KENTUCKY
May - June w w w. k y d a i r y. o r g
Milk Matters Supported by
DAIRY
MONTH PAGE 15
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Happy June Dairy Month
Solutions for Optimizing Production
cpcfeeds.com May - June 2018 • KDDC • Page 2
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
2017 KDDC Board of Directors & Staff Executive Committee
President: Richard Sparrow Vice President: Charles Townsend, DVM Sec./Treasurer: Tom Hastings EC Member: Tony Cowherd EC Member: Freeman Brundige EC Past President: Bob Klingenfus
Board of Directors
District 1: Freeman Brundige 731.446.6248 District 2: Josh Duvall 270.535.6533 District 3: Keith Long 270.670.1388 District 4: Bill Crist, Jr. 270.590.3185 District 5: Tony Compton 270.378.0525 District 6: Mark Williams 270.427.0796 District 7: Greg Goode 606.303.2150 District 8: Stephen Weaver 271.475.3154 District 9: Dwight Leslie 859.588.3441 District 10: Richard Sparrow 502.370.6730 District 11: Stewart Jones 270.402.4805 District 12: Larry Embry 270.259.6903 Equipment: Tony Cowherd 270.469.0398 Milk Haulers: Alan Wilson 606.875.7281 Genetics: Dan Johnson 502.905.8221 Feed: Tom Hastings 270.748.9652 Nutrition: Dr. Ron Wendlandt 502.839.4222 Dairy Co-op: Justin Olson 765.499.4817 Veterinary: Dr. Charles Townsend 270.726.4041 Finance: Michael Smith 859.619.4995 Former Pres.: Bob Klingenfus 502.817.3165
Employee & Consultants Executive Director: Maury Cox 859.516.1129 DC-Central: Beth Cox 859.516.1619 • 270-469-4278 DC-Western: Dave Roberts 859.516.1409 DC-Southern: Meredith Scales 859.516.1966 DC -Northern: Jennifer Hickerson 859.516.2458
KDDC
176 Pasadena Drive Lexington, KY 40503 www.kydairy.org KY Milk Matters produced by Carey Brown
President’s Corner Richard Sparrow
W
hile the market status of the nineteen Dean Foods’ independent dairy farmers is still in limbo, there are some positives to talk about in the dairy industry. The USDA’s Margin Protection Program was improved, especially if you produce less than five million pounds of milk per year. Basically, the already known payments for February and March more than pay the premium for 2018 coverage. I hope every dairy producer signed up for this program. More importantly, there are many good market signals for improved milk prices for the remainder of 2018. International dairy demand is strong. In March, the US dairy export volume increased 26% over the prior year, setting a new record high and surpassing the previous record set in March, 2014. In April and May, the European Union Commission announced sizable sales of SMP, putting a dent in its massive inventory while demand remained strong. As New Zealand’s growing season ends, overall milk supplies decreased from the prior year by 1.5%.
CME futures markets have responded favorably. CME III milk futures experienced strength in April, increasing more than seventy cents per hundredweight. The futures market projects the second half of 2018 will average forty-seven cents per hundredweight above the same time period in 2017. As we moved into June Dairy Month, we have reason to be optimistic about better times ahead. However, we continue to keep those Kentucky dairy farm families who are dealing with uncertain futures in our thoughts and prayers.
In Memoriam The Dairy Industry lost a lifelong friend recently. Gordon Oneal Jones, age 80 of Louisville, passed away Monday, May 28, 2018 at the Masonic Homes. Originally from Fountain Run, Kentucky, Gordon graduated from Western Kentucky University with a Bachelor Degree in Agriculture. He moved to Louisville where he worked and later purchased Stockyard Farm and Dairy Supply, Inc. He was recognized for his contribution to the dairy industry. He was a member of Farmdale Baptist Church where he taught Sunday School. He was preceded in death by his wife, Joann Miller Jones; son, Ricky N. Jones; parents, Billie S. Jones, Sr. and Ruby A. Jones; and brother, Billie S. Jones, Jr. Gordon is survived by his daughter, Vicky Janes (Dean); grandchildren, Eric Jones, Megan Boles (Greg), Jason Jones and Rob Janes; 3 greatgrandchildren, Sara Janes, Raelee Crain and Colton Boles; sister, Anna Jones; nephew, Freddie Jones (Eva); his former wife, Patricia Keane; and a host of relatives and friends.
