Got debt? Milk giant downgraded

May 26th, 2005 Alan Guebert

The finances of Dairy Farmers of America are souring faster than cream in a July sun, according to a May 9 Moody’s Investors Service report.
The giant, farmer-owned dairy cooperative marketed 33 percent of the nation’s fluid milk last year.
Even worse, at least for its 22,000 dairy farmer members, is that the service said the best strategy to clean up the mess is conserving cash for DFA to “restrict payments to members in order to conserve cash for debt service.”
Great. It’s another Kansas City-based agriculture cooperative – recall Farmland Industries? – whose farmer-members now face the likelihood of paying off big debts gained by their big-dreaming, big-spending hired hands.
It’s a familiar hymn – an all-too-familiar, sad hymn – these days.
Farmers form a cooperative to gain marketing power. Success brings size. Size brings “professional” managers and, before long, the pros convince members to move into areas where members have no ability or interest – usually processing.
Then come mergers, bond offerings, maybe a legal tangle, more debt, a market reversal or two, and pretty soon you have a Moody’s report warning the world of “a decreased likelihood that investors will receive their principle and interest in full and on time.”
In a nutshell, that’s the cooperative’s short story.
Cooperative history. DFA’s birth in early 1998 had few merits other than scale.
Three of its four merging members, Milk Marketing Inc., Western, and a large portion of AMPI, brought more debt into the deal than dollars.
Its fourth and biggest player, MidAm, and MidAm’s charismatic leader, Gary Hanman, predicted the cooperative would be a dairy superstar.
With control over one-fifth of the nation’s fluid milk, Hanman envisioned the cooperative as a national and international powerhouse in milk marketing, processing and exporting.
Hanman’s dream became a reality because Hanman became the DFA’s boss.
Bad moves. Since 1998, the cooperative has used joint ventures, vertical integration, buyouts and, said the U.S. Department of Justice, a tangle of questionable tactics to become the dominant U.S. milk seller and a major player in the cheese market.
The maneuvering, however, never brought the promised profits.
According to Peter Hardin, editor and publisher of The Milkweed, a monthly dairy marketing report, the big co-op was “built on a cracked foundation.”
“When times are good for its dairy farmers,” as in the past two years with record or near-record milk prices, explained Hardin, “DFA’s processing subsidiaries can’t make money. To make money, DFA needs low milk prices because DFA is really a processor.”
“Low milk prices, though, are exactly what the farmers don’t want,” said Hardin. “In essence, DFA is competing against DFA.”
Moody’s May 9 report concurs:
“(A)s DFA’s investments in bottling affiliates have increased and its branded dairy foods business has grown, its earnings have become . . . negatively impacted . . . hence lower core earnings.”
Recent market moves by the cooperative only added to its woes.
In 2004, DFA bought hundreds of tons of cheese on the open market to hedge against what it believed would be higher milk prices, the key cost to its cheese plants.
The trouble was, notes Moody’s: “When prices for those materials fell, DFA incurred large inventory losses. This event not only highlighted the increased price risk that DFA’s business now faces, but also the cooperative’s poor risk management and hedging ability.”
Bad ending? The blunder reminds Hardin of Hollywood.
“You’ve heard of the movie, The Gang that Couldn’t Shoot Straight. DFA is ‘The Gang that Can’t Milk a Cow Straight.’”
Straight or otherwise, DFA’s troubles may compound before they climax.
According to published reports, the U.S. Department of Justice’s Antitrust Division is investigating allegations that the cooperative used its market clout to influence raw milk prices – push prices lower, claim affected farmers – in regions around the nation.
Should the cooperative’s financial cheese thicken, its members may take the biggest hit, notes Moody’s, because the cooperative’s, “bylaws dictate that payments to third party creditors, including debt service, have seniority over payments to members for milk.”
That ending also sounds familiar.
Just ask Farmland Industries members.
(Alan Guebert’s Farm and Food File is published weekly in more than 75 newspapers in North America. He can be contacted at agcomm@sbcglobal.net.)

Farmers question milk price volatility

April 28th, 2005 Former Farm and Dairy Reporters

SALEM, Ohio – Ohio and New York farmers visited the Chicago Mercantile Exchange April 18 and demanded greater transparency into who is trading in the market and how it’s affecting dairy prices.
Five people from the dairy industry talked with nine executives about how trading on the Chicago Mercantile Exchange (CME) allegedly hurts dairy prices, according to New York dairy producer John Bunting, who was part of that meeting.
A small group also stood outside, some wearing cow costumes, protesting the CME, Bunting said.
Buyers, sellers. Although the CME told him there are as many as 12 buyers and sellers, Bunting said there are only a few major players who manipulate the market.
This is a threat to the system, he said.
The CME does not tell the public who is buying and selling, Bunting said; if it did, it would be obvious that these few buyers and sellers cause milk price volatility.
“The sham would be revealed,” he said.
“They artificially create volatility to drive large farms to future contracts set at a lower price.”
Investigation? Ohio Farmers Union President Joe Logan furthered this point in a letter to the Commodities Futures Trading Commission
, asking it to investigate the CME.
Dairy futures contracts are promoted as a way to limit farmers’ risk when milk prices are low, Logan explained. Many of these contracts are based on prices established on the CME, he said.
“Under these circumstances, it is understandable that an intentional manipulation could work to the advantage of one of several market players with heavy investments in dairy futures contracts,” Logan said in the letter.
The CME released a statement April 18 saying its market regulation department monitors its markets. It also said the CME “strongly believes in the integrity of all of its markets, including the spot dairy market.”
First step. “We’re heading for a cliff. It’s not a matter of if, it’s a matter of when [farmers can't make it anymore],” Bunting said.
“The sooner we make corrections to policy – so capitalism stops and hard work pays off – the better off we are.”
He said the meeting with CME officials asking for transparency went well.
The tone was cordial, not adversarial, and he said he expects a positive result.
“This is the first step, so hopefully this will reveal to the whole world that there needs to be a new [dairy pricing] system.”
Setting the price. Although less than 1 percent of all dairy commodities traded nationwide occurs at the CME, these cheese sales set the raw milk price for farmers across the country.
“[These major companies] are making a ruse of trading the cheddar,” Bunting said. “The dollar value of what’s being traded has no impact on supply and demand.
“If [supply and demand] don’t impact each other, there are ulterior motives.”
Analyst opinion. Jerry Dryer, editor for Dairy and Food Market Analyst, said he’s heard these grumblings before, but no one has come up with an alternative.
“Day in and day out, [the CME] works fairly well,” he said.
Part of what makes it work is the autonomy, he said.
“Now [prices] are ticking down. If everyone knew who was selling and easing the market down, people would be screaming at them and giving them a black eye.”
(Reporter Kristy Hebert welcomes feedback by phone at 800-837-3419, ext. 23 or by e-mail at khebert@farmanddairy.com.)

Dairy inspection: PASSED

March 10th, 2005 Former Farm and Dairy Reporters

SALEM, Ohio – Wearing green muck boots and carrying a clipboard, Connie Oshop-Keith opens the milkhouse door.
A man in manure-splattered coveralls greets her with a scowl. “What are you going to find wrong today? We just shined everything up. We spent all day yesterday cleaning for you.”
It’s just the scared, hostile remark a milk inspector expects to hear as she investigates to see if there’s any reason to reject this farmer’s milk. Manure caked on the bulk tank? insects hovering in the air? wastewater pooled around a drain? … things that make farmers’ hearts harden when they see the milk inspector pulling in the drive.
But the man in the coveralls breaks into a grin and Connie laughs.
“You guys like to give me a hard time,” she says, shaking her clipboard at him.

* * *

If Connie’s job as an inspector tied her to that clipboard and checklist every day, she would’ve been back to milking her own cows long ago.
“We could just buy their milk and leave them on their own,” she said. But that’s not how it works for her and that’s not how it works for her employer, Schneider’s Dairy in Pittsburgh.
Connie, 46, is required to make only two trips to her farms each year for inspections, but that doesn’t stop her from dropping by other times as well. She brings farmers information on the latest programs, she arranges workshops with experts, she pushes producers toward innovation, she agonizes over their numbers and she thinks up ways for them to improve.
And she looks out for them, making their official inspections as painless as possible. Each time she visits, whether it’s to drop off a pamphlet or to check on their expansion, she glances around and lets them know what to fix before inspection time.

* * *

But that doesn’t mean Connie isn’t tough with that clipboard.
As she enters another milkhouse in western Pennsylvania, she takes a quick look around.
It’s like a house, she says. If the kitchen is clean, you assume the food will be good. The same is true here, she continues. If a farmer cares enough to keep his milkhouse clean, he’ll care about the other details, too.
She carefully inspects any equipment that may come in contact with the milk. Is it clean? Are the gaskets rusting? Are there old soda cans or tools or other unnecessary items sitting around?
She moves on to the barn. Are the cows clean? Comfortable? Do they look healthy? She pays particular interest to the calves.
“I hate seeing dirty calves because they’re the farmer’s future,” she says.
She opens the refrigerator and cupboards. Are all the drugs labeled and stored correctly? What about sanitizers?
She jots notes, signs her name, explains what needs fixed, questions if they need help. She puts down her clipboard and asks if they’ve signed up for the new Johne’s program yet, hands them brochures for a workshop, forewarns them about animal ID and then asks about their children.
“We take her advice pretty seriously,” says farmer Dean Kind. “She looks at us as one team, not like we’re on separate teams.”
Connie figures if she works with the farmers to help them increase their production and improve their milk quality, it will only pay off for Schneider’s.
And she can’t do that simply by making checks on a list.

