/Editorial/CTX/2006/ct0406dairy.html.

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