PDPW Dairy's Bottom Line January 2018

Page 1

Volume 20: Issue 1 January 2018

BOTTOM LINE Sharing ideas, solutions, resources and experiences that help dairy producers succeed.

Attitude is everything PDPW staff

Page 2 Calves raised in pairs show advantages

Page 7 Save the date for Dairy’s premier event

Page 8 More leaves means higher quality

Page 12 Maintain your dairy’s legacy

Every new year brings an opportunity to reflect on the past and make plans for what lies ahead – in business, family and personal matters. While there are things we can’t directly control – the weather and the cost of feed, milk or land – there are several things we can control, including the way we spend our time and the attitude we choose. “You choose your attitude every morning,” said Marty Hallock, first-generation farmer of Mondovi, Wisconsin. “If you choose the wrong one, you affect everyone around you and we all have a big circle of people we influence.” Our cows can’t afford for us to have a bad day and neither can our families. Fortunately, focusing on things we can impact in a positive way can make all the difference. As PDPW Board president, Hallock said he’s a firm believer that choosing the right attitude goes hand-in-hand with a commitment to ongoing education. “Lifelong learning really is the ticket and spending time with other positive-minded dairy farmers is so helpful – there’s always something we can learn from each other,” he said. Risks and tight margins aren’t uncommon to dairying but solutions are always available for those who pursue them. “We can’t farm only in the good times,” Hallock said. “That’s not how it works; we’re in a cyclical business. With the right attitude, you can choose to celebrate the little victories as you go. Focus on what needs to be done next rather than getting overwhelmed by the big picture.” Often the next step is simply pursuing additional learning opportunities. Like many dairy producers, Hallock said he finds great value in hearing directly from those who have “been there, done that.” Producer panels,

Jane Fyksen/Agri-View

Western-Wisconsin dairy farmer Marty Hallock, looking over his farmstead, says he’s a proponent of advanced education.

Attitude is a little thing that makes a big difference.” – Winston Churchill

hands-on workshops and dairy tours consistently rank as favorite ways to learn in educational settings. Since the inception of PDPW in the early 1990s, thousands of dairy men, women, leaders, teachers and students have experienced that knowledge really is power. Educational trainings on a multitude of topics have equipped dairy producers with herds of all sizes to improve their systems, ways of thinking and methods of communication to accomplish great levels of success. It’s also reassuring to know dairy isn’t the only industry with challenges that sometimes seem insurmountable. Businesses in every industry must manage consumer perceptions, employees and finances, adapt to new technologies, leverage facilities and resources, See ATTITUDE, page 2

Professional Dairy Producers™ I 1-800-947-7379 I www.pdpw.org


January 2018 • PDPW • Dairy’s Bottom Line

CP Feeds

In terms of solid feed intake and average daily gain, calves benefit from having a buddy. Individually housed calves take longer to learn and have lower solid-feed intakes at weaning.

Calves can grow better in pairs


aising milk-fed calves individually in hutches or pens has been the gold standard for decades. Individual calf housing allows p ro d u ce rs to o b s e r ve a n d manage calves while also re d u c i n g Amanda potential disSmith ease transmission between animals. But as producers offer more elevated planes of

nutrition to calves, the benefits of raising calves in pairs or small groups is increasingly feasible. The advantages of feeding m o re m i l k to ca lve s a re becoming widely recognized. Calves grow better, are healthier and even have higher milk production in their first and subsequent lactations. The most common challenge is that it reduces starter intake and makes weaning more difficult. Calves fed 2 quarts of milk

twice a day are generally hungry throughout the day and will consume more starter before weaning. Unfortunately young calves aren’t able to consume or digest enough starter to compensate for the low milk intake, resulting in lower weight gains and poorer performance. Calves allowed to consume more milk often have better weight gains prior to weaning. When calves are fed more milk, they should be weaned during a longer duration to


actually face the same challenges we do,” Haag said. “It’s helpful to learn about things they’ve done to overcome those obstacles.” Bernie Wolf of Sunset Farms near Allenton, Wisconsin, agrees that the learning offers unexpected insights. “Being able to hear from businesses outside of agriculture is really eye-opening,” he said. “It’s great to hear how other managers handle challenges.” Choosing the right attitude and embracing the mindset of ongoing learning positions one

to be more sure-footed in business and family. It makes for a stronger, more confident and more successful life. “A positive attitude solves problems,” Hallock said. “Choose to be happy.”