* * *

It’s been more than 20 years since Connie bought her first “livestock.” It was a goat and when she brought it home and let it loose in the yard, it ran away.
After spending an entire day chasing it down, Connie decided it needed a friend and thought a horse would be perfect. But after she spent $500 on a 10-by-12 building, she realized she could fit a second horse in there, too.
Once she had the two horses and goat, she changed her mind and thought the building was too small. So she moved to a bigger parcel in Petersburg, Ohio, and got four more horses.
One day, she walked to a neighbor’s dairy farm. She’d never seen a cow so close and she fell in love with those dark doe eyes. It didn’t take long before she came home with her own newborn Jersey in the cab of her truck.
Two years, she thought, I have two years until I need to start milking. She went to work setting up a milking operation and buying heifers.
But Connie didn’t know the first thing about milking or farming or cows in general. So she visited dairies in the area. Teach me everything you know and I’ll be free labor for two weeks, she told them.
She spent the next nine months picking up tips from area farmers and fine-tuning plans for her own operation.
Two weeks after the birth of her third child, Connie began milking her 12 cows and quickly built up to 70.
Years later, Connie got a divorce and, with five young children, decided to sell her herd. But she wasn’t about to leave the dairy business.
Instead, she spent the next few years working as a herd manager for two farms in western Pennsylvania.
Finally, in the mid-1990s she got her milk inspector’s license and will celebrate her sixth anniversary at Schneider’s Dairy this year.

* * *

Connie could easily make two stops a year at each of her 100 farms, look over their equipment, fill out her sheet and forget about them until there was a problem.
But that isn’t the way she works.
When a new Johne’s program was introduced, western Pennsylvania vets were going to have to travel several hours to attend the required program. So Connie and her company paid for local training for nearby veterinarians.
When a dairy tour was planned for eastern Ohio, Schneider’s picked up the tab for its farmers.
When dairy beef quality assurance became an issue, Connie planned a workshop for her producers.
When a farmer is expanding or buying new equipment, Connie offers to bring in a vet or engineer or builder to give free advice.
Although she acknowledges Schneider’s didn’t operate this way before she started, she refuses to take credit for the turnaround. Her boss, however, says otherwise.
Connie was exactly what we were looking for, said vice president Bill Schneider Jr.
“Our whole raw milk program is enhanced because of her,” he said. “She continues to flourish. As far as programming, we’re the most progressive in Pennsylvania.”

* * *

Connie knows when some inspectors walk into the milkhouse, their farmers immediately remember every improvement they’ve been meaning to do, every speck they probably didn’t clean that morning.
But she strives to overcome that image.
“I want to live by these standards every day, not just at federal rating time,” she said. “Sometimes that’s a hard mentality for [the farmers].”
By now, though, most of her producers are used to it.
“I’m critical of what I want, but I’ll work with them to do it,” she said.
For example, the somatic cell count legal limit in Pennsylvania is 750,000, but that’s not good enough, she says.
The United States is the only country with a limit that high and it should be lower, she said.
When Connie started at Schneider’s, their farms’ average count was 550,000, but now it’s under 300,000, she said.
Still some farmers don’t understand why a higher number isn’t OK as long as it’s legal.
It affects the shelf life, more additives have to be used, and the state penalizes you, she tells them.
Let me come and sample your cows and send away for results and work with a vet, she says.
“We’re not telling them they have to change on their own, we’re saying we’re here to help.”

* * *

Driving 700-900 miles a week visiting farms from State College, Pa., to the Ohio border could wear Connie out.
But her five children, grandson and new husband, Penn State Extension dairy educator Rodger Keith, keep her life balanced.
When she gets up at 4:30 a.m., she looks forward to the day ahead. And when she comes home at night, she tells her children, “I don’t care what you do, I want you to wake up with a passion.”
Connie’s farmers know all about her passion – and it’s not found in checklists or rules or black X’s.
It’s illustrated by the days she can leave her clipboard in the car and talk farming instead.
(Reporter Kristy Hebert welcomes feedback by phone at 800-837-3419, ext. 23 or by e-mail at khebert@farmanddairy.com.)

Ohio Farm Bureau delegates reshape policy

December 11th, 2003 Susan Crowell

COLUMBUS – Ohio Farm Bureau delegates got back to basics at the farm organization’s annual meeting last week, approving major changes in their policies toward land and water.

The 85th annual meeting was held Dec. 3-5 in Columbus.

Members revamped the farm group’s line fencing policy, and added new policy regarding water use and drainage.

Looking ahead. Farm Bureau leaders also announced the start of a “Future of Ohio Agriculture” study, hoping to uncover agriculture’s future within the Buckeye State and the role Farm Bureau should play.

“Each of us has the opportunity and obligation to make sure that in the next 10, 20, or 30 years, we still have agriculture in Ohio,” said Jack Fisher, Ohio Farm Bureau executive vice president.

“The cards are stacked against us.”

Fisher said the study will create Ohio’s “ag road map” and added the Farm Bureau is ready to “take the lead in strategic planning for Ohio agriculture.”

Line fences. In one of the more heated exchanges of member opinions, delegates overturned the state Farm Bureau’s long-standing policy regarding line, or partition, fencing.

State law currently requires owners of adjoining lands to equally share the building and maintenance of all line fences between them, unless otherwise agreed.

Saying the current fence law isn’t working, Farm Bureau delegates approved policy that supports a change in Ohio law.

Shift burden of proof. The members’ proposal shifts the fencing responsibility to the landowner requesting the fence, unless he can show that the adjoining landowner has livestock on the adjacent property or would receive another benefit from the fencing.

Township trustees would retain oversight of line fencing, a responsibility many trustees would like see go away.

Call for study. After sleeping on their decision, however, Farm Bureau members returned to the issue before adjourning the next day.

Monroe County delegates requested the state board convene a fencing task force to study the issue before acting on the policy.

Ohio Farm Bureau President Terry McClure agreed to the delegates’ request.

The issue is already moving to the legislative front burner, according to OFBF Director of Local Affairs Larry Gearhardt.

In the last General Assembly, state Rep. Merle G. Kearns introduced a bill that would have repealed the partition fence law altogether.

Drainage. In other debate, delegates amended current policy on Ohio’s drainage law, calling for changes to the Ohio Revised Code to give soil and water conservation districts greater authority in getting easements for drainage.

Gearhardt called the issue “critical” to Ohio landowners, particularly with increased development around the state.

“Drainage improvement is so important that they’re willing to give up rights to get drainage improved,” Gearhardt said.

The Farm Bureau members would like local SWCDs to have the same level of authority as county engineers to get construction and maintenance easements for drainage projects.

Water use. While the Midwest is flush with water, skirmishes over water use are on the horizon. Farm Bureau delegates added new policy protecting Ohio’s water basins from withdrawals to other regions of the country.

Members also opposed diverting water from one major river basin to another, even within the state.

Delegates said they would oppose expanding Ohio’s Water Withdrawal Facility Registration Program into a water use permitting program.

Other issues. The contentious issue of video lottery terminals, or slots, at Ohio racetracks reared its head at several points during policy development.

Proponents said Ohio’s horse industry is suffering along with the state’s racetracks without the option to entice track visitors. Opponents – the majority of Farm Bureau delegates – responded repeatedly the organization won’t sanction anything related to gambling.

The issue puts the farm group in delicate situation. For the past several years, it has been courting horse owners as members. The racetrack lottery terminal issue, which has been raised in the Ohio Statehouse, could benefit from the farm group’s clout, but the conservative group has solidly opposed past gambling issues.

Delegates also turned down a proposal to support the sale of raw milk in Ohio.

Trustee elections. Two new trustees were elected to the state board. Don Ralph of Morral will represent Crawford, Marion, Morrow and Richland counties. He succeeds Lee Oswalt, who retired from the board.

Joe Pittman of New Concord succeeds Andrew Wilson, who did not seek re-election. Pittman will represent Guernsey, Morgan, Muskingum and Perry counties.

Re-elected to the board were: Edwin Lamalie, Fremont; Charles Lausin, Thompson; Jeff Zellers, Hartville; Brent Porteus, Coshocton; Tim Williams, Piketon; Vickie Powell, Bidwell; Gale Betterly, Richfield; and Ellen Joslin, Sidney.

In the board’s reorganization following the annual meeting, Terry McClure was re-elected president and Bob Peterson, first vice president.

Dairy Excel: Problems and solutions: Keep records

July 24th, 2003 Dairy Excel

In times like this, when the milk price is low and profitability seems unattainable, it seems that everyone is looking for a solution to the dairy industry’s raw milk pricing dilemma.

Many try to solve it by addressing global issues like imports and exports. A number in the industry think that cost of production should be factored into milk price calculations.

Some spend a great abundance of time and effort in attempts to increase demand through product promotion.

Still others talk about supply management as the solution to our problems.

All of these can and do affect the bottom line of profitability, however, when discussions are held on these questions the only consensus reached by those participating is that there are more questions than answers.

Even the CWT program being implemented this summer, while being able to gather more support than any other effort previously attempted, is still being rethought and altered minute by minute.

Start at home. With broad answers to low milk prices remaining elusive, focusing specific efforts on our individual operations appears yet to be our best option.