May - June 2018 • KDDC • Page 3
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Executive Director Comments Maury Cox
I
was hoping by the time this article came to press, the crisis for the dairy farmers affected by the Dean Foods cancellation notices would be resolved. Unfortunately, that is not the case. As the clock ticked down closer to zero, Dean Foods announced a “stay” so to speak, extending the deadline 30 days until July 1, 2018 for the Kentucky producers and possibly a few others not referenced. Although, most everyone welcomed the news, many feel it is tantamount to an emotional roller coaster ride that you didn’t ask to get on and have no idea of how it will end. Only time will tell. On another note, the USDA’s Agriculture Marketing Service will consider initiating the rulemaking process on a request by National All-Jersey, Inc. to implement multiple component pricing (MPC) in Federal Milk Marketing Orders (FMMO) 5 and 7. To help facilitate this process the Tennessee/Kentucky Farm Bureaus hosted an educational meeting in Knoxville, TN for dairy farmers and industry representatives with Dana Coale, Deputy Administrator of the Agriculture Marketing Service Dairy Programs. There were many KY people on hand with folks from TN, NC, GA and other states as well. The crowd was estimated by some at 275. Tennessee and Kentucky Farm Bureau Presidents’ Jeff Aiken and Mark Haney opened the meeting welcoming the large crowd and introducing Ms. Dana Coale. Ms. Coale talked briefly about her background and then on to the FMMO system, what it does, and what it doesn’t do, and then she opened the meeting for questions. The first question asked by KY dairy farmer, H. Barlow, set the tone for much of the meeting. He stated he had never seen in his many years of dairy farming a time when KY dairy farmers not only were not allowed to expand in production, but some were told there is no market for their milk. This is happening while tanker load after tanker load of milk is being brought into the state and the southeast from the north and west. He said this is not fair nor right and asked what could be done? He then asked about “bloc” voting by cooperatives where a cooperative does the voting for all members of the cooperative. According to Ms. Coale, a cooperative has a board which represents constituents within an area. This provides regional representation for the cooperative’s membership, giving a cooperative the right to vote for its members. The significance of bloc voting is producers living outside the geographic Order, can vote if they delivered milk qualifying on the Order during a specified time designated by the Market Administrator. The first question was somehow lost in the multiple questions that followed from others.
I was impressed with the questions asked by producers. It showed a deeper level of understanding of the FMMO system than meetings of the past. The Deputy Admin. responded to most all the questions but pointed out ultimately if dairy producers want the FMMO rules reformed it is up to them to make the changes. She explained the only ones that can vote are dairy farmers. She described the process, not in detail, but an overview and basically stated the Market Admin. enforces the rules set forth. A producer responded saying this brings us back to bloc voting. Ms. Coale said it is then up to producers to vote out board members and replace them with farmers that represent the majority of the membership. Ms. Coale had to leave before the meeting ended but the final segment of the meeting had Appalachian Federal Order Assistant, John Herbert present a PowerPoint on multiple component pricing (MCP). The presentation did not answer which pricing formula; skim/fat or MCP was best but did estimate MCP would add nearly $0.06/cwt. to the FMMO producers’ pool. More questions need to be answered regarding this topic. Although the KDDC Board voted not to oppose MCP if it were brought to a hearing there have been questions of late as to whether it would be best for the Southeast. That may be better answered in the hearing process.
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Farm Bill Update
Joe Cain, Kentucky Farm Bureau
C
ongress continues to work on passage of a new farm bill prior to the current legislations expiration on September 30, 2018. The House came up short on May 18 when HR 2, the Agriculture and Nutrition Act of 2018 failed 198-213, but a motion to reconsider was entered with the vote extended until June 22, 2018. However, if the motion to reconsider is approved, the vote on HR 2 will be on the bill as amended on May 18. There will be no additional amendments offered to the bill. The HR 2 does not make wholesale changes to current farm bill legislation, but it does make changes to some programs dairymen utilize, namely the Dairy Margin Protection Program (DMPP). Under the House proposal, DMPP goes away to be replaced by the Dairy Risk Management Program (DRMP), adopting key details passed in February in the Bipartisan Budget Act of 2018 (noted below). It is also interesting to note the bill would allow producers to participate in both the DRMP and Livestock Gross Margin-Dairy program but not on the same milk production. Several modifications to USDA’s Dairy Margin Protection Program were made in the Bipartisan Budget Act and directed USDA to reopen signup for the 2018 coverage year. The modifications made to MPP were designed to make it a more attractive risk management tool for small- and medium-sized dairy operations by reducing premium rates, delivering payments monthly, increasing the catastrophic coverage levels, and making more milk eligible for discounted coverage. Producers had until June 1 to make new MPP coverage elections with coverage
May - June 2018 • KDDC • Page 6
retroactive to January 2018. For more than 90 percent of the farmers previously enrolled in the program, coverage during 2018 of 5 million pounds or less is expected to be positive, i.e., program payments will be greater than the insurance premiums. It’s widely known that despite milk prices falling by more than 50 percent since 2014, MPP offered very little financial support to the struggling dairy industry. Farmers paid nearly $100 million in premiums and administrative fees, and received approximately $12 million in program payments, representing a loss ratio of 12 percent. That changed in 2018. The Bipartisan Budget Act of 2018 modified MPP to make the program more affordable and to ensure more timely program payment delivery. The changes to MPP include calculating program benefits monthly instead of bimonthly, reducing the premium rates for Tier 1 coverage by as much as 80 percent, increasing the Tier 1 eligibility to 5 million pounds of covered milk, up from 4 million pounds. This effectively increased the minimum catastrophic coverage level for small-and medium-sized dairy operations. During 2018, milk prices and MPP margins reached the lowest levels since 2016. Due to the multi-year downturn in milk prices and financial hardships faced by dairy farmers, as well as the poor historical performance of MPP, Congress made several modifications to the program in the Bipartisan Budget Act of 2018. Following the congressional action, USDA reopened signup and made the benefits retroactive. Farmers have until June 1 to finalize their coverage elections for 2018. Kentucky Farm Bureau will continue to provide informational updates as the farm bill debate continues in Congress. Contact Joe Cain at joe.cain@kyfb.com for more details.