Continued from Page 1

and keep up with business codes and regulations. One of the most impactful ways to learn while embracing a fresh perspective is by following direction from business owners outside the dairy sector. Kody Haag of Virhada Holsteins near Mt. Horeb, Wisconsin, enjoys a glimpse inside non-dairy industries. “It’s interesting to see how businesses that seem to have nothing in common with dairy

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January 2018 • PDPW • Dairy’s Bottom Line encourage solid-feed intake. A 10- to 14-day weaning period results in better success than a seven-day weaning period. On most dairies calves are housed individually for the first few months of life and then moved to a group at about the time of weaning. A study conducted by the University of British Columbia evaluated if social-rearing advantages depended on age of calves when they were grouped. In the study, 36 calves were housed in one of three ways. • Individually • In pairs from birth • In pairs at six weeks of age Fo r e a c h t r e a t m e n t , researchers measured intake a n d g ro w t h f ro m b i r t h through 10 weeks. Calves paired at birth ate more than both the individually reared and late-paired calves. In addition, by two weeks after weaning solid-feed intake for the paired-at-birth group was

1.8 pounds per day greater than calves raised individually or paired at six weeks. Pairedat-birth calves also had a much higher average daily gain at 2 pounds per day, compared to 1.6 pounds per day for the other calves. A second study found no difference in intake or weight gains when calves were paired at birth or three weeks of age, but both groups surpassed individually housed calves. When milk-fed calves are paired early in life there is often an increase in solid-feed intake before weaning. Cattle are inherently social. Pair housing allows calves to naturally develop and display social behaviors. Research has shown those calves have better cognitive development than their individually housed counterparts. They also have more finely tuned social skills and they’re quicker to discover – and eat – solid feed. In addition, these calves vocalize

less during the weaning process and perform better when moved to a larger group post-weaning. A University of Guelph study found the impact that pair housing has on calves starts before weaning and continues to have an influence after weaning. In that study, calves were fed free-choice milk and were housed individually or in pairs. Pair-housed calves consumed more milk and ate more grain – often in smaller more frequent quantities. When all calves were put into pairs after weaning, the pair-housed calves exhibited more social behavior. They spent more time eating with a companion. There are some challenges associated with raising calves in groups, such as cross-sucking and health concerns, but those can be mitigated with good management strategies. Calves are naturally inclined to suck; when calves are raised in groups there is an increased

potential for cross-sucking. One way to lessen a calf ’s motivation to suck is to increase the amount of milk fed, particularly via a teat. In s i t u a t i o n s wh e re c a lve s receive a lower level of milk nutrition, pair housing may not be the right fit. Cross-sucking at weaning can also be reduced by gradually weaning calves while also providing access to high-quality palatable feeds. Pairing calves at birth can enhance social skills and improve a calf’s ability to adapt to new situations. In addition, the increase seen in preweaning feed intake and weight gain continues into the postweaning period. Good management is critical. Where circumstances allow, dairy producers should consider the advantages of pair housing for calves. Amanda Smith is a dairy consultant with CP Feeds LLC, a corporate sponsor of PDPW.

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January 2018 • PDPW • Dairy’s Bottom Line

Retain employees despite shrinking workforce


ood help is difficult to find; finding any help in Wisconsin currently may be a challenge. Wisconsin unemployment rates have hovered around the 3 percent mark for months, reaching some of the lowest levels in the historical record. That statistic comes as no surprise to folks in the dairy industry – both on the milk-proRebekah duction and milk-processing Sweeney sides. Employers report more frequent turnover and fewer applicants as their greatest business concerns. And the situation’s only going to worsen. As Baby Boomers retire, there simply aren’t enough people in Wisconsin to replace them. That’s compounded by a trend of young people leaving the state after their educational experiences, for job opportunities elsewhere. Plus new competitors are appearing in the labor market. Wisconsin lawmakers approved a $3 billion package of tax breaks and incentives to Taiwan-based electronics manufacturer Foxconn. The company is expected to have Wisconsin plants up and running later this year, hiring up to 13,000 people. There is more business expansion planned in Wisconsin. Generac’s expansion in Waukesha is likely to hire 400 people. Dynamic Recycling in Onalaska will hire 150 people as it completes its $20 million expansion. Candy maker Haribo will create at least 400 jobs with a Pleasant Prairie project scheduled for completion in 2020. Within the dairy industry, Great Lakes Cheese plans to hire 125 people as it completes a new facility in Wausau. Masters Gallery Foods expects to create 120 new jobs during the next two years as it builds its Oostburg


Low-cost training opportunities can increase employee efficiency and boost retention rates. From left are Maritza Valdivia and Jeff Rosebrook of Chula Vista Cheese, Joshua Henning of Henning’s Cheese and Joshua Peer of Meister Cheese.

facility. Millions of dollars are being invested in new or expanded manufacturing, processing, warehousing and distribution sites for cheese in the Wisconsin cities of Platteville, Knowlton, Darlington, Weyauwega, Kiel, Freedom, Monroe and Denmark. Jobs are associated with all those projects. B e c a u s e W i s c o n s i n ’s already-minimal workforce is shrinking at the same time thousands of new job opportunities are becoming available, employers need to develop a game plan to recruit and retain workers. At minimum, that means evaluating wages, benefits, work environment, and development and advancement opportunities. To more fully understand the scope of competition, learn what the local grocery store, gas station and daycare center are paying employees. Those businesses are vying for some of the same

people the dairy industry needs. A search of wage analysis at worknet.wisconsin.gov reveals that a food-production worker makes a median hourly wage of $15.78 in Outagamie County, $19.37 in Sheboygan County and $20.59 in Barron County. Re m e m b e r to co n s i d e r bonuses. Recent job listings featured a nursing home in Sister Bay, Wisconsin, offering a $2,000 sign-on incentive for housekeeping employees. Kwik Trip, which hired 1,000 new employees when it acquired PDQ in 2017, offers profit-sharing bonuses up to 9 percent of a worker’s gross annual wages. Sears is promoting a $250 up-front bonus for new parttime employees. And then there are the benefits. The concept of free or lowcost on-site medical clinics is increasingly popular, with Kohl’s, Lands’ End, Colony Brands, MillerCoors and several

