November 2005

Collins says farm income to stay high (Feedstuffs, Nov. 21, ’05). In testimony before the Senate Agriculture Committee on November 9, Dr. Keith Collins, chief economist for USDA, said 2005 net cash farm income will be second only to 2004. . . . Agriculture’s overall financial strength is indicated by this year’s debt-to-asset ratio, which is expected to be the lowest since 1961.”  Dr. Collins’ complete testimony is available online at http://agriculture.senate.gov/Hearings/hearings.cfm?hearingid=1675&witnessId=2169.

Edible, Water-Resistant Film from Milk Protein (Agricultural Research, Nov. ’05). “A new process to continuously make films from a milk protein could lead to edible, water-resistant coating on several products commonly found in grocery-store dairy aisles. The process uses the unique characteristics of casein. . . . Casein films could be produced as stand-alone sheets or as thin coatings that could adhere directly to a product. Either form would act as a barrier to outside substances while protecting a product from damage or contamination. The edible film locks in moisture, so it may be used to coat dairy food products, such as cheese, or as part of a laminate in packaging for cottage cheese or yogurt.” Read the complete article at http://www.ars.usda.gov/is/AR/archive/nov05/milk1105.pdf.

Creating employee job descriptions “just got a lot easier with a new on-line tool available from Penn State Dairy Alliance,” notes Hoard’s Dairyman (Nov. ’05). “The Job Description Generator allows dairy farmers to customize a job description for their dairy without having to write it out themselves. . . . The Job Description Generator can be found at www.dairyalliance.org/hr/personnel.

Pennsylvania has good news on dairies reports the “Dairy Edge” feature in Northeast DairyBusiness (Nov. ’05). “Pennsylvania dairies that completed the Dairy Profit Teams’ 12-month pilot program increased profitability by an average of $70,000 pr farm in one year, according to the state’s Center for Dairy Excellence. . . . The dairies increased their herd size by 7.2%, increased production per cow by 16.7% and shipped 24.9% more milk during the first 12 months of the program vs. the previous year. . . . And more good news: Pennsylvania dairy producers generated an additional $5.5 million of profit in July by topping last year’s production by 7%. Total production reached 903 million pounds.”

High gas prices may start to affect employees notes the “Profit/Tips” section of Dairy Herd Management (Nov. ’05). “If gas prices remain much above $2 after the first of the year, employees with a long commute will start rethinking their employment options . .  . . Employers basically have two options. The first is to do nothing. If you have a ready supply of available employees locally, high fuel prices may not be a concern. If, however, you have employees driving long distances to get to work, you could consider paying all employees a ‘fuel surcharge,’ when gas prices are above a pre-determined level.” The article notes that the fuel surcharge “may be $20 per week or $50 a month. But it needs to be paid to all employees, regardless of how far they commute.”

Is Your Lender Keeping Score? asks Dairy Herd Management (Nov. ’05). “Credit scores have been used routinely in the consumer arena for car and home loans for years. And now, their use in agricultural lending is on the upswing. . . . The three major credit bureaus . . . use three-digit Fair Isaac Corporation (FICO) scores to determine your personal, or consumer, credit rating. . . . Lenders use credit scores because they provide an objective means to evaluate loan applications. They can help lenders evaluate whether your business can make money with some else’s money. . . . If your business is a sole proprietorship, then your personal credit score applies to your dairy business. . . . But, it is not unusual for lenders to ask to see personal credit scores for business partners as part of the loan process. . .” Read the complete article at http://www.dairyherd.com/directories.asp?pgID=724&ed_id=4877 (registration required).

Research can hold hidden agenda, biases is an editorial in Feedstuffs (Nov. 7, ’05). The editor comments on a recent meeting of the Association of Food Industry Suppliers that explored “which new products and product categories hold the greatest potential for the U.S. meat and milk industries.” Alex Avery of the Center for Global Food Issues stressed “it is important for . . . consumer-related trends to be viewed with a bit of skepticism . . . . As an example of how trends can be easily misconstrued, Avery pointed to a report some consumer analyst groups interpreted to show the emergence of a ‘booming’ market for organic milk. The report. . . showed the market for organic milk growing 566% from 1997 to 2002, but applying the corresponding percentage in regard to market size and the growth pattern is much less dramatic—from less than 0.2% of all milk sales to a mere 0.8% for the period.”

Ruling hits dairy hard reports Feedstuffs (Nov. 14, ’05). “In a legal decision issued Oct. 27, the administrative law judge at USDA found that H.P. Hood, maker of Carb Countdown milk beverage, was paying farmers too much for the milk used to produce the product. USDA priced Carb Countdown as a Class I product, meaning H.P. Hood was obliged to pay producers the highest value for milk under the Federal Milk Marketing Order system. Hood argued that USDA was miscalculating the level of milk solids in the product and that because the level was actually below USDA’s solids threshold for Class I beverages, its product should be priced at the lower Class II level. The USDA judge last week agreed with Hood’s petition, and Hood will now be refunded millions of dollars—money that will be deducted from the milk checks of farmers in regions where Carb Countdown was processed.”

A banker’s view on culling by Gary F. Sipiorski (Hoard’s Dairyman, Nov. ’05) says, “High cull rates mean loss of collateral. That’s the banker’s bottom line interest in cull rates. . . . Cows are revenue generators. . . . The cash flow pro-forma that was completed to help secure the loan is directly dependent on two factors: production per cow and on the number of cows in the milking herd. . . . There have been discussions by industry leaders to place less emphasis on culling rates and more focus on just replacing poor performing cows. The concept is correct in replacing low production cows with better ones. Even if you have to pay high replacement prices, higher-production cows are always a better choice. However, dairy operations that can avoid higher culling rates with less purchase or replacement cattle will always have the edge on the higher replacement units. . . . Producers that can maintain lower cull rates under 35 percent will find greater long-term financial progress.”