When we ask, “How can I improve my operation?”, answers like “price risk management”, “specialization”, “expansion”, “low input operations”, “increased dry matter intake” and the ever dreaded, overused voodoo suggestion “increased efficiency” are thrown about.

And it is very relevant to continue to have discussions on all of these management suggestions as well as those attempting to address milk prices.

But when all is said and done, the most effective efforts in determining productivity and profitability are those directed into our own specific operations.

Managing what we control. The foundation on which good management is built is complete and accurate records. Yes, maintaining good records is a time-consuming task, but it is well worth it.

Without proper documentation, all the planning, organizing, and staffing cannot be effectively directed or controlled and the result can be classified as little else but wasted time.

The only good aspect of not keeping good records is that you don’t know how much time you wasted or the money you’ve lost.

When we consider keeping records, we must also determine what type of records we need, for there are many types.

Financial. One of the most important and most common types of records we maintain, at least to keep the IRS happy, is our financial records. These records are required to fill out our taxes, to apply for loans, and for the most part to justify our labor and efforts.

Dairy Excel’s 15 Measures of Dairy Farm Competitiveness is an excellent source to use to compare your operation with industry standards.

Measurements included are: operating expense ratios, dairy investment per cow, net farm income, asset-turnover ratio, rate of return on farm assets, and debt-to-asset ratio.

Contact your local extension office for more information on the 15 measures.

Production. Production records are some of the most fulfilling records to keep and are usually the records that most dairy producers can quote completely.

Milked shipped, rolling herd averages, pounds of milk sold per worker, breeding records, calving intervals, and feed consumption are all examples. Everyone should be familiar with these and a complete list is not only lengthy but also probably unnecessary.

Animal health. The importance of these records has increased the last decade as drug residue tolerances decrease and drug screening test sensitivity increases.

The beef and dairy quality assurance programs has provided critical drug residue prevention information and has established a mandatory system of compliance.

BSE, foot-and-mouth, and Johne’s disease have also increased awareness of the risks of infectious diseases and have led many to develop on-farm biosecurity plans and records.

As the consumer demands greater assurance of a safe food supply, how can a more accurate and complete record keeping system be denied?

Animal ID, drug use treatment logs, residue testing results, veterinary recommendations, visitor logs, and shipping records may all be required in the future.

Product quality. In livestock agriculture, product quality goes hand in hand with animal health.

With market competition continuing to increase the quality of our product must also remain high and above reproach. Therefore, it is imperative that each individual operator monitor and record quality issues such as has been done by dairy cooperatives and processors in regards to bacteria and somatic cell count.

Other on-farm records could include sanitation procedures, system maintenance, product temperature, and chemical inventories.

Environmental impacts. The latest 300-pound gorilla in the industry is the concern over animal agriculture’s impact on the environment and the rules that are being established to limit it.

Until recently, a limited number of livestock operations have been required to apply for permits, however under the new U.S. EPA guidelines, every operation that has the potential to discharge will be required to at least apply for a CAFO/NPDES permit.

A good portion of the permit has to deal with the documentation of manure storage and application practices. Complete records are required to show that an operation is in compliance of EPA’s discharge rules.

Unlike the U.S. trial system, when it comes to environmental degradation, it seems that most parties are considered guilty until proven innocent.

It’s recommended that all livestock operators develop and implement a Comprehensive Nutrient Management Plan that has been approved by their local soil and water conservation district using USDA standards.

Records included in a manure plan would include soil and manure analysis data, cropping rotations, manure application methods and amounts, water monitoring test results (ground & surface), and emergency contact information (in the case of a spill).

According to Ohio’s new Livestock Environmental Permitting Program, producers will also have to monitor and document pests such as flies and rodents.

Third party assessments. A great way to know if you are up to speed with today’s changing environmental requirements is to participate in a third party, on-farm assessment.

One program that is recommended because of its high level of confidentiality is the On-Farm Environmental Assessment and Review program sponsored by the Ohio Livestock Coalition and it’s free.

For more information on this program go to www.ohleap.org on the web or call 614-246-8288.

Animal well-being practices. As mentioned before, consumer expectations and demands are continuing to increase.

The conflict seen by most producers is that consumers want a higher quality, lower risk product, that is raised in a manner that does not negatively affect the environment nor does it cause undo stress or discomfort to the animal; and they want it cheap.

Those who are able to document that generally accepted best management practices (BMPs) are being used on their operations will be ahead of the curve when it comes to market competitiveness.

Emergency management. One of the most important types of records may be one of the most overlooked on today’s dairy operations. Dairymen are generally concerned with the day-to-day operation of their dairy and have little time to consider, “What if……?”

A written Emergency Action Plan lets anyone involved in the operation promptly react in the case some emergency is encountered. This documentation can save as little as a few minutes to as much as the life of an individual.

Some of these details include: emergency contact numbers, facility maps, locations of hazardous chemicals, underground containment units, and procedures for handling things such as catastrophic mortalities and spills.

You may also consider contacting your local emergency management personnel.

(The author is an OSU Extension associate with the dairy industry enhancement program. Questions or comments can be sent in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)

To CWT, or not to CWT; that is the question

June 26th, 2003 Other News

Editor:

Paraphrasing author William Shakespeare, dairy farmers during June Dairy Month are faced with a really big decision: Will we back CWT, a supply management plan that will reduce milk production and boost farm prices, or will we just sit back and complain about our economic situation?

It is up to today’s dairy farmers to decide where the future will take our industry.

We dairy farmers have an opportunity to help ourselves without the government stepping in. For the past 20-plus years, this is exactly what I have heard dairy farmers say they have wanted. Every meeting that I attend, I hear dairy farmers say to get government out of farming. I hear dairy producers say they feel the MILC program is just a form of welfare.

Well folks, we have an opportunity right now to work together and help ourselves – no government involvement, just farmers working together to solve the problems of the dairy industry.

We must first decide if we can agree that the dairy industry has a problem. I believe we do! We should be able to make a decent living providing raw milk to the dairy processing industry. That is not possible today with continuing increases in expenses (like hospitalization insurance, fuel prices, and other farm input costs) and the continuing trend of low milk pay prices.

Assuming that we agree there is a problem, the next step is to decide what to do about it.

I continue to hear that co-ops should solve all of the problems, but that is unrealistic.

The current supply/demand imbalance and low milk price situation are problems for the entire dairy industry. The milk surplus was not caused by co-ops who market milk, but from farmers who produce milk. The flattening of consumption trends has everything to do with consumers, not farmers and their co-ops.

So, every dairy farmer had better ask, “What have you done lately to help increase or positively influence milk prices?”

We all have the chance to do something right now by supporting CWT. Let’s not let it pass by.

CWT is a positive step. Is it perfect? No. But it is farmer-created and farmer-led.

CWT’s concept of reducing milk production and herd size may not necessarily fit into the business philosophy of all dairy farmers.

For instance, on my farm our herd and production levels are at the size that can support our family. In fact, due to the weather and other forces of nature, we have already reduced our production level and our herd size has not really changed in 10 years.

The success of CWT, however, is important to my family dairy operation because it affects the future of our farm. By helping to support the program and by paying our share of the costs, our 17.9 cents per hundredweight will help to stabilize the market and help enhance prices.

Dairy farmers need to work together through CWT to increase our milk checks. This is truly one of those programs where you are either part of the solution or part of the problem.

I urge my fellow dairy producers to be problem solvers for this industry’s future. Support CWT. Be a part of the solution.

Connie Finton

New Philadelphia, Ohio

(Connie Finton is a board member for Dairy Farmers of America.)

To CWT, or not to CWT; that is the question

June 26th, 2003 Susan Crowell

Editor:

Paraphrasing author William Shakespeare, dairy farmers during June Dairy Month are faced with a really big decision: Will we back CWT, a supply management plan that will reduce milk production and boost farm prices, or will we just sit back and complain about our economic situation?

It is up to today’s dairy farmers to decide where the future will take our industry.

We dairy farmers have an opportunity to help ourselves without the government stepping in. For the past 20-plus years, this is exactly what I have heard dairy farmers say they have wanted. Every meeting that I attend, I hear dairy farmers say to get government out of farming. I hear dairy producers say they feel the MILC program is just a form of welfare.

Well folks, we have an opportunity right now to work together and help ourselves – no government involvement, just farmers working together to solve the problems of the dairy industry.

We must first decide if we can agree that the dairy industry has a problem. I believe we do! We should be able to make a decent living providing raw milk to the dairy processing industry. That is not possible today with continuing increases in expenses (like hospitalization insurance, fuel prices, and other farm input costs) and the continuing trend of low milk pay prices.

Assuming that we agree there is a problem, the next step is to decide what to do about it.

I continue to hear that co-ops should solve all of the problems, but that is unrealistic.

The current supply/demand imbalance and low milk price situation are problems for the entire dairy industry. The milk surplus was not caused by co-ops who market milk, but from farmers who produce milk. The flattening of consumption trends has everything to do with consumers, not farmers and their co-ops.

So, every dairy farmer had better ask, “What have you done lately to help increase or positively influence milk prices?”

We all have the chance to do something right now by supporting CWT. Let’s not let it pass by.

CWT is a positive step. Is it perfect? No. But it is farmer-created and farmer-led.

CWT’s concept of reducing milk production and herd size may not necessarily fit into the business philosophy of all dairy farmers.