of the dairy industry’s larger cheese-manufacturing and -processing companies hopping on the bandwagon. Smaller employers may extend dental coverage or gym memberships to workers to enhance a more traditional health-care package. It’s also increasingly common to offer paid-leave packages and educational reimbursements to prospects. Make education a key consideration; thorough orientation is critical to retaining an employee beyond the first few weeks but successful companies will continue to offer training. To meet ongoing educational needs, seek professional-development organizations and trade associations that have developed trainings to suit the specific needs of the dairy industry – from high-level managerial courses to soft-skills workshops and technical classes on task-specific operations. Employee education has

January 2018 • PDPW • Dairy’s Bottom Line

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obvious benefits related to employee efficiency and productivity, and it can boost retention rates. Contrary to a perception that workers will take advantage of training opportunities and then move on to greener pastures, studies show employees are far more likely to stay with employers that develop their talent and help them view their jobs as careers. Creating a career mentality for employees means also creating a professional work environment. While there are limits to what employers can do about the heat or cold, odors and physical effort involved in many jobs in the dairy industry, social concerns can still be addressed. Setting and maintaining standards for fair treatment and respect in the workplace is a must. Managers can also create a healthier work environment through regularly scheduled re v i e ws a n d i m m e d i a te

fe e d b a c k w h e n n e e d e d . Acknowledging employment anniversaries and birthdays serves to develop employees’ sense of belonging. Participating in an occasional community-service project or a new workplace goal creates sense of pride in the team. Wisconsin’s dairy industry must adjust to compete in the labor market, given the state’s workforce shortage. While few employers will be able to offer everything workers want, smart employers will find ways to stand out to prospective employees. Developing a strategy to find good employees and retain them is vital to sustaining and growing a company – now and in the years to come. Rebekah Sweeney is a communications and policy manager with Wisconsin Cheese Makers Association, a corporate sponsor of PDPW.

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January 2018 • PDPW • Dairy’s Bottom Line

Take steps to evaluate feed additives


ontrolling feed cost is one of the biggest challenges dairy producers face. A review of all feed ingredients in the diet is an important process that should be completed on a re g u l a r ba s i s regardless of the milk price. To effectively evaluate which products provide the best value, it’s helpful to Floyd consider five key Sutton subjects. 1) How the product works Consider how a specific product or ingredient is different from other options that Zinpro Corporation could be included in the ration. Consider if it replaces some- Because one of the biggest expenses on any dairy is feed, formulating thing else in the ration and the correct ration is critical to productivity. what nutrients it supplies. Check if the nutrients are in a unique form and if they are absorbed or digested differently from other ingredients. Learn the specific biological processes that occur in the cow as a result of adding the ingredient to the ration. Consider if it will make her more efficient or change her metabolism. A product does not need to be a magic bullet, but it does need to be effective. Remember the adage, “What is magic is not nutrition and what is nutrition is not magic.” 2) Recommended feeding dose and response

Sometimes a product can provide a response in a short time frame while other times it takes a long time. For example, a response to recombinant bovine somatotropin – rBST – is seen in a few days but a response to feeding a trace mineral product might take several months. It’s important to understand what the expectation should be and how the response should be measured.

Beware of “tag dressing,” which can add costs without any added benefits. In addition, it’s critical to know in what situations the best response will be observed. Each stage of a cow’s life has different demands; some feed additives work best in specific p r o d u c t i o n s t a g e s . Fo r instance, a product that works

3) Product claims Most on-farm field observations do not have a control group, so response may be attributed to factors outside of the specific product being evaluated. The best way to evaluate a product is to conduct controlled research that has been peer-reviewed and published in a scientific journal. Controlled research trials provide a reliable way of evaluating the results from feeding a product because those studies are designed to minimize variation. It’s also critical to know if the research responses observed are statistically significant and repeatable, or if they’re simply a numerical difference that occurred by chance. 4) Copycat versus research-proven Generic products are used in human medicine, but those products are regulated closely by regulatory agencies. No such agency control exists for generic feed additives. The most expensive ingredient that can be fed is one that doesn’t work. 5) Economic analysis Often the more expensive diet is the right decision to make if it provides a greater economic return. Look beyond the cost of the product and consider any potential increases in dry-matter intake or increases in management costs from using the product. There are no free lunches; more milk requires more nutrients. Controlling feed costs is vital in a competitive marketplace. Reviewing and evaluating the ingredients used in a feeding program is an important process to ensure a ration provides the best return on investment.

great for transition cows may have little impact on late-lactation cows. A feeding system that requires all cows to be fed the same diet may not yield the best response. If the additive is intended to fix a problem or enhance performance and the issue no longer exists, consider if that product should still be Floyd Sutton is a key account manager with Zinpro Corporation. fed.

