Mis-named flu damaging agriculture

Our friends in the hog industry are taking an undeserved hit from the unfortunate label put on the flu that has garnered intense world-wide attention. What's being called "swine" flu actually is a hybrid of viruses.

Generally, viruses are named for where they are first identified such as "Hong Kong" flu or "Asian" flu. The Word Animal Health Organization (OIE) has suggested that the flu be called "North American Influenza." Others have suggested the more technical identification "H1N1 virus."

Public health officials and animal health officials are clear in saying that the flu outbreak has nothing to do with swine . . . either live animals or pork. There has been no evidence of any hog being infected by the virus. In fact, it is not known whether swine even could be infected by the virus intentionally.

Some focus has been put on a Smithfield Foods hog operation in Mexico as being the source of the outbreak. The Mexican government has been testing hogs in that operation.

Several countries have closed their borders to pork imports from Mexico and the U.S. Plus, the word "swine" in the flu's name has made many consumers in the U.S. and Mexico afraid of buying pork products.

As a result, hog prices have tumbled at a time when hog operations were on the ropes financially for many of the same reasons dairy farms are operating at losses.

Any new flu outbreak merits attention and concern, but all needs to be kept in perspective. Typically, about 250,000 people around the world die from one type of flu or another each year.

Four bull proofs slated for 2010

Sire evaluations currently are published three times a year — January, April, and August. In 2010 that will change for one year with evaluations released four times — January, April, August, and December. The extra December evaluation is intended to balance future publication dates moving forward. With that said, there will no longer be January genetic evaluations in 2011, and genetic evaluations will be published in April, August, and December in future years.

That decision was reached earlier this winter when over 100 representatives of national evaluation centers, A.I. organizations, breed associations, and genomic researchers met at an Interbull workshop in Uppsala, Sweden. Interbull is the international body that works to harmonize genetic evaluations across all countries with populations of dairy cattle.

It's all about the economy at National Dairy Leaders Conference

The dairy economy – surviving the current downturn and preparing for what could be a much different financial environment that follows – dominated discussion at the 2009 National Dairy Leaders Conference April 20 and 21 near Denver, Colo.

An audience of some 200 dairy producers, co-op leaders, regulators, and educators was told that the current crisis is more than just another up-down cycle, due to the global recession that triggered it. As a result, economic forecasters generally see a gradual, subdued rebound rather than a quick snapback.

Terry Barr, chief economist for the National Council of Farmer Cooperatives in Washington, D.C., (pictured here) sees financial recovery beginning this summer and modest gains continuing throughout 2010. He warned, though, that consumers could remain cautious about spending for years, and the acceptable degree of debt and leverage has already changed for everyone, including farmers.

For the long term, however, his outlook for U.S. agriculture is positive. “The fundamental fact to remember is that the world will still be resource challenged, and demand for food will continue to exceed supply,” he said.

Marv Hoekema, a dairy financial consultant from Visalia, Calif., said he already sees signs of recovery in the form of tremendously slowing Commodity Credit Corporation purchases and declining inventories of manufactured dairy products. He sees recovery of cheese prices beginning this summer, driven in large part by declines in production per cow. However, he agrees that recovery will be slow and profitability may not return until 2010. He sees Class III milk prices rising above $15 per hundredweight only occasionally during 2009.

Check your score!

Our annual Cow Judging Contest has come to a close. You are probably wondering — how did I do? Well, now you can see how you did by using our online scoring key and reading the judges’ reasons for each class. Hopefully, you saved your placings. Visit us here to see the results and reasons. Add up your total and compare it to the 500 points possible. How close did you come to our contest winner? He had a perfect score.

Organic and robotic

It’s not a typical combination — organic and robotic, that is. But it is the defining characteristics of Village Edge Farms in Nelson, Wis. where organic is high-tech, too. Located along the Mississippi River in west central Wisconsin, the farm is operated by brothers Greg and Dennis Hetrick. Greg says they became interested in robots because they were “tired of milking cows.”

Just last week, we visited Village Edge Farms as part of a bus tour organized by Lely of farms using robotic milking in Iowa, Minnesota, and Wisconsin. Village Edge installed one robot in January of 2009 and one in April of 2009. Though most farmers at each tour stop conceded that the first few days of the robotic setup were challenging for cow training, and nutrition can be a delicate balance when you are offering a high-energy pellet to entice cows into the unit, “I know my cows better now than before,” Greg Hetrick says. The transition allowed Hetrick to get to know cows not just by their udder through a small view in their old parlor. Hetrick now spends more time working closely with individual cows because of the overwhelming amount of information the robotic units tell you about each cow’s health and performance. Milk weights, each quarter’s conductivity, and even the weight of each cow is recorded every time they are milked. The next challenge for the farm: combining robotic cow flow with summer organic grazing. Greg Hetrick is shown in the photo at right sharing with other producers on the tour about his experiences.