For instance, on my farm our herd and production levels are at the size that can support our family. In fact, due to the weather and other forces of nature, we have already reduced our production level and our herd size has not really changed in 10 years.

The success of CWT, however, is important to my family dairy operation because it affects the future of our farm. By helping to support the program and by paying our share of the costs, our 17.9 cents per hundredweight will help to stabilize the market and help enhance prices.

Dairy farmers need to work together through CWT to increase our milk checks. This is truly one of those programs where you are either part of the solution or part of the problem.

I urge my fellow dairy producers to be problem solvers for this industry’s future. Support CWT. Be a part of the solution.

Connie Finton

New Philadelphia, Ohio

(Connie Finton is a board member for Dairy Farmers of America.)

Dairy farms impact economy

June 12th, 2003 Former Farm and Dairy Reporters

SALEM, Ohio – Economists say Dutch dairies will strengthen the dairy industry, but some Ohio farmers don’t see it that way.

Instead, many say that more cows mean more milk – something that isn’t needed in times when a milk surplus and low prices rule the market.

But according to an Ohio State University economic analysis, seven dairies created nearly $23 million in economic impact in Paulding and Van Wert counties.

Before these seven dairies were constructed, the local dairy industry contributed only one-tenth of 1 percent to the area’s total economic activity, according to the study. Today, the dairy sector accounts for about 1 percent of all economic activity in these two counties.

Some experts say the Dutchmen have chosen the right place to relocate, despite the strong opposition they face.

Ohio’s roadways provide milk tankers access to 70 percent of U.S. consumers within 24 hours, making it easy to ship raw milk or processed dairy products from Maine to California.

Canadian markets can be reached just as quickly, according to Tim Demland, ag extension agent in Putnam County.


Buying locally

The study found the dairies’ impact could be even greater if the farms purchased more of their inputs locally.

The new farms have bought only 1 percent of their pre-mixed feed locally, giving room for more producers and businesses to cash in.

“They told us they are interested in doing more local purchasing, but I’ve found in other research that it can take a while to establish local business relations,” said Brian Roe, agricultural economist.

“New farms in an area are just less likely to buy locally. As they establish themselves, they’ll find the local supply chains they need.”

Already the farms have created neighbor-to-neighbor demand for corn and other grain crops, buying 71 percent of their corn for grain and 100 percent of their corn for silage locally.

The farmers are willing to pay to have their herds’ feed raised close by, paying enough for their neighbors to invest in silage wagons and choppers and spread their cost over a shorter period.

Even in years where the corn crop looks bad, dairymen will still buy acres of corn for silage, Demland said.

“These guys hire what they’re not good at,” Demland said, noting the Dutchmen are here to milk cows, not to farm ground.


Room to grow

Two Putnam County farmers have already cashed in on forward-thinking. The two men invested more than $250,000 in manure pipes and injection equipment, building a substantial business in manure hauling and application based on the new dairies, according to Demland.

As the commercial dairy base keeps growing – and farms get the green light to expand – Demland sees more opportunities for raising heifers, even beyond northwestern Ohio.

Demland sees potential for graziers in southeast Ohio to capitalize on their hilly ground, which is mostly unsuitable for harvesting grain, to raise heifers.

“Larger farms need small farms, and small farms need large farms. It will take some time until everybody realizes that,” Demland said.

The influx of dairies created demand for new tractors, loaders and TMR mixers.

On the people side of things, there is more need for veterinarians with dairy backgrounds and specialties, as well as artificial insemination technicians.


Touchy subject

The Ohio State study also covered another sore spot in the minds of many farmers: the possibility that Dutch farmers are getting tax incentives or tax breaks.

In the case of the seven farms in the study, each entered Tax Increment Financing agreements to distribute the new tax dollars to specific government agencies.

In four of the seven agreements, part of the tax money was directed as “gifts” to local schools. Since it is a gift, it protects a school’s state funding.

Roe stresses that the Dutch farmers’ payments in lieu of taxes are the same as if they were paying the county. However, with this setup, the money goes directly to the school or highway department, rather than first going through the county where it would be split between funds.

The thinking is that the “gifts” redistribute the money to parts of the government that may need it to cover the costs of Dutch dairies.

For example, Roe said that the money going to the highway department would help cover the cost of more equipment on the roads.

Although the tax money is being redirected, Roe said the Dutch farmers are paying the same dollar amount and are not receiving a tax break. Likewise, he also said that depending on the counties’ or townships’ individual regulations, Tax Increment Financing is available to other businesses and farms.

Dairy Excel: Milk prices: Dairy expert searches for 2003 rays of pricing sunshine

March 6th, 2003 Dairy Excel

Are better milk prices on the way? Let’s hope so!

In my last column (November 2002) I took a look at milk prices for 2003 and I was not very optimistic. At this point in 2003 I must confess that I remain a bit more pessimistic than optimistic.

Now, before you say to yourself, “Here he goes again with another dismal price forecast,” and then turn to another column, I want to tell you that in this column I am going to look for what rays of pricing sunshine there may be come the remainder of 2003.

Hopeful search. What possible changes may there be to pull us out of these rock-bottom price blues and get things moving again?

Imbalance. First, a little taking stock of what has us in this predicament. Too much supply and too little effective demand. It’s that simple.

So what do we need to rectify this imbalance?

Either we must get supply throttled back or we must get demand going again. Preferably accomplishing both at the same time is a winner.

And the sooner this takes place, the better for all in the industry.

Supply side. Let’s look at the supply side for a moment.

First, notice that I said supply and not production. Supply is the sum of current production plus current inventory plus net imports.

It is supply that is the scalawag here and not just production.

Production. Low milk prices will slow down production from our milk farms, always has and always will. The question that seems to have everyone scratching heads is “how fast?”

The answer of course is that nobody really seems to know.

As the farm production side of the industry has changed, both in size and in technology, so has the response of slowing milk production to low prices.

You can count on this. With milk prices at this low level or even sliding into the lower $9 range you can bet your uncle that the annual rate of milk production will be falling and even become negative for a period of two to three quarters down the road.

When that happens, milk prices will begin to rebound in earnest.

Other contributors. Now what about the other contributors to supply, for example, inventories and net imports.

Let’s consider inventories first.

The latest USDA Cold Storage Report and Chicago Mercantile Exchange tell us we have significant quantities of storable dairy products on hand.

Big three. Cheese, butter and nonfat dry milk all are in abundance at this time. This abundance will begin to dissipate as domestic milk production begins to show a downturn in the rate of flow.

Once the official reports show a significant decline in inventory numbers, milk prices will begin their rebound.

Cheese is the one to watch as its inventory level is not as nearly burdensome as it is for butter.

Nonfat dry milk is, as it is said, “strictly a horse of a different color.” Uncommitted inventory owned by the government storehouse, Commodity Credit Corporation, still exceeds one billion pounds.

Net imports. Net imports are the result of subtracting export volumes from import volumes.

As an industry we are not a major player in the dairy product export world so that means we focus our attention on imports.

Recent meeting. By now we have all heard about the flow of raw milk into the United States from non-quota farms in Canada. This was the topic at a recent Ohio Dairy Industry Task Force meeting.

This issue was discussed in detail. From what I learned at that meeting, this is an important issue but one that may be losing steam as Canada closes down the operations from which this milk has been flowing.

If this is correct, then all is well and good.

If not, then even though the quantities of milk are small, this is an activity that cannot be sanctioned and allowed to continue.

If we are going to continue to support the price of milk, and the U.S. Congress in the 2002 Agricultural Act reaffirmed that we are, then we cannot have raw milk from outside our borders flowing in and being transformed into dairy products.

This is milk that truly does displace milk being produced here at home.

MPCs. The other contentious issue with imports is of course the milk protein concentrate or MPCs.

I have heard it stated that these are displacing milk produced here at home but confess that I have a difficult time sorting this one out.

If, as is often stated, MPCs are a direct substitute for our skim milk powder, I do not see how they are displacing anything.

Commodity Credit Corporation is purchasing, at the announced support price, all of the skim milk powder that the industry can supply, and having to store the product. Nothing is being displaced.

Commodity Credit Corporation on behalf of the U.S. taxpayer, is having to pay too much for a derivative product that can be brought in off-shore at a much lower price.

Real issue. I think that the real problem here is that the support price on nonfat dry milk is too high, even at 80 cents per pound.

Until we change our national commitment to support the price of milk at $9.90 per hundredweight, I do not see an easy solution to this one.

Demand side. Now let’s look at the demand side of the system. As we wait for low milk prices to throttle back the milk production engine in the United States, what can be expected on the demand account?

First and foremost we must have surplus dairy inventory moving to Commodity Credit Corporation.

We cannot have a dairy pricing program, with its support price for milk of $9.90 that in reality moves no product to the public storeroom.

If surplus butter and cheese will not move to Commodity Credit Corporation at announced support prices but instead only moves when those prices are discounted by 8 to 10 cents and then only after an extended period of time at those levels, then we have in reality a support price for milk in the mid-$8 range.

If, as has been reported, surplus product does not move to the Commodity Credit Corporation because of the cost of doing business with the government and a mismatch between what the corporation specifies as to product grade and standard and what is being commercially produced, then Commodity Credit Corporation should change its procedures to facilitate quick movement of product at announced support prices.

If the announced milk support price of $9.90 is too high, then let us have an open debate on this issue and make changes if that is the political will, but let us end this charade of an announced price of $9.90 but an effective one closer to $8.50.