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Can You Get More Pounds of Milk Fat From Your Dairy Herd? Thomas Sumner and Donna M. Amaral-Phillips, Ph.D, University of Kentucky Dairy Group
W
ith various on-farm milk markets implementing a form of supply management where a limited amount of milk production receives class 1 prices, farmers are looking for ways to increase their milk checks. Increases in butterfat content is one solution often evaluated while keeping volume within the farm’s set monthly production. Assuming a herd produces 200,000 lbs milk monthly, increasing the butterfat content by 0.1% would increase the milk check by $460 when butterfat is worth $2.30/lb. In addition, discussions are ongoing regarding implementing multiple component pricing in the Appalachian and Southeast Milk Marketing Orders. If this pricing system is approved, KY farmers will be paid for pounds of milkfat and protein produced versus pounds of milk volume sold. Thus, efficiently producing pounds of milk fat and protein will be paramount to your income found in your milk check. This article reviews some areas to evaluate which influence milk fat percentage and yield. Factors outside your immediate control: Some factors, which influence butterfat content of milk, are not controllable but management can decrease their effect on butterfat percentage. Some of these factors include the following: 1. Breed: An example that often comes to mind relates to the breed of cows in your herd. Generally, Holsteins produce milk with a lower percentage of fat and protein than other purebred dairy breeds or crossbreds. However, butterfat percentage is highly heritable and can be altered through genetic selection practices. Breeding cows to higher component sires does positively influence butterfat content and is ultimately under a farmer’s selection or control, but takes a few years to change. 2. Higher producing cows: Higher producing cows may have
a lower milkfat percentage, but they contribute more total pounds of fat to the bulk tank because of higher total yield. 3. Stage of lactation: Early lactation cows within 60 to 90 days in milk generally have the lowest milk fat percentage. However, these cows are at their peak production and thus total yields of fat reflect their higher total milk production. 4. Time of year: Butterfat content is generally the lowest in the summer. Some of this response relates to day length. However, the higher environmental temperatures and humidity result in heat stress on cows. Heat-stressed cows eat less and produce less milk along with a reduced butterfat content, thus further reducing total fat yields. Proper spacing, routine maintenance, and correct usage of fans and sprinklers can help reduce these effects. Management practices impact butterfat: Luckily, sound management practices can help improve or optimize butterfat yields. 1. Manage heat stress: While we cannot control outside environmental temperatures and humidity, we can help milking and dry cows stay as cool as possible during the summer months. Fans should come on when temperatures are above 65°F. Placing them on thermostats with automatic temperature sensors can turn fans on automatically when temperatures reach this threshold regardless of the time of year. Routine maintenance of fans, which includes cleaning fan blades, replacing fan belts, and evaluating positioning and location of fans, should be completed at least before the hottest times of the year. Use of evaporative cooling methods, i.e. sprinklers/soakers and fans at the feed bunks and holding pens, help improve intake and decrease heat stress. 2. Prevent overcrowding: Overcrowding increases competition for access to the feedbunk and use of freestalls. Both increase stress for the cow. Overcrowding at the feedbunk results in larger meals and less even feed intake throughout the day. Both factors negatively influence the rumen environment that can decrease milk fat yield.
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May - June 2018 • KDDC • Page 8
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3. Cows need 12 to 14 hours of rest daily: A cow’s time budget must be maintained and be consistent, as much as possible, from day to day. Lactating cows should not be away from their pen for more than 1 hour at a time to be milked and should spend a minimal amount of time in headlocks for general management practices, such as heat detection or health and reproductive checks. Comfortable stalls or area for cows to lie down and ruminate is important. Rumination or cud chewing helps buffer the rumen contents and has a positive effect on milkfat synthesis. Feeding protocols impact butterfat: Besides the ingredients used in rations, the management of the feeding program can affect the “health” of the rumen. 1. Practices in TMR-fed herds: The key is to have a TMR mix that is uniform and prevents or minimizes sorting by the cows fed the diet. The mix should not be over or under mixed. Long forages should be processed so that when fed out, the hay or baleage is evenly distributed throughout the feedbunk and is consistently the width of a cow’s muzzle. To achieve this objective, TMR knives need to be sharp and not worn, feeds added in the correct order to the center of the mixer, and scales calibrated. Accurate and consistent amounts of each feed need to be added to each batch and to batches fed at different feedings or days. The mixer needs to be working correctly with the kicker plate or plow in the correct position for proper mixing. To prevent feed from heating, wet feeds/forages should be removed from storage and added to the mixer at feeding time. Cows should be fed at least twice daily especially during the warmer parts of the year. The goal is to minimize sorting and insure the cow has enough chew factor in the diet to allow proper rumination and saliva production to help maintain rumen pH. 2. Component Fed Herds: Feeding large amounts of grain, greater than 6 lbs per 4-hour window, can decrease rumen pH and decrease milkfat percent and thus yield. Feeding hay one hour prior to the grain will help maintain fat test. 3. Readily accessible feed: Pushing up feed every 30 minutes for the first 2 hours after putting feed out will also help increase your butterfat percentage. Pushing up feed additional times daily is needed to help cows readily reach feed. Do not let the feedbunk get empty before the next feeding. Amounts of feed fed need to be adjusted at each feeding to reflect the number of cows and intake patterns of cows. Cows generally eat less during the summer and eat more at night than during the day. 4. Minimize sorting by cows: The key is to get cows to consume the diet in the proportions balanced by your nutritionist.
