September 2004

Should You be Raising Your Own Heifers? asks a University of Georgia dairy scientist. In an article partially reprinted in Hoard’s Dairyman (Sept. 25, ’04) and available on the internet, John Bernard details “some aspects that producers should consider even if they think their current replacement heifer program is fine. . . . First, . . . producers should evaluate the mortality rate, growth rate, age eligible for breeding, calving age, post-calving weight total cost, and first lactation milk yield for their operation. There are several standard values that can then be used as a benchmark or goal . . . . If an analysis of the replacement heifer program indicates problems, it would be wise to make improvement in the management and/or facilities or consider contracting with someone to grow the heifers for you. Second, are the resources used for replacement heifers making the best return on investment? . . . Unfortunately, many producers have not calculated their total cost of raising replacement heifers or undervalue their resources. . . . As dairy producers look to improve their bottom line, they should evaluate their heifer programs.” Read the complete article at http://www.ces.uga.edu/Agriculture/asdsvm/dairyscience/2004MayJune.pdf

How to pay children for the work they do on your family farm is featured in the September 25, 2004 edition of Hoard’s Dairyman. The article interviews three farm business advisors about issues around paying young adult children for their work on the family farm. They “recommend dairy owners pay their children market-rate wages, with clearly defined job descriptions. . . . Defining pay and benefits is the next step. Put a dollar value on all perks and fringe benefits. Much conflict can be avoided by talking up front about issues like who gets gas out of the farm pump. . . . Several approaches are possible to put a value on room and board.”

Gov. Rendell Signs Legislation Protecting Milk Payments. After “the parent company of a dealer licensed to purchase milk from Pennsylvania farmers filed for bankruptcy, creating concern that dairy farmers might not get paid for all the milk produced and shipped to the dealer” the Milk Producer’s Security Act was amended requiring “new dealers to post a bond . . . equal to 75% of the highest aggregate amount owed by the dealer to producers for a 40-day period during the preceding 12 months. It also forbids any new participation in the 30% bond and security fund option previously available under current law.” Country Focus, PA Farm Bureau, Sept. ’04.

Farmland Values Jump. “Farm real estate values nationwide jumped 7.1% from Jan. 2003 to Jan. 2004—the largest percentage increase since 1994” and the largest dollar increase ($90/acre) since 1980. “The average value of cropland in Pennsylvania increased by 7% to $3,750. The increase is attributed to a combination of factors including lower interest rates, a high production of commodities on the farm and a strong demand for farmland for uses besides agriculture. Nationwide, ag land with the potential for immediate development was valued at $5,700 per acre.” Country Focus, PA Farm Bureau, Sept. ’04.

High Tech AG in China is the focus of September’s edition of New AG International. China has nearly 1.3 billion inhabitants with an average age of 32 years. It is “a country slightly smaller than the USA in size, with an extremely diverse climate – tropical in the south to sub-arctic in the north. . . In late 1978 the Chinese leadership finally began moving the economy to a more market-oriented system. . . . The result has been a quadrupling of GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2003 stood as the second-largest economy in the world after the USA, although per capita the country is still poor. Agriculture and industry have posted major gains especially in coastal areas near Hong Kong, opposite Taiwan, and in Shanghai. . . . China has no choice but to increase productivity and go High Tech.”

Where costs may rise in '05 is reported in a September 16 article on CNN Money online. “The annual inflation rate, as measured by the consumer price index, is currently around 3 percent. . . . But when it comes to a lot of the recurrent and critical costs in your life, the price hikes are often steeper than inflation. . . . taken together, the hikes can take a notable bite out of your bottom line.” The article notes “six areas where you're likely to see costs rise in 2005”: health insurance; heating bills; college tuition; homeowners and auto insurance; interest rates and new home construction. Read the complete article at http://money.cnn.com/2004/09/15/pf/costrise_2005/index.htm
Resource Guide Available (Farmshine, Aug. 20, 2004). “An online resource guide for new or expanding dairies is available to producers and their advisers. The Dairy Farm Planning Resource Guide, a collaborative effort of the Pennsylvania Dairy Stakeholders, Dairy Alliance and various industry members, is located at http://dairydevelopment.psu.edu. The guide lists names, companies and contact information for various consulting entities within the region. It also provides links to other valuable informational sites.”

Agricultural Innovation Center Open for Business reports AgSciences 2004 (Penn State, Sept. ’04).”Help is on the way for innovative Pennsylvania agricultural producers looking beyond the gates of their farms for increased revenue from ‘value-added’ products and community-based local sales and marketing. The Keystone Agricultural Innovation Center—a joint effort of Penn State’s College of Agricultural Sciences and the Pennsylvania Department of Agriculture—is open for business. . . . Satellite offices of the Pennsylvania center are located at Penn State Cooperative Extension offices in Blair, Cumberland and Lebanon Counties. . . The Keystone Agricultural Innovation Center will help the Pennsylvania Department of Agriculture fulfill its mission to keep Pennsylvania farmers on the cutting edge of new opportunities, believes, Dennis Wolff, secretary of agriculture.” To read the complete article, download the September AgSciences newsletter in .pdf format at http://www.aginfo.psu.edu/newsletter/2004sep/ag2004sep.pdf.

Dairy in Pennsylvania: A Vital Engine for Economic Development

For many Pennsylvania communities an important opportunity for economic growth lies right in their own neighborhood. Dairy is a homegrown industry that already makes a significant contribution to the state’s economy, but it also can help drive local economic development. ... click here to read this article.

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