Working magic. So, there you have it. The current low price will work its magic on domestic production.

It will take time, but it will happen.

And for some it will be painful. Low prices will also make imports into the United States less attractive and this too will slow down the production side.

If surplus product would start moving to Commodity Credit Corporation in earnest, this would do a great deal to get milk prices back up by a dollar or two.

Look for both. I look for both the slowing of the production engine and the absorption of surplus stocks by Commodity Credit Corporation to coincide by early summer and expect market prices to begin to increase toward more average levels.

If these do come together, then you can expect to see Class III prices rise by a couple of dollars after the flush of the year.

Positive look. Let’s stay positive. For an up-to-date 2003 forecast of dairy product prices, component prices and Federal Order Class prices, please connect to: http://aede.osu.edu/programs/ohiodairy.

(The author is a dairy marketing and policy state specialist with Ohio State University Extension. Questions or comments can be sent in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)

DairyChannel: Northeast management conference lines up dairy heat stress experts

February 13th, 2003 Dairy Excel

After a quick trip up into the relatively balmy 40s, the mercury in the thermometer headed back down below 20.

According to the weatherman on Sunday night, it is going to stay there for awhile.

It is at times like these that we don’t worry about the implications of heat stress for our cows. We are more worried about the implications of not getting to some heat if we’ve been outside for awhile.

Heat stress. Actually, March 6 will be a good time to think about heat stress. That is when dairymen and dairy industry types will gather again for the Northeast Ohio Dairy Management Conference at the Raintree Country Club in North Canton, Ohio.

Presentations will focus on the consequences of doing nothing to reduce heat stress and how we can do something about heat stress.

Impacts. Normand St-Pierre, OSU dairy specialist, will kick off the day with a look at how excess heat impacts the cow and our pocketbook. Heat stress impacts the cow in many ways (details on the sixth!).

Ultimately it adversely impacts her milk production and reproduction – a one-two punch to the milk check that we can ill afford this year.

Fortunately, we can easily lessen heat’s impacts with reasonable investments that will pay off quickly.

Many farms have already installed fans and sprinklers to help cool cows. Jump on this opportunity to re-evaluate that system to make sure it is doing all that it can do.

What, how. Rick Stowell, agricultural engineer from the University of Nebraska, will follow up the “what” of our heat stress discussion with “how” to change the cow’s environment to lessen the negative impacts of heat.

His first charge from the planning committee: Dairymen leaving the conference should have the information and knowledge in hand (and head!) to install their own sprinkler and fan-cooling systems.

His second charge: what are the facts about supplemental fans, tunnel ventilation and high-velocity, low-speed fans (HVLS – these are the great big fans that are currently advertised under a brand name that resembles “big donkey” fans.)

What role can these play in the fight against heat stress?

For the birds. Got birds? You are lucky if you don’t.

Unfortunately, birds have become rats with wings on many dairy farms. What is a dairyman to do?

There actually have not been a whole lot of options other than hanging inflatable owls or shiny pie pans… that frequently get covered with bird poop after the first three weeks.

The USDA Wildlife Service will be on hand to talk about bird control options including the new baiting program they are currently offering.

Merger. In the last year, the Ohio Dairy Farmers Federation and the Progressive Dairy Producers of Ohio merged to become the voice for Ohio Dairy Producers (and took that name as well!)

Tim Demland will be on hand to discuss the merger, how Ohio Dairy Producers is working to strengthen Ohio’s dairy industry and why every dairyman should be a member.

Food safety. Finally, dairy cows were recently targeted as the source of a salmonella outbreak traced back to Young’s Jersey Dairy.

While the source of infection wasn’t the cows or the raw milk sold by the dairy, the incident illustrates the potential concern with food safety and our dairy farms.

Jeff LeJeune, a researcher with the Food Animal Health Research Program at Ohio Agricultural Research and Development Center in Wooster, is currently surveying our dairy farms to establish the incidence of E. coli 0157 and potential impacts on food safety.

He will briefly share with us what he sees on our farms.

Now, I know that good food goes a long way toward making a good day. So, plan to enjoy a really fine lunch of prime rib (we are not talking cull cow here.)

I promise that some of the prime rib will be cooked a bit longer than last year’s. But if you like it rare, that will be available also.

How to register? The Raintree Country Club is an easy drive from anywhere in northeast Ohio.

It is just off of Interstate 77, a few miles north of the Belden Village shopping Mecca (just in case someone wants to drop you off at the conference while they go stimulate the economy.)

To register, either contact your extension office as they have brochures with detailed directions if you haven’t joined us before.

Or, in this issue is an advertisement for the conference which includes a registration form that you can fill out and send in (the sooner, the cheaper.)

Warmer days. It is time to get in out of the cold.

Send in your registration and think ahead to the warmer days of July. I guarantee that you will be glad you did.

If you finally get that sprinkler system up and running, or decide on the right place to put those fans that are gathering dust in the shop, so will your cows.

(The author is the northeast Ohio district dairy specialist with OSU Extension. Send comments or questions in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)

DairyChannel: Northeast management conference lines up dairy heat stress experts

February 13th, 2003 Dairy Excel

After a quick trip up into the relatively balmy 40s, the mercury in the thermometer headed back down below 20.

According to the weatherman on Sunday night, it is going to stay there for awhile.

It is at times like these that we don’t worry about the implications of heat stress for our cows. We are more worried about the implications of not getting to some heat if we’ve been outside for awhile.

Heat stress. Actually, March 6 will be a good time to think about heat stress. That is when dairymen and dairy industry types will gather again for the Northeast Ohio Dairy Management Conference at the Raintree Country Club in North Canton, Ohio.

Presentations will focus on the consequences of doing nothing to reduce heat stress and how we can do something about heat stress.

Impacts. Normand St-Pierre, OSU dairy specialist, will kick off the day with a look at how excess heat impacts the cow and our pocketbook. Heat stress impacts the cow in many ways (details on the sixth!).

Ultimately it adversely impacts her milk production and reproduction – a one-two punch to the milk check that we can ill afford this year.

Fortunately, we can easily lessen heat’s impacts with reasonable investments that will pay off quickly.

Many farms have already installed fans and sprinklers to help cool cows. Jump on this opportunity to re-evaluate that system to make sure it is doing all that it can do.

What, how. Rick Stowell, agricultural engineer from the University of Nebraska, will follow up the “what” of our heat stress discussion with “how” to change the cow’s environment to lessen the negative impacts of heat.

His first charge from the planning committee: Dairymen leaving the conference should have the information and knowledge in hand (and head!) to install their own sprinkler and fan-cooling systems.

His second charge: what are the facts about supplemental fans, tunnel ventilation and high-velocity, low-speed fans (HVLS – these are the great big fans that are currently advertised under a brand name that resembles “big donkey” fans.)

What role can these play in the fight against heat stress?

For the birds. Got birds? You are lucky if you don’t.

Unfortunately, birds have become rats with wings on many dairy farms. What is a dairyman to do?

There actually have not been a whole lot of options other than hanging inflatable owls or shiny pie pans… that frequently get covered with bird poop after the first three weeks.

The USDA Wildlife Service will be on hand to talk about bird control options including the new baiting program they are currently offering.

Merger. In the last year, the Ohio Dairy Farmers Federation and the Progressive Dairy Producers of Ohio merged to become the voice for Ohio Dairy Producers (and took that name as well!)

Tim Demland will be on hand to discuss the merger, how Ohio Dairy Producers is working to strengthen Ohio’s dairy industry and why every dairyman should be a member.

Food safety. Finally, dairy cows were recently targeted as the source of a salmonella outbreak traced back to Young’s Jersey Dairy.

While the source of infection wasn’t the cows or the raw milk sold by the dairy, the incident illustrates the potential concern with food safety and our dairy farms.

Jeff LeJeune, a researcher with the Food Animal Health Research Program at Ohio Agricultural Research and Development Center in Wooster, is currently surveying our dairy farms to establish the incidence of E. coli 0157 and potential impacts on food safety.

He will briefly share with us what he sees on our farms.

Now, I know that good food goes a long way toward making a good day. So, plan to enjoy a really fine lunch of prime rib (we are not talking cull cow here.)

I promise that some of the prime rib will be cooked a bit longer than last year’s. But if you like it rare, that will be available also.

How to register? The Raintree Country Club is an easy drive from anywhere in northeast Ohio.

It is just off of Interstate 77, a few miles north of the Belden Village shopping Mecca (just in case someone wants to drop you off at the conference while they go stimulate the economy.)

To register, either contact your extension office as they have brochures with detailed directions if you haven’t joined us before.

Or, in this issue is an advertisement for the conference which includes a registration form that you can fill out and send in (the sooner, the cheaper.)

Warmer days. It is time to get in out of the cold.

Send in your registration and think ahead to the warmer days of July. I guarantee that you will be glad you did.

If you finally get that sprinkler system up and running, or decide on the right place to put those fans that are gathering dust in the shop, so will your cows.

(The author is the northeast Ohio district dairy specialist with OSU Extension. Send comments or questions in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)

50 people sick, but milk not to blame: Salmonella linked to Young’s Dairy

January 16th, 2003 Former Farm and Dairy Reporters

SALEM, Ohio – While the number of salmonella cases linked to Young’s Jersey Dairy in southern Ohio continues to increase, health officials are scrambling to determine if there is a link to Ross or Columbiana counties.