Is It Time For Pennsylvania Dairy Producers To Begin More Crossbreeding? asks Penn State Assistant Professor Chad Dechow in the Lancaster Farming Dairy Plus publication  “A Focus on Genetics” included in Lancaster Farming (Nov. 19, ’05). “Reports of successful producer experiments with crossbreeding have sparked an interest in the potential of crossbreeding for commercial dairy herds. . . . Producers need to view this preliminary data with caution. There were fewer than 200 cows in any of the crosses and records were not 305 day lactations . . . . The most important factor that will determine the success of crossbreeding is sire selection.  It is critical to continue breeding cows (even crossbred cows) to the best pure-bred AI sires available. Hybrid vigor cannot compensate for poor genetic merit.”  This article was published earlier this year in the Penn State Cooperative Extension Capital Region publication Dairy Focus and can be read in full on the Internet at http://capitaldairy.cas.psu.edu/Newsletters/2005/June%202005%20Dairy%20Focus.pdf.

Congress to Again Tackle Budget Reconciliation Package reports the News for Dairy Co-ops (National Milk Producers Federation, Dec. 8, ’05). “Members of the House and Senate have returned this week to Washington to begin hammering out a conference committee report that will trim future federal spending. The same House-Senate conference report also may contain a two-year extension of the Milk Income Loss Contract program. Prior to leaving Washington last month for the Thanksgiving recess, House Speaker Dennis Hastert told his colleagues . . . that he supports an extension of the MILC program, even though the House's version of the budget bill does not feature the extension. The Senate's budget reconciliation calls for a MILC extension, albeit at a lower payment rate than the program that existed prior to Oct. 1, 2005.” The article appears at http://www.nmpf.org/newsletter/articles.htm.

Business Planning Assistance Program Available for Dairies “to investigate the profitability and future of their business by developing a business plan or feasibility study,” reports Lancaster Farming (Nov. 12, ’05). “Thanks to the continued financial support of the Appalachian Regional Commission and the Pennsylvania Department of Agriculture, the Pennsylvania Dairy Stakeholders has provided more than $89,000 to 66 dairy farm businesses through the BPAP, resulting in the retention and creation of 484 full- and part-time jobs. . . . Pennsylvania dairy producers who would like more information on the Business Planning Assistance Program should contact Alan Bair at 717-948-6328 or abair@padairystake.org.”

Growing Pennsylvania’s Dairy Industry was the focus of Secretary of Agriculture Dennis Wolff’s “Plans for Pennsylvania” column in Lancaster Farming (Nov. 5, ’05). Sec. Wolff discusses the “tremendous potential for growth” of the dairy industry in Pennsylvania. “One item that we are all proud of is that Pennsylvania has seen 12 consecutive months of milk production growth during the last year.” He goes on to “highlight the steps we have taken to propel Pennsylvania’s dairy industry forward” including profit teams, the Northeast Dairy Outlook Forum, “Grow the Milk Check. . . Grow the Profitability” forums, Dairy XP, and the new Top Ten! slogan. He concludes by saying, “I firmly believe that we will make our 10.8 billion pound goal by 2008 or sooner, and fulfill the mission of the Center for Dairy Excellence: empowering people, creating partnerships, and increasing the availability and utilization of resources to enhance profitability of the dairy industry.”

Penn State NEEDS Program to Focus on Precision Feeding, No-Till (Lancaster Farming, Oct. 29, ’05).  “Dairy nutrition and feeding management practices are now becoming an integral component affecting nutrient management. . . . Penn State Cooperative Extension’s Dairy and Livestock Nutrient Environmental Educational Days (NEEDS) will not only address precision feeding, but evaluate the environmental and economic impacts based on herd size, crops grown, and soil phosphorous levels. The emphasis will be to examine both grass- and alfalfa-based feeding systems and their potential influence on ammonia emissions, milk urea nitrogen level and income over feed costs.”  The program will be held at various locations around the state in 2006.  Learn more by clicking on the Dairy Alliance website:  http://dairyalliance.psu.edu/nm/programs/.

Farming can be great; just don’t die there says Charles E. Gardner, D.V.M, in the “Dairy Business” column of Hoard’s Dairyman (Oct. ’05). “Some of the things I have recently observed include uncovered live electrical boxes, unguarded openings to manure pits, people working at the face of unstable trench silos, children riding on tractors, and bulls being treated without regard to their danger. . . . Take a slow walk around your facilities, and look for materials or conditions that present a risk. Better yet, have a farm advisor or someone who doesn’t see the farm every day take a fresh look for safety hazards. Make changes as needed. Then follow the guidelines listed . . . at www.osha.gov/OshDoc/data_General_Facts/farm-facts-factsheet.html.”

CWT Should Provide Less Downside Price Volatility is an “Editorial Comment” in Hoard’s Dairyman (Oct. ’05). “A by-product of the CWT program may be that we see some higher upside peaks. But we don’t expect a repeat of last year’s extraordinary $20.58 soon. More importantly, CWT should prevent the disastrous lows we saw in between 1999 and early 2003. The result should be less top-to-bottom volatility. Ultimately, this could be good for everyone in the dairy industry.”

Archived News Articles

2007: Current
2006: Jan | Feb | Mar | April | May | June | July | Aug | Sept | Oct | Nov | Dec
2005: Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec
2004: May | Jun | Jul | Aug | Sep | Oct | Nov | Dec