January 2018 • PDPW • Dairy’s Bottom Line


Save the date for PDPW Business Conference 2018 The 2018 PDPW Business Conference is shaping up to poise dairy producers for a culture of thriving. It’s scheduled for March 14 and 15 at the Alliant Energy Center in Madison, Wisconsin. Dairy producers along with industry leaders and experts from around the globe will gather to uncover innovative solutions, new ideas and cutting-edge technologies by participating in the trade show and networking with one another. This year’s conference features more than 40 leading experts in the fields of dairy n u t r i t i o n , h e rd h e a l t h , finance, personnel management, technology and more. They will present sessions in hands-on, classroom and interactive formats. Four keynote speakers will


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2018 PDPW Business Conference

motivate, inspire and challenge participants to reach farther outside the box. • Mike Boehlje, professor emeritus at Purdue University’s Agricultural Economics • Mark Tauscher, former Green Bay Packer • Dan Basse, ag economist and commodities expert • Liz Murray, “Breaking Night” author The speakers will empower attendees and their dairy tea m s w i t h ta ke - h o m e actions, messages and challenges to boost business performance. The Hall of Ideas Trade

Mike Boehlje

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What: Dairying to Thrive When: March 14 and 15 Where: Alliant Energy Center, 1919 Alliant Energy Center Way, Madison, Wisconsin More information: www.pdpw.org or 800-947-7379

Mark Tauscher

Liz Murray

Show will feature more than 200 vendors with world-class solution-oriented resources and tools for dairy operations in today’s economic climate. Attendees will elect two people to the PDPW Board of Directors. Slated for re-election are Jay Heeg of Heeg Bros.

Dairy near Colby, Wisconsin, and Dan Scheider of Scheidairy Farms near Freeport, Illinois. Two other candidates on the ballot are Janet Clark of Vision Aire Farms near Rosendale, Wisconsin, and Joe Meyer of Badger Holsteins near Unity, Wisconsin. Visit www.pdpw.org and click on “PDPW Business Conference” for more information and to register.

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January 2018 • PDPW • Dairy’s Bottom Line

Leaf-to-stem ratio affects feed quality


ilk production per cow in the United States has increased by 50 percent to 60 percent in the past half century. That large jump in production has been aided by the utilization of more highly digestible feeds and high-intake forages such as alfalfa. Despite its reputation for high forage quality, alfalfa can vary from high to low quality for a variety of reasons. In an effort to maintain a consistent level of forage quality there has been a concerted effort to understand what plant components influence variations in forage quality. In the case of alfalfa, the whole top growth is fed to livestock. The nutrient content and digestibility of Don its two components, leaves and stems, figures greatly in Miller its feeding value at harvest. Any reduction in forage quality, separate from harvest-related losses, is for the most part attributed to two factors that are related to plant maturity at harvest. First is a variation in the leaf-to-stem ratio, and second is the increasing lignification of stem tissue during plant maturation. The ratio of leaves to stems in the alfalfa fed to livestock greatly affects its forage quality. The adage “more leaves equals better quality; more stems equals less quality” reflects that. If we take a closer look at the chemical analysis of the plant’s top growth it soon becomes apparent that most of the feeding advantage of alfalfa is found in the leaves and to a lesser extent in the stems. • Leaves have two to three times the protein content of stems. • Leaves contribute the majority of feeding value in an alfalfa-forage sample. • The leaf fraction of alfalfa accounts for up to 70 percent of the Relative Feed Quality of a forage sample. • Neutral Detergent Fiber of leaves is more digestible than that of stems. With increasing plant maturity alfalfa leaves remain relatively unchanged as far as digestibility is concerned, but stems can become 30 percent to 40 percent less digestible. Leaf-to-stem ratio varies The shift in the leaf-to-stem ratio of alfalfa as it matures is well-documented. Immature alfalfa – prebud to bud – has the highest leaf-to-stem ratio of about 60:40

and has the highest quality. The ratio approaches 50:50 at early flowering. It reverses to having fewer leaves than stems or about 40:60 at full maturity. That reversal of leaf-to-stem ratio adversely affects the feeding value of the forage. The ratio of leaf-to-stem content in alfalfa is not constant; leaf percentages can decrease as the crop matures. Because leaf content is critical to forage quality, it’s important for a producer to know how the leaf-to-stem ratio changes with increasing plant maturity. The more alfalfa leaves a producer can capture at harvest the better. One tried-and-true method producers use to optimize leaf content has been to harvest the crop early or at 10 percent bloom. Early harvest sacrifices some yield but can improve forage quality in several ways. Immature alfalfa has a higher concentration of leaves, higher crude protein and a higher level of dry-matter digestibility. Prebud alfalfa often has crude protein values of greater than 22, Acid Detergent Fiber levels of greater than 30 and Neutral Detergent Fiber levels of greater than 40. Mature alfalfa can be significantly lower in quality, with crude protein at values of greater than 17, Acid Detergent Fiber at levels of greater than 36 and Neutral Detergent Fiber at levels of greater than 50. Another factor that can affect alfalfa forage quality is stem lignification. As the plant matures the lignin content of the