Both counties had outbreaks of the same strain of bacteria last year.

As of Jan. 13, there were 52 confirmed cases of salmonella traced to Young’s Jersey Dairy in Clark County, Ohio, and are due to human contamination.

Milk not to blame. A batch of milk from Nov. 29 was originally blamed for the outbreak, however further investigation revealed that the strain did not originate on the farm.

The outbreak is most likely due to poor hygiene, said Charles Patterson, health commissioner of Clark County Combined Health District. It is suspected that an employee became infected with the bacteria and then cross contaminated the milk.

The dairy herd tested negative for salmonella, as did the rest of the milk.

Salmonella is a bacteria passed through uncooked meat, raw eggs and poor hygiene. It causes vomiting, diarrhea, chills and nausea.

All tests as of Jan. 13 confirm that this salmonella strain has the same DNA markers of strains found in Ross and Columbiana counties earlier this year.

The Ohio Department of Health cautions that it cannot be limited to just those two counties. Spokesman Kristopher Weiss reports that Ohio had eight “sporadic cases” of the same strain in 2001 and 2002.

Mystery. The piece of the puzzle that is missing, and one that may never be found, is how the bacteria made its way to Young’s.

Because people infected with salmonella may not show signs, it is possible for them to carry and spread the bacteria without being sick themselves.

The bacteria may have traveled through 20 counties before it made its way to Young’s, Patterson said.

Public health officials continue to investigate where the employees ate, who they saw and where they traveled – all in an effort to find a link to another county with the same strain.

Likelihood. Because the strain is uncommon in Ohio, Patterson says that it’s likely that the salmonella originated from the outbreaks in Ross and Columbiana counties.

As recently as mid-December, a person in Columbiana County was still testing positive for salmonella, which had been found in September, Patterson said.

Columbiana County General Health District spokesman Barb Knee, however, reports that it is unlikely that the bacteria originated in Columbiana County because the two cases of salmonella were in people who are not among the general public.

Raw milk. The initial fear that the salmonella was due to the milk being unpasteurized is an image that will be difficult for customers to shake.

Raw milk is already controversial.

Government officials say it is illegal because it has the potential to carry diseases such as tuberculosis.

On the flip side, raw milk activists say pasteurization, the heating process intended to kill germs, also kills essential vitamins, destroys enzymes and promotes pathogens.

Although it is illegal to sell raw milk in Ohio, Young’s Jersey Dairy fell under the grandfather clause and is the only farm in Ohio legally allowed to sell raw milk. Young’s is located in Yellow Springs, Ohio.

No difference. In this case, pasteurization may not have made a difference, Patterson said. It isn’t clear what stage in production the salmonella entered the milk, so it is possible that it entered at a point after pasteurization would have taken place.

Cross contamination can infect even pasteurized milk, he said.

Employees. Sixteen employees have tested positive for salmonella and were all linked to drinking the milk. In addition to customers who tested positive, the other positive tests are from secondary contact.

The 16 employees have been given duties outside food handling and will not be able to go back to those positions until after they test negative in two stool samples taken 24 hours apart.

Young’s Jersey Dairy is also giving employees a refresher course on food handling and certifying more employees with ServSafe, a food safety program.

Indiana link. Although the suspect milk was from Nov. 29, it took 12 days before the dairy learned there was a problem.

A customer from western Indiana provided the first link to salmonella. After being sick, the customer froze the raw skim milk purchased at Young’s.

It was later determined that there was one batch of contaminated milk, which included whole milk, skim milk and cream, Patterson said. Although the milk was packaged Nov. 29, it was not necessarily sold on that date.

The batch of milk came from a bulk tank holding 70-80 gallons of milk, Patterson said.

Decisions. Despite the negative effect the outbreak has had on Young’s business, customers are calling to say they still want raw milk, said Dan Young, the dairy’s chief executive officer.

In compliance with the health department’s request, Young’s pulled all of its raw milk from the shelves Dec. 13 and has switched to selling pasteurized milk. The dairy has made no decisions about whether it will continue selling raw milk in the future.

“We’ve served 20 million customers in 50 years without any problems,” Young said.

He hopes this positive 50-year reputation pulls them through this rocky time.

Nevertheless, Clark County Combined Health District has already been contacted about a possible lawsuit against Young’s Jersey Dairy, stemming from a customer with salmonella.

Patterson said the raw milk’s packaging had warning labels indicating unpasteurized milk may contain harmful pathogens.

Getting sick. In addition to being contracted through uncooked meat and unsanitary hygiene, salmonella can also spread through raw eggs and intimate person-to-person contact.

The bacteria is spread through a fecal-to-oral route.

Bacteria can live on an inanimate object, such as a faucet, for several minutes to a couple of hours, Patterson said.

Finding a link. The county health department is continuing to look for a link between Young’s and the source of the bacteria.

In the meantime, Patterson said people are being tested and retested and monitored.

“It may be overkill, but we want to err on the side of caution,” he said. “We want to be sure it’s safe to eat at Young’s.”

Previous problems? Although Young’s has been cited for minor infractions during past state inspections, none of them is out of the ordinary. They basically have a clean record, said Melanie Wilt, Ohio Department of Agriculture spokesperson.

(You can contact Kristy Hebert at 1-800-837-3419, ext. 23, or by e-mail at khebert@farmanddairy.com.)


Related links:

Young’s Jersey Dairy – www.youngsdairy.com

Salmonella link – www.salmonella.org

High retail milk prices puzzle farmers

November 21st, 2002 Other News

UNIVERSITY PARK, Pa. – Dairy farmers are noticing strong retail prices for many dairy products and wondering why the increases aren’t showing up in their milk checks from wholesalers.

A milk marketing specialist in Penn State’s College of Agricultural Sciences said while there are extenuating circumstances, the unusual dairy market raises tough questions for producers and consumers.

“Dairy farmers are facing three crushing blows: low milk prices, rising feed costs and the after-effects of drought conditions that have limited their feed production,” said Ken Bailey, associate professor of dairy marketing and policy.

“And consumers facing a tough economy are paying more for milk and dairy products than the ingredient costs would suggest they should.”

Rising price. For example, between June and August 2002, retail prices for ice cream rose 1.4 percent.

But, Bailey said, the modest increase was added to prices already elevated due to rapidly rising butterfat prices in 2001. But butterfat prices this year are down 50 percent from last year.

“One would expect ice cream prices to have fallen back to their pre-2001 Ievels,” Bailey said. “That did not occur. The same also is true for natural cheese: its price is up 6.7 percent through August, while protein, the main ingredient in cheese production, fell in value this year. Cheese processors June through August paid farmers 14.6 percent less than a year ago, yet retail prices rose.”

Bottled whole milk prices for major U.S. urban markets actually fell 5.7 percent between June and August when compared to the same months a year ago. On the other hand, lower federally regulated fluid prices meant processors paid farmers 30 percent less for milk used for bottling purposes.

Facing factors. Someone is keeping this difference, Bailey concedes, but consumers and producers wondering about price discrepancies should know that many factors play into the scenario.

“First, many ice cream processors saw their margins squeezed in 2001 because they could not fully pass along all of their costs,” he said. “Also, retail milk prices haven’t always gone up as high as the increase in raw milk costs (Class I prices) when milk prices are rising, and they don’t go down as fast when milk prices are plummeting. Also, the federal retail price data may not account for sales discounts that are so common today in retail.”

Weak demand. Bailey cites U.S. Department of Agriculture data for the first eight months of 2002 indicating that strong milk production and weak demand have lead to unusually large butter and cheese inventory levels that could “hang over” the market next year, depressing future prices for butter and cheese.

In addition, the federal government currently has 1.1 billion pounds of nonfat dry milk in storage, more than enough to meet domestic needs for an entire year.

The outlook for the holiday shopping season clearly is uncertain. While the economy has consumers cautious, Bailey points to automotive and computer manufacturing as industries that have found creative ways to deal with tough economic conditions and consumer reluctance.

Other strategies. “Dairy retailers have a rare opportunity to offer quality dairy products to their customers at favorable prices,” he said. “Wholesale prices for milk, butter and cheese are very low, and that should translate into opportunities to offer these products to consumers at reduced prices, employ sales promotions and use other strategies to give the consumer a better deal.

“Strong holiday sales this last quarter could do wonders for the U.S. dairy industry, mainly by reducing inventory levels and allowing the market to jump-start into a new year,” Bailey said.

“Farm gate milk prices then will be able to recover early next year if inventories are lower and if the growth in the milk supply slows. This concern over the farm-retail price spread shouldn’t be an issue if dairy product sales are increasing. If sales are going up each year, everyone is better off.”

TB forces dairy farm quarantine in California

June 20th, 2002 Former Farm and Dairy Reporters

SALEM, Ohio – Eighty-nine cows and 16 workers have tested positive for bovine tuberculosis exposure at a 3,700-cow dairy farm in Tulare, Calif.

The exposed cattle have been killed and an autopsy revealed one had a lung infection, meaning it was the only cow capable of spreading the disease by air. Approximately 30 others had infected lymph nodes.

The rest of the herd has been quarantined.

The California Department of Food and Agriculture is testing additional herds that have been in contact with the infected animals. This includes testing herds that have purchased animals from the dairy within the last 18 months.

In order to determine the origin of the tuberculosis, all animals the dairy has purchased within the last eight to 10 years will be examined.