Greenhouse emissions create cloud over dairying

If you're both confused and concerned about how this whole environmental sustainability thing will affect those of us in the dairy industry, you are not alone. We've read and heard more on the subject already than we would like to think about, and we still don't feel very informed.

We realize that there is a lot of misinformation out there on this topic. Some of it is from well-meaning people who just maybe haven't had a chance to get all of the facts straight yet (there's a lot that nobody knows at this point), and some of it is from people who are trying to make a buck, either by selling some product or service.

We' re glad that Dairy Management, Inc., and others in the industry are making a serious attempt to put together some sound and needed information through the Innovation Center for Dairy. Among other things, the Center has formed a "cow of the future" working group with the goal of seeing what can be done to reduce methane emissions from our cows (the single largest component of the dairy industry's carbon footprint). DMI CEO Tom Gallagher recently said that cutting the dairy industry's emissions by 25 percent would be equivalent to removing 1.25 million passenger cars from the nation's roads.

In the background of sustainability issues is what kind of public policy will evolve and how that will affect dairying and agriculture and other businesses and industries. Any policies and laws developed will need a strong consensus in Washington because of action taken recently by U.S. Senate. A total of 65 Senators rejected a procedural move that would have limited debate on any "cap and trade" legislation. In other words, any "cap and trade" legislation would need 60 votes in the Senate, not just a simple majority of 50.

That should give some comfort to those in our industry and the rest of the business community that economic impacts will be considered along with environmental impacts as our nation addresses climate-related issues.

Survey reports half of herds use a bull

Just last week we reported beef practices from the recently published results of a survey of U.S. dairy producers by the USDA Animal and Plant Health Inspection Service (APHIS). Results were part of the 2007 National Animal Health Monitoring System (NAHMS).

Another portion of the study surveyed how producers managed reproduction in their herds. Since the first A.I. organization was started in the U.S. during the late 1930s, its use has become seemingly commonplace. Interested in some history of A.I.? The University of Florida has a great website outlining its history.

We’ve shared the dangers of using bulls for breeding on farms for a long time along with many others, but there still is a large number of farms utilizing the practice at least sometimes on their farm. The NAHMS study reports that more than one-half of operations (54.9 percent) had cattle pregnancies conceived through natural service (bull breeding). What kind of farms are these? A high percentage of large operations (71.8 percent) used natural service. Yet, 72.5 percent of all pregnancies in the survey were conceived through the use of A.I.

If you are interested in more of the results from the NAHMS studies, including use of embryo transfer, heat detection and more, visit the USDA APHIS’s website. It’s interesting to see if you are in the majority or minority when it comes to how you get your cows bred.

New sire summaries available

An incredible six-year stronghold of O-Bee Manfred Justice-ET holding the top position as the highest Net Merit Holstein bull came to an end with this April's sire summary. Known to many in the industry as O Man, he now ranks fourth on the Top Net Merit list with a score of 773. And that Net Merit score is quite impressive given the fact he has 45,257 daughters in 7,967 herds around the globe.

It isn't like the apple fell far from the tree this April. A pair of O Man sons overtook their sire for the top spots on the list. Sons Freddie at Genex and Man-O-Man at Accelerated have scores of 905 and 779, respectively, for Net Merit. Look for more O Man sons this August and in forthcoming USDA sire summaries as Freddie and Man-O-Man are just some of the early sons.

To view the complete Hoard's Dairyman Bull List, turn to pages 293 to 296 in the April 25 issue or go to April 2009 Bull List. under Dairyman Extras.

How many cows need to go?

Bidding has been underway for 10 days in Cooperatives Working Together’s herd retirement round No. 7. CWT officials are mum about how many cows they want/need/hope to remove from the national dairy herd, but it’s easy to see the number needs to be much bigger than in any previous round.

Our estimate is 353,970 head that are making milk we don’t have a market for. Fortunately, about one-third of them are already gone.

According to the U.S. Dairy Export Council, foreign sales in 2009 will use approximately 7 percent of all U.S. milk production, versus 10.8 percent in 2008. The 3.8 percent difference times last year’s national dairy herd of 9.315 million cows equals 353,970.

The dairy industry could eliminate that many cows if every herd in the country culled 6.2 extra animals. Another way would be to let fatally low milk prices keep slowly bleeding the entire industry to death. CWT’s latest call for herd retirement volunteers will hopefully be quicker and much less painful. There are at least two good reasons why it may work:

1. Market prices for cows and heifers are much lower than they were last year, so CWT’s resources should go farther than ever before.

2. A big part of the cow removal job was already done before CWT bidding began. According to USDA’s Dairy Market News, total dairy cow culling through March 28 was 114,300 head more than the same period in 2008, and it’s on pace to be 15,000 head higher by the time CWT bidding ends.

That leaves about 225,000 more that need to go. It’s a huge number, but it’s one that looks within reach.