Diet management and composition affects butterfat: The rumen bacteria and protozoa digest fiber, starches, and sugars found in a dairy cow’s diet. The fiber-digesting bacteria like a higher pH than those that digest starches and sugars. To have both types of bacteria produce products that the cow uses to make milk fat and protein, maintaining a somewhat consistent and optimum pH is important. Essentially, the rumen pH should spend a minimal amount of time under 5.8. Some nutritionist refer to this approach as “maintaining a healthy rumen” population of bacteria and other microorganisms. Nutritionists try to balance rations such that rumen bacteria make products the cow uses to make milk components and not those that hinder milk fat synthesis. 1. Amount of Starch: Adequate, but not excessive amounts, of starch should be fed. Also, remember that the digestibility of starch changes as corn silage or high moisture corn or earlage undergoes fermentation and storage. The digestibility of the starch in these feeds increases with length of storage. Corn silage harvested and then fed one-month post harvest is not the same as that fed 6 months later. 2. Adequate but not excessive amounts of fiber: Adequate amounts of fiber are needed to support rumination or cud chewing. When cows ruminate, they secrete saliva that buffers the rumen. This helps maintain a favorable pH and “healthy rumen”. 3. Diet Composition: Higher corn silage diets or those incorporating grazed young immature forage are at higher risk for lower butterfat percentages. The total amounts and types of unsaturated fatty acids found in these feeds and grains can increase the risk for a lower butterfat content. 4. Fat content of diet: When butterfat content is low, a proposed solution might be to just add more fat to the diet, but be aware of the consequences of adding too much fat. When feeding fats remember, that too much fat can cause the microorganisms and forage particles to become coated in fat. In addition, the types of fats fed can have a negative impact in the rumen and result in a depression in milk fat synthesis in the udder. Bottom line, not all fats are equal and adding more fat may make the situation worse depending on the original diet. Bottom Line: Keeping these tips in mind when feeding and managing your herd can help insure or at least minimize decreases and help optimize butterfat yield and thus gross milk income. Decreases in milk fat can occur within a short time frame, i.e. one milking, but once the factor(s) influencing the drop are corrected, it may take 2 weeks or more before milk fat percentage and yields are corrected. Implementing sound feeding and management practices that reduce stresses and help maintain a healthy rumen microbial population are the cornerstones to optimizing milk fat synthesis.
May - June 2018 • KDDC • Page 9
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Dixie Dairy Report March 2018 Calvin Covington
ccovington5@cs.com (336) 766-7191
Butter, cheese, nonfat dry milk powder (NFDM), and dry whey prices moving higher. Sooner and quicker, than most dairy market watchers expected, the four dairy commodity prices that set federal order class prices are increasing. Both, the CME March and April butter prices, are record highs with April over $0.20/lb. higher than last April. On the cheese side, the CME April block cheddar average is over $0.10/lb. higher than a year ago, and barrel cheddar is $0.04/lb. higher. However, the Dairy Product Sales Report (DPSR) price for NFDM is still about $0.12/ lb. and the DPSR dry whey price over $0.25/lb. lower than a year ago, but prices of both are slowly advancing, and inventories are stabilizing. Strong demand is moving commodity prices higher. Through the first two months of this year, on a total solids basis, total demand (domestic and export) is 3.41% higher than the same period a year ago. Domestic demand is up 1.71% and exports are up 13.86%. On the other hand, milk supply for the first quarter of 2018 is 1.5% higher than the first quarter of 2017 (see below). Outside the U.S. Dairy Market News reports production in Europe is lower than processors had anticipated, and in New Zealand March production was 1.5% lower than a year ago, and dairy product inventories are low. Milk production lower in the southeast. As stated above, for the first quarter of 2018, nationally, milk production is 1.5% higher than a year earlier. For the third consecutive month, cow numbers have declined. At the end of March the nation’s dairy herd is estimated at 9.406 million head, 2,000 lower than February. Dairy cow slaughter, during the first quarter of 2018, is 5.5% higher than the first quarter of 2017. Unlike a year ago, production is up 2.7% in California, and up 4.5% in the Northwest. Production is lower in the Northeast and almost flat in the Midwest. Higher production in California is due to more milk produced per cow. In the Southeast states, first quarter milk production is 1.8% lower than a year ago. Lower production is due to less milk per cow. Southeast cow numbers are similar to a year ago. In the ten Southeast states, Kentucky is the only state with higher first quarter production, up 4.8%. Production is flat in North and South Carolina, but down in the other seven states, including down 2.2% in Florida, down 4.8% in Georgia, and down 1.4% in Virginia. Class I usage down almost 1%. In the three southeastern federal orders and Virginia Milk Commission, total Class I usage by pool plants, for the first quarter of 2018 compared to the first quarter of 2017, is down 0.9%. As shown below average daily Class I pounds are down in Florida and the Southeast orders and Virginia, but up a strong 2.1% in the Appalachian order. Higher blend prices projected. Due to increasing dairy commodity prices, our blend price projections are higher, compared to previous months. However, our projections are not as high as current future prices would indicate. This is due to concerns that
May - June 2018 • KDDC • Page 10