Transfer. Airborne exposure through coughing and sneezing is the most common way animals transfer the bovine tuberculosis to each other and to humans; however, it can also be transferred through consumption of contaminated water, feed or milk, according to the Ohio Department of Agriculture.

“Dairy workers may contact bovine TB while in close contact with an infected animal, or by drinking raw milk from an infected animal,” said California’s agriculture department. “The exposure risk beyond the affected dairies is minimal.”

There is no economical vaccine or treatment for tuberculosis in cattle, said Lee McPhail, assistant chief of the Ohio Department of Agriculture’s Division of Animal Industry.

Close to home. Ohio achieved tuberculosis-free status Sept. 19, 1990, and the last reported case in the state was in 1985, McPhail said.

Although tests are not routinely conducted for tuberculosis, the disease is still monitored, McPhail said.

“Slaughter surveillance” is conducted on all slaughtered animals. If signs of tuberculosis are found, further examination is conducted and a trace is conducted to the farm of origin, McPhail said.

Some auctions, sales and interstate movement also have testing; however, “the primary way to test is by looking at cull cows as they go to slaughter,” said Bill Shulaw, Ohio State University veterinarian.

Losing freedom. California is not yet in danger of losing its free status, McPhail said, unless tuberculosis is found in more herds within the state. The disease must be found in two or more herds within a specified period of time before the state can lose its status.

When tuberculosis is found in a cow, all circles around the animal are tested, including other animals on the farm and the herd where the animal originated.

When a state loses its TB-free status, the biggest burden is increased testing for moving animals, Shulaw said.

When an animal from an infected state is transferred to another state, an individual tuberculosis test must be done on the animal. In addition, a tuberculosis test must be done on the entire herd of origin, Shulaw said.

Tuberculosis was the main reason milk pasteurization began in the early 1900s, he said. People were drinking milk that had not been boiled and, therefore, contracted the disease from the milk of infected animals.

“Pasteurization virtually eliminated [the disease],” Shulaw said.

TB elsewhere. Texas lost its free status earlier this month after two herds tested positive for bovine tuberculosis. Therefore, Texas breeding cattle transported out of state must test negative for tuberculosis and be officially identified.

Michigan lost its free status several years ago when white-tailed deer and cattle tested positive for the disease.

(You can contact Kristy Alger at 1-800-837-3419, ext. 23, or by e-mail at kalger@farmanddairy.com.)

Innovative Ohio farmers eager to exchange ideas

January 31st, 2002 Former Farm and Dairy Reporters

LONDON, Ohio – Have something you really want to talk about, a “burning issue” or question you want to discuss? Get up, write it down and see who wants to join you.

After hearing that challenge, a dozen or more of those attending the Innovative Farmers of Ohio annual meeting Jan. 26 were on their feet and grabbing markers to put their ideas on the wall.

They were ready to brainstorm, to find out what others in the room might have to say.

“We had a couple of ‘plants’ in the audience,” said IFO executive director Laura Bergman. “But it was amazing. They were on their feet immediately.”

The largest group formed around the question regarding the connection between farmer and consumer, and what farmers would like consumers to know.

A group of more than 30 people sat down on the floor, with others leaning into the group from behind, or straining to get involved in this intense conversation.

Diverse conversations. But there were lively discussions in half a dozen groups gathered around posted questions. Members debated opportunities for young farmers, how rural and urban neighbors can coexist, how to start a political movement to bring back on-farm sale of raw milk, what might be involved in ‘green’ payments, how to deal with new state regulations for farm markets.

It took a lot of effort to break up the conversations, even though other business was at hand and another round of workshop presentations were ready to be presented.

The foundation of IFO has always been farmer-to-farmer networking, Bergman said, and this is the most direct kind.

Bergman reported to the more than 200 attending the annual meeting, held this year at the Proctor Center south of London, Ohio, that IFO has had a busy year.

On-farm research. The organization’s on-farm research trials were conducted in cooperation with other organizations, and are expected to get even stronger in the coming year.

IFO has participated with the Organic Farming Research Foundation in a SARE-funded project to conduct on-farm corn variety trials for organic farms.

It also participated in the Pleasantview Farm food grade soybean trials, testing nine food grade varieties for growing in southern Ohio. This year, IFO members will be accompanying Ohio State’s Richard Moore to Japan in March to discuss sales with Japanese cooperatives interested in buying organic soybeans.

This year, IFO will also be working with the Warner Fund for Sustainable Agriculture through OSU to link university researchers and farmers who are interested in participating in research on sustainable agriculture.

Producer meeting. A meeting of producers is scheduled Feb. 5 at the Stratford Ecological Center in Delaware, Ohio, where IFO has its offices, to let producers discuss on-farm research and to find out about available funding.

The entire membership was invited to attend.

Partnering with two other organic farm organizations, IFO also helped sponsor two farm tour series last summer.

And through the learning circles initiative funded by the Ohio Environmental Protection Agency, IFO members have experimented with establishing riparian buffer zones, improving marketing and distribution systems, promoting ecological awareness and land stewardship, and exploring the possibility of establishing local food systems.

Food systems. Bergman said the organization will begin exploring the idea of alternative food systems, doing research on what the needs are and who is doing what, and beginning a conversation with producers on what might be needed to impact the problem.

IFO hopes to create a model for regional food systems in Ohio.

Biologic farming. At the annual meeting workshop emphasis was placed on health soil and healthy profits.

Gary Zimmer, president of Midwestern Bio-Ag, a Wisconsin biological farming consulting firm, and a passionate advocate for biologically healthy soil, talked about his own farm and ways he has developed to feed his soil.

“Soil is more than nitrogen, phosphorous, potassium,” he said. “We do all these things to the soil, and we don’t really know what we’re doing. What we know about managing soil is only 1 percent of what there is to know.

“But we do know what we don’t know. We don’t know if what we are applying to our soil is safe.”

“But the object is to use as little as possible. You know you will never make your farm better for the future by using chemicals.”

Zimmer talked about crop rotations, about co-plantings with plants that are good at absorbing and preserving soil nutrients, about shallow tilling that does not disturb root channels, and other methods he has experimented with on his own Wisconsin farm.

“My goal is never to leave my dirt exposed,” he said. “I don’t want anyone to be able to see it.”

(You can contact Jackie Cummins at 800-837-3419, ext. 23, or by e-mail at jcummins@farmanddairy.com.)

Jess Aller breeds her goats for the spotlight

August 16th, 2001 Former Farm and Dairy Reporters

LOUISVILLE, Ohio – Jess Aller of Louisville gets incredibly excited when she talks about her goats. Until she met her husband, Doug, three years ago, they were the focus of her attention.

At 21, Aller has been breeding LaMancha goats for 11 years and her Celtic Knot herd prefix is already recognized in Ohio and among LaMancha breeders.

When she decides to go for her first national Spotlight Sale, she hopes to take her goats onto the national stage. Then, she said, the value of her herd will skyrocket.

“I’m not playing anymore,” Aller said of her breeding program.

Goats without ears. The LaMancha breed is apparently the result of genetic mutation from a type of short-eared goat, probably from Spain or possibly from Africa.

It was developed into a recognizable breed by a group of California goat breeders in the early 1950s.

While LaManchas now have definite confirmation standards, and are characterized as copious milkers with a good butterfat content to their milk, the most notable characteristic that defines the breed is the ears.

LaMancha goats have what is called a “gopher” ear, which looks like no ears at all because there is no visible ear flap.

“When I first saw one,” Aller said, “I thought they were ugly. I wondered why anyone would want one.”

But Aller had had a personality conflict with the first goat she had owned, a Nubian. She said it was “kind of bull headed.” In contrast, the LaManchas, often called monkey-faced and sometimes compared to E.T., have a wonderful personality, she said.

Line breeding. Aller’s goats come from the line of LaManchas bred by Edythe Jensen at Yazz LaManchas in Gilbert, Ariz.

Starting with a single doe and using a buck from Yazz, Aller started a program of line breeding that she still continues.

She still has her original doe, now retired, and has shown five of her daughters. Her prized doe right now is a granddaughter.

Aller’s mother, Sherry Hicklin of Carrollton, eventually bought that first buck, Thunder Road Tombstone, and at 9 years he is still going strong, still winning shows.

This year he was shown only three times and each time won the best LaMancha buck award. He also took a best buck in the show award.

Tombstone at 9 is also now producing semen that Aller has available for sale. Last year, on his first try, he produced 30 straws.

Basis of herds. Because artificial insemination was not really being used on goats when Tombstone was in his prime, Aller said, his genetic strengths did not really get fully used. But they are the basis of the herd she and her parents established, Joyful Morn LaManchas, and from which she has created her own herd.

This year, the combined herds have won five awards for best LaMancha senior doe and two for best of show senior doe, plus showing five grand champion senior does and five reserve champion senior does. They have also shown five grand champion junior does, and have twice won the best junior doe in show award.

Aller acquired her own Yazz buck when she was 17, Yazz, Now You See It Excel.

Fantastic animals. Breeding the daughters of Tombstone to Excel have created a line of does that are “fantastic,” she said, developing into her grand champion show animals.

To introduce new genetics into the herd without going outside of her line breeding, she has purchased two new does from the Yazz line.

They will be inseminated from a buck that is closely related to Excel.

She plans to take the first buck kid from this experiment to raise as her new herd sire, introducing new, but closely related, genetics.

After the new buck has been used once, she said, he will have to be retired into the barn for a year to see what the results will be.