stems increases as a means of supporting plant functions and keeping top growth from lodging. But with the increase in lignin in plant tissue comes a decrease in fiber digestibility. That’s reflected in the fact that Acid Detergent Fiber and Neutral Detergent Fiber values increase with plant maturity. The increase in lignin content in the plant tissue makes the forage more difficult to digest in the rumen, which in turn slows passage and thus animal-feed intake – all of which negatively affect milk production. Innovations improve quality Recent breeding efforts to improve alfalfa forage quality have been directed at improving the leaf-to-stem ratio and/or reducing stem lignin to improve fiber digestibility. In regards to the leaf-to-stem ratio, past improvements for leaf content involved an increase in the leaflet number and/or size of leaves – multileaf alfalfa. The most recent improvement in forage quality has been in the area of modifying plant architecture throughout the plant canopy, including the lower stems, to increase the overall leaf percentage by 5 percent to 8 percent. That improvement, coupled with an increase in leaf disease resistance, has improved overall leaf content and the leafto-stem ratio at harvest. The second and equally exciting breeding innovation has been the reduction of lignin

January 2018 • PDPW • Dairy’s Bottom Line


Along with the lignin reduction comes an increase in harvest flexibility. The reduced lignin content allows a producer to harvest on a normal cutting schedule with better forage quality, or have the option to delay harvest while maintaining acceptable forage quality and potentially increase yield. Summary: alfalfa innovations increase production

Alfalfa varieties at the same stage of maturity often have different leaf-to-stem ratios. The variety on the right has been selected for enhanced leaf expression. A leaf-to-stem ratio improvement from 55:45 to 60:40 can mean an extra 100 pounds of leaves per ton of green forage.

Digestibility of alfalfa decreases as the plant matures, mainly due to an increase in stem lignin and a negative shift in the leaf-to-stem ratio. Until now the best remedy to overcome those factors was to shorten the harvest interval to improve forage quality. The recent release of low-lignin alfalfas – conventional and transgenic – coupled with improvements in plant architecture that improve the leaf-to-stem ratio are giving producers more tools to improve alfalfa’s fiber digestibility and increase its overall forage quality. Depending on the amount of alfalfa in the dairy ration those new innovations have the potential of increasing milk production.

content. A new class of alfalfa varieties labeled as low-lignin alfalfa is providing a

Don Miller is a director of product development with Alforex Seeds, a PDPW Corporate Sponsor.

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significant reduction in whole-plant lignin, resulting in improved fiber digestibility.

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January 2018 • PDPW • Dairy’s Bottom Line

Lactic acid indicates stable silage A major goal of corn-silage production is to reduce oxygen and increase acidity rapidly so lactic-acid bacteria grow to stabilize and preserve it. A common belief is that corn silage is fairly well-fermented after three weeks of storage and is acceptable to start feeding at that point. Lactic acid is a significant end product of good corn-silage fermentation. Higher levels indicate corn Kathleen silage is stable. Ralph Ward, founder and presiEmery dent of Cumberland Valley Analytical Services, and Mary Beth de Ondarza, dairy nutrition consultant and owner of Paradox Nutrition LLC, conducted an analysis. They discovered significantly less lactic acid in corn silage in the fall than in the following winter and spring. Ward and de Ondarza analyzed a set of corn-silage-fermentation data that was between 26 percent and 38 percent dry matter. They looked at how fermentation profiles varied according to the month of the year; samples were sent to Cumberland Valley Analytical Services. Titratable acidity, measured as meq/g, accounts for the strength of acids present

in corn silage and is highly correlated with total acid levels in corn silage. The levels were significantly less in the early months after harvest. Ammonia levels and soluble protein will continue to increase until fermentation has stabilized. Both were significantly lower in the fall. The data indicates most corn silage will not be fully fermented until it has fermented for about

four months. Producers can expect the best performance from their cows after that time. Visit www.foragelab.com for more information. Dr. Kathleen Emery, veterinarian, is a nutritionist with Mycogen Seeds, Mission Sponsor of PDPW.

Serving others is leadership Professional Dairy Producers Foundation

Mark Diederichs, former PDPW Board President and current Professional Dairy Producers Foundation board member, understands that leading others is most successful when motivated by serving them.

The parable of the pencil offers great insight into developing leadership traits. It’s a story encouraging a humble instrument. The pencil can achieve great things by following five steps. • Accept guidance from others. • Stay sharp. Sharpening may be painful, but it’s vital to greatness. • Don’t fret over mistakes – that’s what the eraser is for. Besides, learning from mistakes is the most impactful

way to learn. • Be yourself – pencils come in lots of shapes, sizes and colors, and so do people. • Don’t give up, even if the writing surface is rough. Keep going, keep moving and keep pursuing your purpose. There are substitutes for great pencils, but not for great leaders. By definition, a leader is someone who holds a dominant or superior position within his or her field. The person has authority to exercise control or influence over others. A great leader does so with excellent communication and deci-

sion-making skills. It can be said that servant leaders are in a class all their own because of their commitment to serve others as opposed to serving their own purposes. In addition to traditional leadership traits, servant leaders are also in tune with a few other traits, including intentional listening and acknowledging the contributions of other people. They are receptive to the ideas of others, even if they’re not in full agreement. They also empathize with others and are adept at communicating a vision