dairy exports will not remain at the current high level. Plus, higher farm prices most often lead to increased milk production. Hearing request. USDA received a request to hold an administrative hearing for the Appalachian and Southeast federal milk marketing orders. The request asks for multiple component pricing (MCP), along with an adjustment for somatic cell count (SCC), be implemented into these two orders. Under the proposal, Class I milk would continue to be priced based on skim and butterfat. Class II and IV milk priced on nonfat solids and butterfat. Class III priced on protein, other solids, and butterfat. The MCP proposal prices producer milk based on pounds of protein, other solids, and butterfat, regardless of how the milk is utilized, plus an SCC adjustment +/- 350,000. Fluid differentials and other adjustments are paid through the producer price differential per cwt. All other federal orders, except these two southeastern orders, plus Arizona, and Florida, have used MCP since 2000. Primary reasons given for the MCP proposal are: 1) Better facilitate the movement of milk from marketing areas, surrounding the Appalachian and Southeast orders, into the two marketing areas. 2) Not encourage the movement of above average component milk, physically located in the Appalachian and Southeast orders, to the orders that use MCP. In the orders currently using MCP, the majority of the milk is utilized in Class II, III, and IV. As a result, MCP provides the economic incentive to increase total pool dollars available to pay dairy farmers. Due to the 70% Class I utilization in the Appalachian and Southeast orders, and much of the area’s Class III and IV milk marketed as surplus, the opportunity to increase total dollars available to pay dairy farmers is not significant. MCP, in these orders, is mainly a redistribution of pool dollars from low to high component milk producers. This request makes the fourth attempt to implement MCP in part or all of the southeast orders. The first attempt was at a hearing in the 1960’s held for one of the old West Florida orders. The second was in 1989 at the Carolina order promulgation hearing. And, the third as part of federal order reform implemented in 2000. USDA did not recommend implementing MCP in any of these attempts due to the southeast’s high Class I utilization, little economic justification, potential conflict with the Agricultural Adjustment Act, and limited producer and cooperative support. U.S. MILK PRODUCTION by REGION – 1st Quarter 2018 versus 1st Quarter 2017 Region
2017
2018
Change %
(billion lbs) Southeast
2,509
2,465
-1.8
Midwest
16,780
16,929
0.3
California
10,038
10,314
2.7
Northeast
7,849
7,741
-1.4
Northwest
7,472
7,808
4.5
Southwest
6,537
6,803
4.1
Plains
2,277
2,314
1.6
10
11
5.8
53,562
54,385
1.5
Alaska + Hawaii Total
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Milk Prices
SOUTHEASTERN FEDERAL ORDERS and VIRGINIA MILK COMMISSION DAILY AVERAGE CLASS I UTILIZATION 1st Quarter 2018 versus 1st Quarter 2017 Region
2017
2018
Change %
(billion lbs) Appalachian Order
12.22
12.48
2.1
Florida Order
6.85
6.63
-3.2
Southeast Order
11.87
11.56
-1.5
Virginia Commission
2.17
2.13
-1.5
Total
33.10
32.80
-0.9
PROJECTED BLEND PRICES–BASE ZONES – SOUTHEASTERN FEDERAL ORDERS Month
Appalachian
Florida
Southeast
(dollars/cwt) - 3.5% butterfat April 2018
$16.48
$18.58
$16.70
May
$17.02
$19.04
$17.21
June
$17.46
$19.68
$17.88
July
$17.81
$19.98
$18.22
August
$18.15
$20.22
$18.68
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270-465-2679 or 270-651-2643 Tire Scraper May - June 2018 • KDDC • Page 11
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No Room With the ‘In’
With 30-day extension from Dean Foods, Kentucky dairy farms see little hope for future Sherry Bunting Special for Farmshine
S
MITHFIELD, Ky. — “It’s down to the wire and we’re (still) working on a hail-Mary,” says Maury Cox, executive director of the Kentucky Dairy Development Council (KDDC). Meanwhile half a dozen of the 19 Kentucky dairy farms affected by Dean Foods milk contract terminations have already sold their cows and many others are in the process of incrementally downsizing their herds as the new July 1 termination date approaches.. According to Cox, the KDDC and other state officials are still working, leaving no stone unturned, for these producers, but giving up hope.
With their barn already half empty as they have begun selling their herd, Curtis and Carilynn Coombs told their story on CNBC’s Power Lunch business report Friday, June 1. They said the letter from Dean Foods came as a shock. They are the third generation to operate Jericho Acres Dairy, Smithfield, Kentucky.
“It was heartbreaking to watch, my husband and all of our hard work get loaded up on a trailer. These animals are an extended part of our family,” Carilynn said in the CNBC report, noting that the couple is looking at how to go forward either with beef cattle or try to start an agritourism business at the farm. “It’s devastating,” Curtis added, getting emotional. “My son told me the other day after the cows left, he said, ‘uh, are the cows
extensions, mainly because their contract renewal dates were different, and Dean could utilize the milk.
In Kentucky, there is the added and unusual situation of an 800cow dairy not being able to move into their new 8-robot dairy barn because the processor receiving their milk classified the second location, two miles from the main barn, as a startup instead of an existing patron’s modernization project that in total represented a modest expansion. As the new robot barn sits empty, and many contacts have been made with no takers, Kentucky dairy leaders scratch their heads at the gate-keeping that is going on — wondering how is it possible that these things are happening? That in a milk deficit region, just two loads of milk from 14 former Dean Dairy Direct farms — that now have until July 1 — can’t find a home?
It doesn’t make sense. The movie playing-out in Kentucky could come to other theaters in the eastern U.S., and the previews are already being shown. After last week’s Farmshine story, we heard back from DFA’s John Wilson in our effort to clarify excess milk references and membership restrictions.
When asked more specifically how “excess milk” is determined to be a problem in a milk-deficit area, Wilson replied in an email that the “excess milk situation is really the region, not specifically Kentucky.” Maps are illustrative. Comparing the DFA Area Council Map, above right, to the USDA Federal Order Area Map, above left -note how in the DFA Area Council Map, the lines are drawn with the navy blue of DFA’s Mideast Area Council dipping straight into the maroon of the deficit Southeast Area Council, right through central Kentucky, for example.