Survey your beef practices

Have you received the April 10 issue yet? It’s the one with the Brown Swiss on the cover. On page 248, our Farm Flash page, we describe a survey of Idaho dairies to determine their beef practices. This survey revealed that 68 percent of producers surveyed used the neck region for IM (intramuscular) injections.

The USDA’s Animal and Plant Health Inspection Service (APHIS) recently released dairy cattle and health management information from its Dairy 2007 National Animal Health Monitoring System (NAHMS). One portion of the information included a survey of injection practices on U.S. dairies. Dairy beef quality assurance practices recommend giving all IM injections in front of the shoulder, as opposed to the hind leg. Hind-leg injections can be costly to the value of meat but are easier and more convenient to give. Yet, as reported in the study, 45 percent of producers still use the hind leg.

Online Surveys & Market Research

Jersey Cow D Supreme Champion

For the first time since 2003, we received a perfect score in the Hoard's Dairyman Cow Judging Contest. This perfect score marks only the 78th time since the contest began in 1931. That is an amazing fact since we have received 5.5 million entries during the past 79 years.

Our perfect entry came from a 15-year-old boy attending high school in Ohio. He placed all five classes correctly which included choosing:
• B as the winner of the Brown Swiss class
• C as the winner of the Holstein class
• D as the winner of the Red and White Class
• A as the winner of the Ayrshire Class
• D as the winner of the Jersey Class

The Jersey was selected as the Supreme Champion by our panel of official judges with the Red and White taking Reserve Supreme Champion honors. The entire scoring key and official reasons can be found on pages 286 and 287 of the April 25 issue.

Entries for the 79th Annual Hoard's Dairyman Cow Judging Contest are coming in strong. Even though the contest closed on March 26, a few entries with good postmarks are still trickling into the office. To date, 25,260 entries have come from all 50 states and the District of Columbia. That's up some 1,500 from last year.

Foremost Farms sells bottling business

Foremost Farms dairy cooperative ended a long run in the bottling business by selling its Waukesha and Ashwaubenon bottling plants to Dean Foods this week. In the acquisition, Dean not only acquired the processing plants that employ 282 employees, but the sale also includes the Golden Guernsey and Morning Glory brands. The plants sold to Deans have been part of Foremost and its predecessor cooperatives for nearly 80 years.

Foremost Farms is the nation's ninth largest dairy cooperative with 2,400 members and 4.697 billion pounds of milk which represents 2.5 percent of the nation's milk supply. In 2008, the cooperative had $1.6 billion in revenue. The cooperative was formed in 1995 when the former Wisconsin Dairies and Golden Guernsey Dairy Cooperatives voted to merge. One year later, the Morning Glory region of Associated Milk Producers, Inc., merged into the newly formed cooperative. It was through those mergers that Foremost acquired the well-known Golden Guernsey and Morning Glory brands.

Foremost officials say the sale allows the cooperative to focus on wholesale markets for cheese, butter, and dairy product ingredients. The cooperative has 10 cheese plants, six dairy ingredient plants, a butter plant, and two farm-milk transfer stations.

Meanwhile, Dean Foods continues to grow its fluid business as the nation's largest dairy processor. Worldwide, Dean ranks fourth for dairy product sales with Nestle (Switzerland), Lactalis (France), and Groupe Danone (France) above it. In the fourth quarter of 2008, Dean posted the strongest quarter in company history with profits of $66.4 million or 42 cents a share. That compares to $32.6 million or 24 cents a share a year ago.

CWT Announces Herd Retirement

Bids are being accepted through Friday, May 1 for the seventh herd retirement round since CWT began operations in the summer of 2003. Jerry Kozak, president and CEO of NMPF, which manages CWT is anticipating a large number of bids. However, since the value of cows and heifers has dropped dramatically, the price level of bids accepted will be much lower than in recent years. CWT has no set target for the volume of milk or the number of cows to be removed in this round.

“Whether CWT will remove a significant number of dairy animals will depend on the number of bids received and the price level of those bids. CWT will not pay more for cows than what they are currently worth in the marketplace,” said Kozak.

As was the case in 2008, in addition to submitting bids for their milk herds, participating farmers will have the option of offering all of their bred heifers at a flat price of $700 per animal. In addition, there are two program rule changes in this round:

1. Members of CWT whose bids were accepted in a previous round may bid again in this round. This is a one‐time exception to the exclusion affecting prior participants in the program.

2. Producers whose bids are accepted in the next and future herd retirements will be paid in two installments: 90 percent of the amount bid times the producer’s 12 months of milk production when it is verified that that all cows have gone to slaughter, and the remaining 10 percent plus interest at the end of 12 months following the farm audit if both the producer and his dairy facility – whether owned or leased – do not become involved in the commercial production and marketing of milk during that period.

Detailed information can be found on CWT's website, including bid forms, an interactive bid calculator to help estimate a farmer’s bid, and answers to frequently asked questions. All bids must be postmarked by Friday, May 1.