If Aller is happy with the does he produces, she will then breed those does back to Excel again, repeating the cross-breeding sequence that has been so successful for her with Tombstone.

Show herd. Aller said she is breeding strictly for a show herd, looking for correct animals with good top lines, tight elbow joints, and good udder attachment.

Milking performance is also important, she said, although she has taken her herd off DHIA because it was not something that people looking at show animals were asking to see.

But because “when you have goats you have all this milk” she has also gotten her farm licensed to sell goat milk as pet food and sells raw milk off the farm to people who respond to her notice posted in the feed mill.

It mostly goes to feeding baby animals, she said, because goat milk is easier for most animals to digest than cow’s milk.

Sale of genetics. It’s not the sale of milk, however, that supports her herd. It’s the sale of animals. Right now her herd isn’t making her any profit, but it is paying for itself.

Because she wants to keep her herd small, at about 15 animals, she sells most of her kids and many of her milkers. The kids from her best animals are priced from $200 to $500.

Buck kids are a little harder to sell, she said, because buying a buck is a real investment for anyone. She sold only two this year, but has had a few more inquiries.

Aller said she will soon apply for nomination to get one of her goats into the Spotlight Sale, a national, by-invitation-only sale sponsored by the American Goat Association. Acceptance into the sale means national recognition.

What it will mean for her is a huge leap in the value of her kids and the opportunity to become competitive in national goat shows. It will also mean, however, that she will have to start selling some of her champions, something she has not yet been able to make herself do.

(You can contact Jackie Cummins at 1-800-837-3419, ext. 23, or by e-mail at jcummins@farmanddairy.com.)

Ohio’s got goats, but where does the milk go?

August 9th, 2001 Former Farm and Dairy Reporters

SALEM, Ohio – The Ohio Department of Agriculture says there are a lot of dairy goats in Ohio, second only to California.

And where there are dairy goats, there has to be goat milk.

A quick check in the dairy case of any Ohio supermarket, however, will confirm that Ohio is not particularly awash in fluid goat’s milk.

With a small herd, 15 or so goats, much of the milk is consumed by the families and friends of the goat owners.

But it is illegal in Ohio to sell raw goat’s milk or even to process raw milk into cheese and sell that out the back door or from a farm market. Goat milk not used at home has to be sold in some other way.

Goat dairy co-op. For a handful of producers who are members of the Buckeye Dairy Goat Cooperative Association, there is a marketing opportunity. They sell more than 3 million pounds a year of Grade B goat’s milk to Fleur-de-Leis plants of Bongrain Cheese, which produces goat cheeses in Pennsylvania and Wisconsin.

But because it is a closed market, with only one customer, the company dictates the market, and has for several years had its needs met at the co-op members’ current production levels.

The only opportunity to join the cooperative is to buy out a current cooperative member. According to Sharon Baum, co-op secretary, that usually happens only once or twice a year.

In most cases, she said, the member wants to sell the entire operation – goats, processing equipment, and all. There is very little, if any, opportunity to go into the co-op with an already established herd of goats.

Takes large herd. Major shippers to the Bongrain plants milk a substantially larger number of goats. The conventional wisdom is that it takes at least 100 milkers to pay for the investment in buildings and equipment.

Teddy West of Mantua, Ohio, is one of the founding members of the co-op. She has a herd of 250, and milks an average of 150.

In Pennsylvania, some of Bongrain’s major suppliers keep herds of 300 or 400 goats in order to keep their milkers at about 200.

Some dairy goat owners think about going the independent route, putting in their own processing plant so they can pasteurize and bottle or process the milk.

Willow Run Dairy of Caprine Estates in Greene County near Dayton sells Grade A bottled milk. Dennis and Patti Dean have a herd of 1,200 goats and sell milk, cheese, and ice cream out of their store, over the Internet, to a number of Cincinnati and Dayton restaurants, and through a variety of health food, speciality, and grocery stores.

Plan looked good. Sharen O’Brock of North Benton, Ohio, has recently sold most of her herd of 75 goats because she and her husband got too deeply involved in another business.

But she said she had drawn up a business plan for installing a processing plant and selling bottled milk and cheese to health food stores and to restaurants in Youngstown, Akron and Canton.

On paper, she said, it appeared to promise to become a thriving business.

Still, many goat people have considered that route before. Some have even tried. Willow Run Dairy is currently the only source of bottled goat milk and goat milk products from Ohio farms available on the market.

“People call all the time saying they are looking for goat milk. They have a baby that can’t tolerate formula, or they are allergic to milk,” Baum said. “Before we started the co-op, I was considering going that route. But when you look into it, there is probably not a very large market. A baby who can’t tolerate milk will usually outgrow it in a couple of years.

Sales limited. “The research that has been done on the market in Ohio indicates that the grocery stores that do carry bottled goat milk shipped in from out of state sell only 10 or 12 quarts a week,” Baum said.

The goat milk usually available retail is an ultrapasteurized brand processed in California.

“The average family can’t afford goat milk at over $3 a quart,” Baum said.

That roadblock seems to leave only a few other avenues for marketing goat milk.

The milk can be made into fudge and sold, but the market for fudge also has its limits.

Pet food license. Many producers get a state license to sell it as pet food. Its composition is much closer to the milk of most other mammals than cow’s milk, and producers often seek out goat milk for their feeding program.

In this form it can be sold raw and off of the farm.

The other avenue that many goat producers are attempting is goat milk soap and other beauty products. Although not widely available retail, hundreds of people with goat herds offer soap as part of their Web marketing.

Enter goat milk soap in any Web search engine, and it will turn up page after page of suppliers on a variety of farms across the country.

(Next week, a small goat breeder concentrates on genetics and merchandising, and one producer’s marketing success.)

Ohio organic dairy market gaining

November 8th, 2000 Former Farm and Dairy Reporters

SALEM, Ohio — Organic dairy is still a very small corner of the dairy market in Ohio, but it is a niche that is feeling its way into the mainstream.



It is already miles ahead of where it was a year ago when a group of organic producers approached Bunker Hill Cheese Co. (www.heinis.com) about creating a local market.



Nationally, the sale of organic dairy products is way up, and still growing by 20 to 30 percent a year. Organic milk and cheese have moved out of the natural foods markets, and are now being stocked in major supermarkets.



And in northeastern Ohio, the group that went in search of a market is now an official organic dairy cooperative with 15 members and six more scheduled to complete the certification requirements and become organic producers in the fall.



Bunker Hill is producing about 8,000 pounds of organic cheese a week, and is selling it in new markets it had never penetrated before.



And Goshen Dairy is exploring the possibility of bottling fluid organic milk, with a decision expected by the end of the summer.



So far, those who are involved haven’t found much of a downside. Even the added burden of meeting the requirements of organic production is accepted as worth the added value in market price.



According to Robert Troyer, plant manager at Bunker Hill Cheese, production of its new line of Pure Pastures Organic Cheese has gone smoothly.



There have been no problems with the certification process, and the cheese house’s sale of the organic cheeses has increased steadily.



Moving into new markets has been a challenge, Troyer said, but the cheese is now selling on the West Coast and in the Southwest, markets where Bunker Hill had never marketed its traditional line.



“I think it would be conservative to say that our production will double in the next two years,” Troyer said.



Goshen Dairy in New Philadelphia is exploring bottling organic milk as a way of increasing current production.



Goshen, which produces a full line of dairy products, now handles about 30 million pounds of milk a year. It also maintains a chain of nine retail Goshen Dairy convenience stores.



According to Hans Bishel, plant manager, the key factor in making a decision about organic production will be whether or not they are able to find a sufficient supply of raw milk. They have already been in conversation with a group of producers who say they would be interested, Bishel said.



According to Doug Daniels of Knox County, president of the newly formed cooperative, Organic Family Farms, it takes about four years for a producer to become certified if he starts from scratch.



The land on which organic feed is grown, Daniels said, has to be chemical free for three years. Then the cattle have to be fed 100 percent organic feed for nine months before the milk can be certified as organic.



However, he said, there are ways to get started faster than that.



There is already a certain amount of chemical-free pasture out there that can be used, he said, and Ohio is an old established organic crop market, so there is a lot of feed available.That means it is possible for a producer to get started without waiting for all of the ground he uses to be organically certified.



In addition, he said, there are now also a couple of suppliers of organic dairy heifers.



Most of the producers who are interested in organic production, he said, are small, looking for an alternative to the traditional milk market.



Since most dairy producers are spreading manure on their crop land now,” he said, “there’s really not that much of a change in the way you farm.”



There has been a lot of interest among producers, he said. A recent meeting called on short notice drew 75 producers.



Those who have formed Organic Family Farms range in herd size from milking 20 cows, to an average herd of about 45 to 50.



“We have to meet this Bunker Hill contract now,” Daniels said, “but when we have more supply, we intend to expand out into other products and other markets.



“I got into it for the money. I liked the 17-cent base as opposed to 9-1/2 cents. But let’s say the organic concepts are beginning to grow on me.”



He said he wished he had known before about some of the natural alternatives he is now using, such as treating infection with a combination of corn oil and aloe rather than with antibiotics.



“The science is sound,” he said. “We just didn’t know about these things before now.”



So far, Daniels said, there hasn’t been a down side. If the organic producers involved in the cooperative can continue to increase their production and can eventually retain ownership of the milk into the processing, he said, “we’ll see how far we can go with this.”