Seeing the subtle differences in these maps makes it apparent that the decisions of Area Councils about members and milk can be weighted toward surplus transport between Orders within Area Councils and bordering them. In fact, according to USDA’s pool and price statistics for first quarter, January through March 2018, the growing and surplus Mideast Order 33 pool received 5.5% less milk than a year ago while the Appalachian Order 5 pool received 6% more milk than a year ago. gone?’ I said ‘yeah.’ He said, ‘I’ll go find them for you.’ You know, we’ll always have a farm and he’ll always get to drive the tractors and probably work cows, but it just won’t be the same.”
In southern Indiana where seven producers were unable to find a market, Doug Leman, executive director of Indiana Dairy Producers, indicates that some are drying off cows, others are selling, and one is getting into on-farm milk processing. There are a select few that have been offered 30-day Dean contract
May - June 2018 • KDDC • Page 12
Kroger Co. bottles 100% of its store-brand milk at its own plants, including the Kroger Winchester Farms Dairy plant in Winchester, Kentucky. The plant is not far from the Kentucky farms with displaced milk, but it is 80% supplied by Select Milk Producers and 20% by Dairy Farmers of America (DFA).
This billboard picturing Holstein dairy cows grazing and a large Kroger Co. logo with the words “proud to support Kentucky farmers”, popped up recently on I-65 North in Louisville, Kentucky. Emails and calls to Kroger Co’s communications
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
department have gone unanswered, but producers in the area believe the poor timing and illustration may be associated with a Kroger beef product sourced to Kentucky, while Kroger’s milk bottled in Winchester, Ky. comes largely from Select Milk Producers in Indiana, Michigan and Ohio.
As reported last week, Prairie Farms, Select, and DFA own or supply milk processing assets in the state and region, and Prairie Farms is working with Walmart to source milk, while also bottling for Walmart while the Fort Wayne plant startup is delayed. Prairie Farms, Great Lakes Milk Producers and Foremost Farms are the three cooperatives, along with Walmart’s independent milk contracts, meeting the single-source loads requirement for Walmart’s new plant in Fort Wayne, Indiana.
While Walmart touts the milk for its new bottling plant, once fully operational, will come from within 180 miles of the Fort Wayne plant, the plant’s reach in Great Value bottled milk distribution will be much farther — up to 300 miles away where milk that is more ‘local’ to those Walmart stores in Kentucky and southern Indiana is displaced. So far, none of the cooperatives working with Walmart have taken on this southern milk.
New members are a problem for Prairie Farms when their own members are on a quota system, and yet, the cooperative is working with other cooperatives and Walmart to source and buy milk to supply a consumer need that was previously sourced from the dropped herds via Dean Dairy Direct. Even Bluegrass Dairy and Food -- a dairy powders and ingredients company with plants in Glasgow and Springfield, Kentucky balancing milk supplies in the region and no longer owned exclusively by the Williams family who founded it in 1995 -- is not taking the displaced milk.
The majority of that company was purchased in 2010 by a private investment firm, according to a 2010 story in the Cheese Reporter. Sources indicate Bluegrass cannot accept the displaced milk from independent producers because they are completely co-op supplied and balance co-op milk at the two Kentucky plants as well as a third plant in Dawson, Minnesota.
Meanwhile, of the over 100 dairy farms in eight states affected by the Dean contract terminations, it has been the willingness of smaller regional bottlers and smaller regional cooperatives to mobilize compassion, leadership and local marketing efforts to pick up the slack. As Walmart’s new milk sourcing with the “Midwest supplychain” gets underway ahead of its new Fort Wayne plant becoming fully operational, the 90 to 100 million gallons of milk per year (roughly 800 mil. lbs) are already being moved away from regional bottling and distribution channels to consolidated sourcing and distribution. The biggest effects are at the farthest edges of the new Fort Wayne plant service area, like Kentucky, where displaced milk is still unable to find buyers. It is not an issue of no processors for the milk. The issue is the gates to these processors are closed to independent producers because they are not already members of the cooperatives CONT’D ON PG. 14
May - June 2018 • KDDC • Page 13
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
manning the gates.
overnight. It is not an oversupply problem or a quality problem. It is a marketing problem.”
In his Milk Matters president’s corner, Sparrow offers this commentary: “It is a really sad commentary on the state of our dairy industry that all the major fluid milk processors in Kentucky have a large percentage of their day-to-day milk supply coming from farms hundreds of miles outside our state’s boundaries. Yet, at the same time, Kentucky dairy farm families can’t find a home for their milk,” writes Sparrow. “This situation did not happen
“They are putting us out,” he says. “I think we are looking at the complete demise of Kentucky’s dairy industry. I think that is what we are seeing.”
CONT’D FROM PG. 13
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KDDC executive director Maury Cox said in a phone interview that he did not want to be negative. However, when he looks at the whole picture of the market, the increased hauling and marketing fees, the quota programs and base-excess programs in this milkdeficit region, the amount of milk being sold $1.00 or more below mailbox price, and the effect of potentially losing these producers upon the infrastructure for remaining producers, he admits that it is difficult to see light at the end of the tunnel.
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Don’t miss your chance to reach dairy producers all across the state of Kentucky. There is no other publication that reaches all dairy producers. Call Carey today for more information at (859) 948-1256.