January 2018 • PDPW • Dairy’s Bottom Line their team members will rally around. We all know people who epitomize servant leadership. Dairy producer Mark Diederichs is one such individual. Recently, Envision Greater Fond du Lac – a group formed by the merging of the Fond du Lac Area Chamber of Commerce and the county’s economic-development corporation – named Diederichs one of two 2016 Volunteers of the Year for giving his time and talents to ensure the success of many community programs. At Lake Breeze Dairy near Malone, Wisconsin, Diederichs manages 35 employees on a 3000cow operation. He’s wellknown in the community for his service to the local food pantry, the fire department, St. Peter’s Lions Club, Farm Bureau, New Holstein FFA Alumni and more.

Though Diederichs said serving in those positions is easier now that their children are grown, he encourages the busiest of people to start serving by doing small things that can have a big impact. “Something as simple as a hand-written note to someone who’s struggling can make a world of difference,” he said. As is the case with many servant leaders, receiving awards and recognition is not their end goal – those are merely a byproduct of the service they’d be involved in anyway. “There’s a sense of satisfaction in serving others, particularly if someone is going through a tough time,” Diederichs said. “When you’re able to lend a helping hand and t h e n yo u se e t h e m p u l l through, there’s nothing quite like knowing you were able to help a little.”

Today’s dairy producers recognize their products and practices are often misunderstood by the general public. Diederichs suggests that reality makes serving the community all the more important. “There are always things you can do to serve others,” he said. “Volunteering to help at an event is one example – even if it’s just an hour or two a month.” A habit of helping non-farm neighbors changes perceptions and clears the way for open dialogue. “It’s not just about inviting consumers into your business or onto your farm,” Diederichs said in regards to enhancing relationships. “We need to be visible in the non-agricultural community, too. Maybe that’s helping at a local food pantry or handing out dairy products at a local grocery store during


June Dairy Month. “Your non-farm neighbors might enjoy a tour of your farm, but the next day they’re back in their own world. On the other hand, when they see you helping in non-farm events in your community, that leaves a good impression. And they start seeing you as a partner and not just a farmer.” Even though it isn’t always immediately apparent, the inclination toward servant leadership is an inherent part of a farmer’s way of life. Perhaps it’s because the choice to serve others is within the control of the giver and because it brings great joy. As a bonus, servant leadership is something money can’t buy and yet pays rich dividends. Contributed by Professional Dairy Producers Foundation, Mission Sponsor of PDPW.


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January 2018 • PDPW • Dairy’s Bottom Line

Successful transitions protect dairy legacy Dairy-farm families, owners and managers considering a business transition to another owner or the upcoming generation know the process can be overwhelming. The PDPW Business Transition Workshop, led by Nicole Bettinger, is designed to equip producers with the tools they need to effectively work together and plan for the farm’s future. The workshop will help producers start the difficult conversations that come with transition planning, as well as to identify and resolve bottlenecks. Bettinger will help producers develop strategies to provide reliable road maps for everyone involved. Attendees will leave with the resources they need to establish their personalized transition plans, and implement policies that provide predictability and protection for owners and fam-

PDPW Business Transition Workshop

ily members. “Transition planning can be one of the most difficult processes for any business, and especially for today’s dairyfarm families,” said Marty Hallock, PDPW Board president and dairy farmer. “The Business Transition Workshop will

provide a combination of real examples and practical tips, and give us dairy farmers the opportunity to learn from our peers in a positive environment.” Visit www.pdpw.org or call 800-947-7379 for more information and to register. The workshop is an accredited

What: Develop transition-plan strategies When: 9 a.m. to 3:30 p.m. Jan. 31 and Feb. 1 Where: Jan. 31 at the Glacier Canyon Lodge Conference Center, Wisconsin Dells, Wisconsin, and Feb. 1 at the Radisson Hotel & Conference Center, Green Bay Leader: Nicole Bettinger, family-business expert and consultant specializing in communication and conflict resolution for next-generation business owners More information: www.pdpw. org or 800-947-7379

training and offers up to 5.5 Dairy AdvanCE continuing-education units. Visit www.dairyadvance.org for more information and to secure credits.

Understand electric bills; reduce costs Focus on Energy

Assessing a farm’s energy usage can lead to efficiency changes that will help a dairy producer’s bottom line without reducing cow productivity or increasing labor costs. Most dairy farms use an average of 800 to 1,200 kilowatt-hours of electricity annually per cow. Review daily, weekly and monthly electric-use patterns with an electric-utility account representative. The information assesses operating procedures that can be adjusted to reduce electricity use. Monthly electric bills typically include demand charges, energy-consumption fees and other miscellaneous fixed charges. Demand charges generally represent 30 percent to 40 percent of the total monthly bill

and are used by utilities to calculate maximum demand. The charge varies depending on time frame, size and intended usage. Demand can be expressed in cubic feet per minute or therms per unit for natural gas usage. Utilities use varying formulas to determine the charge; small farms may not be charged for demand due to their size. For large operations, those charges can typically be reduced substantially. Energy consumption is billed based on time of consumption, on-peak or off-peak usage, and total kilowatt hours used during the billing period. Typically electric utilities base demand charges on a daytime peak demand – typically a 12-hour period on weekdays. Utilities’ generating and distribution systems are most heavily loaded during those on-peak hours.