Since we opened in 1979 we have been dedicated to the well-being of animals, and the people who own and care for them. In honor of Dairy month, we as a team are taking pause to stop and say thank you. Thank you for the late nights, early mornings and long days. Thank you for working relessly so that our families can enjoy cold milk in their cereal, gooey grilled cheese sandwiches on rainy days and ice cream cones on summer evenings. And finally, thank you for entrussng your business to our team. We sincerely appreciate the opportunity to work with you to help you provide the most economical and effeccve nutriion for your herds.
May - June 2018 • KDDC • Page 14
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
June Dairy Month Proclamation
J
une Dairy Month was proclaimed in Kentucky by Governor Matt Bevin, on the Kentucky Capitol lawn May 31, 2018. Joining the Governor were KY Commissioner of Agriculture, Ryan Quarles and Warren Beeler, Executive Director of the Governor’s Office of Agricultural Policy and many other supporters of the Kentucky Dairy Industry. Dairy is a significant industry in KY generating nearly $200 million in farm-gate receipts to more than 550 dairy farm families in the state. The $200 million is just a drop in the “milk pail” when considering the economic ripple effect each cow generates every year in communities across the state. Studies from Wisconsin estimate a single dairy cow creates nearly $14,000 in economic impact in communities. Recently two dairy farmers reported to the KY House Agriculture and Small Business Committee, they spent over $700,000 in expenses with local businesses and venders operating their dairy farms. This economic impact grows exponentially when considering the jobs from direct farm employment, to milk hauling, to processing and delivery to the retail coolers. Additionally, there are many supportive industries that depend directly on dairy farmers such as veterinarians, feed and supply companies and dairy equipment dealers. Dairy begins with the farmers and their cows but as anyone can see involves so much more to KY’s local communities.
The Dairy Proclamation was a great time to celebrate the many benefits and attributes of milk and dairy products and honor the dairy farm families that produce such a wholesome product day in and day out. Casey County dairy farmer and KDDC Board Member, Greg Goode and his daughter Emily, brought a cow and heifer calf to the event. She enjoyed all the attention received from the nearly 200 people that gathered for the signing of the Proclamation. Several dairy farmers were in attendance along with Chaney’s from Bowling Green, serving up delicious ice cream from the Chaney’s mobile Dairy Bar. Cheese makers, Ronnie and Clara Patton, East Bernstadt, had an assortment of their tasty Wildcat Mountain Cheese and Ed-Mar Dairy from Walton offered a variety of their mouth-watering Artisan cheeses too. Boone Creek Creamery, Lexington brought several of their hand-made cheeses for tasting as well. KY has grown in micro-processing of dairy products and these artisan cheese makers are just a sampling of micro-processors operating in the state. You can check them out on-line and visit their operations or order products direct. Dairy leaders from several organizations were also present including Ronnie Patton, President of the KY American Dairy Association, Denise Jones, The Dairy Alliance, Maury Cox, KY Dairy Development Council and Joe Cain, KY Farm Bureau. Special thanks to the event organizers Eunice Schlappi, Dairy Specialist, KY Department of AG, and Gary Gupton, Director of Communications for Tourism KY State Government.
May - June 2018 • KDDC • Page 15
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Glenn Sageser - Holstein USA Field Representative Retires After 30 years and over a million road miles, I have decided to say farewell to Holstein USA and pursue other interests – namely spending more time with my wife, six grand kids and FISHING. If there is a way to combine these goals, that will be great. Otherwise look for me in a boat on a lake. Signing on with Holstein on July 1, 1988 was a natural extension of what I had done all my life. My parents, Ralph and Jean Sageser, raised three “Sageser Boys” on a sizeable dairy farm in Shelby County and the rest just fell into place – eventually. After graduating from the University of Kentucky with a degree in Agriculture Economics and making a lot of great contacts within the UK Ag Program, it was logical to assume I’d spend the biggest part of my career in the dairy industry. At Holstein USA I started working as a Field Representative in Kentucky, Tennessee and Southern Indiana. The last five years have been spent mostly in Kentucky, Tennessee and Ohio. Overall, I have worked as a field rep in part or all of 15 states. While working with these fine members to assist them in improving their herds I have made more friends and lifetime acquaintances than I would dare to count. Dairy has been my life and I’m excited and proud that my grand-
daughters have followed that passion by being involved in showing dairy cattle for several years. The older two have also been Holstein and Shorthorn Queens representing both breeds. Morgan and Kendall have also received college scholarships from the dairy industry in various forms. I am proud of them and they are honored to give back. And although I have always been a Holstein proponent I have been fortunate to have worked with others in the industry to help increase the awareness of the Milking Shorthorn breed as a vital part of the show circuit. It has been a pleasure to have been a part of Holstein USA and I appreciate all the experiences I have gained through my 30-year employment. - Glenn Sageser
REGISTRATION
KDDC SUMMER DAIRY TOUR SOUTH WESTERN KENTUCKY (CHRISTIAN, TODD, & LOGAN COUNTIES)
JULY 24, 25
FIRST PERSON ATTENDING
SECOND PERSON ATTENDING
(ALL TIMES ARE CST)
July 24th 8:45 Leave Tour Headquarters - Comfort Inn 210 Harvey Way Hopkinsville, KY 9:00 – 10:15 MSU Breathitt Veterinary Center – 101 MSU Drive Hopkinsville, KY 10:30 – 11:45 Steve Miller Dairy – 998 Lewis Road Crofton, KY 12:15 – 1:15 Lunch 1:15 – 2:15 James Nolt Dairy – 225 Bond Road Pembroke, KY 3:00 – 4:00 Mark Hoover Dairy – 4350 Butler Road Elkton, KY 4:20 – 5:20 Enos Yoder Dairy – 3104 Old Trenton Road Guthrie, KY 5:40 – 6:40 Steve Weaver Dairy – 6428 Old Edwards Mill Road Hopkinsville, KY 7:00 – Dinner at The Silo – Alltech presentation July 25th 8:30 – Load up at hotel to leave 9:00 – 10:15 Kentucky Organic Farm and Feed Inc. 4050 Guthrie Road, Guthrie, KY 10:30 – 11:45 Melvin Troyer Dairy 2620 Old Railroad Ln. Guthrie, KY 12:30 – 1:30 Lunch Logan County Extension Office 255 John Paul Road Russellville, KY 2:00 – 3:15 4W Farm 4596 Halls Store Road Russellville, KY 3:15 Tour Over
May - June 2018 • KDDC • Page 16
ADDRESS
HOME PHONE
CELL PHONE
$30 PER DAIRY FARM FAMILY • $50 FOR HOTEL CHECK HERE IF YOU WILL NEED A HOTEL ROOM FOR 7/24 $30 EACH FOR ALL OTHERS/INDUSTRY REPRESENTATIVES (HOTEL NOT INCLUDED)
MAKE CHECKS PAYABLE TO: KDDC SEND REGISTRATION/CHECK TO: EUNICE SCHLAPPI KENTUCKY DEPT OF AGRICULTURE 111 CORPORATE DRIVE FRANKFORT, KY 40601 OR EMAIL TO: EUNICE.SCHLAPPI@KY.GOV
ALL FEES PAYABLE AT TOUR
2 2
2018 Kentucky Dairy Facts Your milk starts on one of
600 dairy farms in Kentucky
Each Kentucky dairy cow provides an average of
2,162
gallons of milk per year The total amount of milk produced in the state amounted to
1.00
1.00
$1,615
Kentucky is
27 th 27
93
milking cows
in milk production in number of dairy cows in the United States
Kentucky is home to approximately
56,000
milk cows
That’s about
71 2.9
gallons of milk per day
Which is enough to make
Or
61
pounds of butter
pounds of cheese
That’s equal to
121
million gallons
billion pounds
In 2017, a dairy cow in Kentucky cost about
th
A typical Kentucky dairy farm has a herd of about
The average value of a day’s milk per cow was about
$11.03 37 th 13
th in milk
84%
of all milk produced in 2017 was used and consumed in the form of fluid milk
2017 top milk producing counties were:
1. Barren (122.6 million pounds) 2. Logan 3. Adair (94.2 million pounds) 4. Christian (85.8 million pounds) 5. Warren
To learn more, visit thedairyalliance.com
output per cow in the number of licensed dairy operations
*All facts are based on 2017 USDA and KDA data
TM
.com alliance dairy the
Brought to you by the dairy farm families of Kentucky.
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
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S P E C I A L T H A N K S T O O U R
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May - June 2018 • KDDC • Page 19
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2018 CALENDAR OF EVENTS June 20 Tri-County Dairy Meeting – Trenton Farm Supply, 8:00 A.M. to 3:00 P.M. C.T. June 23 Marion Co. Dairy Day – Marion Co. Fair Grounds – Dairy Show, 10:00 A.M. E.T. June 22-23 Western Rivers Western Jr. Livestock Expo. William “Bill” Cherry Ag, Expo. Center, Murray KY June 28 Shelbyville 4-H District Dairy Show, Shelby Co. Fairgrounds, 9:00 A.M. E.T. July 07 Liberty 4-H District Dairy Show, Casey Co. Fairgrounds, 10:00 A.M. E.T. July 10 Kentucky State Fair Livestock Entry Deadline
July 24-25 KDDC Dairy Tour, TBA
August 18-21 KY State Fair Open Dairy Shows, KFEC
July 27 KDDC Board Meeting, Nelson Co. Extension Office, 10:00 A.M.
August 23 KY Farm Bureau Ham Breakfast, 7:30 A.M.
July 29-31 The Dairy Alliance Meeting, Biloxi, Mississippi August Advanced 4-H Dairy Judging Workshops, Held on Saturdays, TBA August 15 KY State Fair Dairy Skill-a-thon & Pizza Party, 7:00 P.M. August 16-17 KY State Fair 4-H/ FFA Dairy Shows, KFEC August 16 Advanced 4-H Dairy Judging Workshop, KFEC
July 12 Horse Cave 4-H District Dairy Show, Burley Fields Livestock Center 9:30 A.M.
August 16 KY State Fair Commodity Breakfast, 7:00 A.M.
July 18 Tollesboro District Dairy Show, Tollesboro Fairgrounds
August 17 Advanced 4-H Dairy Judging Workshop, KY Fair and Expo Center
July 20- 21 Kentucky Junior Livestock Expo., L.D. Brown Ag. Center, Bowling Green, KY
August 16-26 KY State Fair, Louisville, KY
August 28-30 Kentucky Milk Quality Conference, Lake Barkley State Park, Cadiz, KY September 06 CPC Fall Field Day, Fountain Runn, KY 9:00 A.M. September 17 PA All- American Invitational 4-H Dairy Judging Contest, Harrisburg, Pa. September 28 KDDC Board Meeting, Bardstown, KY 10:00 A.M. E.T. Sept 30-Oct 04 National 4-H Dairy Judging Contest, World Dairy Expo. Madison Wi. October 02-05 KDDC Young Dairy Producer Bus Tour, World Dairy Expo. Madison, Wi.