Additional charges are added for building charges, taxes and fuelcost adjustments. Those charges are generally tied to the overall electricity consumption, not a farm’s demand charge. The higher a farm’s electrical consumption and electric demand, the higher the utility bill. There are four steps that can be used to reduce an electric bill. • Identify the time and causes of on-peak demand to identify ways to shift equipment usage to off-peak times. • Set controls so operations are staggered. • Develop a comprehensive energy and cost-reduction plan. • Benchmark energy use and evaluate trends through time. The benefits of understanding an electric bill are huge. Reducing expenses and utilizing those savings to fund other projects is smart business. Electricity costs

will certainly increase in the years ahead; be proactive and start managing those costs now. For assistance with understanding an electric bill, and for other energy-efficiency-improvement needs, contact a Focus on Energy adviser. Focus on Energy advisers have the tools and skills to help guide a producer through potential energy-savings projects. They also provide an unbiased thirdparty source of information to improve energy efficiency on a farm. Visit focusonenergy.com/ agribusiness or call 888-9477828 for more information. Focus on Energy is a PDPW Mission Sponsor and Wisconsin utilities’ statewide energy-efficiency and renewable-resource program funded by the state’s investor-owned energy utilities and participating municipal and electric cooperative utilities.

January 2018 • PDPW • Dairy’s Bottom Line


Changing consumers create opportunities Wisconsin Milk Marketing Board

Research compiled by the Wisconsin Milk Marketing Board has uncovered key demographic trends the dairy industry will need to consider to be in position for success in a changing world. • It’s impossible to avoid the fact that the demographics of the American consumer are changing rapidly. While the nation’s changing face brings several significant challenges to those who market Wisconsin dairy products such as milk, butter and ice cream, opportunities for the Wisconsin specialty-cheese industry are also being created. Aging population impacts dairy industry Our population is aging at a rapid pace. Just six years ago, according to a study conducted

by Chmura Economics & Analytics, fewer than 10 percent of counties in the United States had demographic mixes in which those 60 or older comprised the biggest age group. By 2026 that age group is expected to be the largest in 75 percent of the nation’s counties. The aging population will

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impact health care and the housing market, but will also impact the dairy industry because older consumers drink less milk than younger consumers. However older consumers also purchase more of many types of specialty cheese. Changing palates affect dairy The increasing diversity of the population has already had a profound impact on purchasing decisions. In 2015 the Hispanic foods market in the United States was a $17 billion category and it’s projected to grow to more than $21 billion dollars by 2020. That changing demographic has had an impact on every category in the store, including in the dairy aisle. Sales of Hispanic cheese grew four times faster from 2015 to

2016 than the overall category. Some populations are more lactose-intolerant than others, but opportunities exist. Though it’s true that fluid milk contains about 12 grams of lactose, most varieties of specialty cheese contain less than 1 gram of lactose. Education will be key to building new customers among an increasingly diverse group of consumers. The U.S. Census Bureau reports 72 percent of U.S. households were childless in 2015, compared to 53 percent in 1950. That trend greatly impacts purchasing of consumer goods, including dairy products. Households without children buy half as many gallons of milk per year as households with children. Though this will present a challenge for the dairy industry, there is also opportunity for dairy in this shift because households without children are more likely to purchase many varieties of specialty cheese. The Wisconsin dairy industry is well positioned to meet changing consumer palates. With 47 percent of the country’s specialty-cheese production, Wisconsin truly has something for everyone. The Wisconsin Milk Marketing Board is a Mission Sponsor of PDPW.


January 2018 • PDPW • Dairy’s Bottom Line

Wisconsin’s water regulations important


iving in a resource-rich state like Wisconsin, it’s easy to take an abundant c l e a n - wa te r s u p p l y f o r granted. Water is crucial to everyday life, as well as to the support and growth of the economy. Water is particularly important to agriculture. In fact, the U.S. Department of Agriculture estimates agriculture accounts for 80 percent of the nation’s water consumption. “Farm water” – a term Shelli defined as Manning water committed for use in the production of food and fiber – is used for irrigation, frost control, and application of pesticides and fertilizers. The most significant water footprint is attributed to livestock and meat production. Because Wisconsin is one of the nation’s leading dairy-producing states, it’s safe to say producers who contribute to the food supply rely heavily on an ample water supply. Through the years it hasn’t been a matter of resource availability causing concern for those in production agriculture. Rather it’s been the ever-growing burden of regulation of those resources. At times the regulations are proh i b i t ive e n o u g h to l i m i t growth. The ever-increasing demands of producing the world’s food supply are being outpaced by regulatory constraints, particularly in regards to the regulation of Wisconsin’s wetlands. Groups like Wisconsin Water Alliance support “common-sense regulations and policies that both help protect t h e s t a t e ’s a b u n d a n t fresh-water supplies and

foster a science-based discussion on water-related issues.” But watchdog groups fund initiatives like “Project: Water Watch Wisconsin” and would have the public believe the outlook for Wisconsin’s water supply is dire – that a shortage of safe clean drinking water poses an immediate threat and no amount of regulation is enough. As Wisconsin wetlands are being regulated by the U.S Army Corps of Engineers and the Wisconsin Department of Natural Resources along with local counties, cities and villages, few outside of agriculture understand the level of scrutiny farms face at every t u r n . L aws c o n t i n u e to become more complicated and cumbersome, and producers are left paying the price financially and by way of a commodity more valuable than money – time. Tom Klas, ANIMART senior o u t s i d e - s a l e s m a n a g e r, explains his thoughts on the efforts of Wisconsin Water Alliance. “In an era when environmental threats and policies are some of the most significant front-line challenges producers face, initiatives like the

Wisconsin Water Alliance allow customers to stay sustainable,” he said. As president of ANIMART, Ellsworth was eager to be a key part of the new organization as a way to support the success of those in production agriculture. “We’re fighting this fight so producers don’t have to,” Ellsworth said. “So they can keep doing what they do best – feed the world.” Even considering conflicting opinions, no one would disagree wetlands are crucial to Wisconsin residents and need to b e p ro te c te d . C o m mon-sense laws safeguarding water quality benefit everyone from sports enthusiasts to farmers to those who own waterfront property. There is a body of law in place, comprised of rules and regulations developed through the years, that guides how the DNR protects public rights. The key is finding the balance. Despite theories delineated by extremists about how farms are ruining the environment and allowed to operate with little-to-no regulation, just a few clicks on the DNR’s website gives one an idea of the actual regulatory burden placed on agribusiness, espe-

cially large farms. In order to operate legally, operations with 1,000 or more animal units need to be granted a Wisconsin Pollutant Discharge Elimination System permit. In order to be granted this permit, producers must address numerous issues such as nutrient management, manure storage, response planning and structure construction – ensuring all factors are adequate to protect the water supply. On top of that, this process must begin at least 12 months prior to the farm reaching 1,000 or more animal units. Illustrative of how closely the operations are scrutinized, the DNR “strongly recommends producers hire water-engineer consultants to help complete the required forms.” In addition to the lengthy and complicated process of being granted a permit, farms must abide by inspection, monitoring and reporting requirements. It’s those daily, weekly, quarterly and other periodic inspections and tests that help the DNR and producers work together to maintain the safety of Wisconsin’s waterways while allowing producers to grow their operations according to the demands of the industry. Undoubtedly, somewhere amidst bureaucratic red tape and erroneous alarmist claims of a contaminated and dwindling water supply, the solutions can be found. Business leaders, lawmakers, landowners and producers must continue to work together to protect Wisconsin’s most crucial n a t u ra l re s o u rc e , w h i l e encouraging fact-based regulation that will support the growth of the agricultural industry rather than hinder it. Shelli Manning is executive assistant at ANIMART LLC, a corporate sponsor of PDPW.

January 2018 • PDPW • Dairy’s Bottom Line


Automated milking Dairy Wellbeing workshops offered requires good team Upcoming PDPW Dairy Wellbeing Workshops are designed to equip dairy producers, feed managers and other industry professionals with the information and resources needed to address key issues on animal welfare. They will take into consideration both the science and social science aspects of food-production animals. Attendees will tour the American Foods Group slaughter and packaging plant, tracing backward from cooler to harvest floor. Participants will learn from beef buyers, market experts and U.S. Department of Agriculture meat inspectors about cull-cow quality, carcass conditions and more. Dr. Nigel Cook, Food Animal

PDPW Dairy Wellbeing Workshop When: 8 a.m. to 3:30 p.m. Feb. 7 and 8 Where: KI Convention Center, Green Bay More information: www. pdpw.org or 800-947-7379

Production Medicine at the University of Wisconsin-Madison School of Veterinary Medicine, will review animal-welfare challenges as well as practices and assessments that may be required in the future. Dr. Franklyn Garry, Colorado State University, will cover the subject of humane euthanasia of dairy animals.


growing number of dairy producers are implem e n t i n g a u to m a te d milking systems to achieve higher levels of productivity and efficiency. The technology a l so re d u ce s labor demands and allows for greater flexibility in the work day of employees and managTim ers. In addition Baumgartner the technology ca n e n h a n ce the milking experience for the cows. Two primary automated milking systems exist – pod system and rotary parlor. The pod system incorporates robotic units into the housing design; each unit has the

ability to milk 60 to 65 cows. The systems are typically used in herds ranging in size from 120 to 700 cows. Because of the number of factors impacted by a shift to an automated milking system, obtaining input from a wellrounded group of consultants is critical. A manufacturer representative, local dealer, veterinarian, nutritional consultant, contractor, business consultant and financial lender should be consulted when considering the parameters involved. Having a dependable advisory team is key because they can establish expectations of productivity, cost and efficiency. Tim Baumgartner is a dairy-lendingteam leader at Compeer Financial, a mission sponsor of PDPW.

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