Dairy Producers Banquet is Thursday, December 11 starting at 9:30am.   Speakers are Dr. Kirby Krogstat, our new OSU extension educator, presenting “Monitoring Nutrition, Old Classics and New Technology” and “Controlling Mastitis at the Feed Bunk”.  I’ve heard him speak 4 times and each time was very well presented.  Dr. Brittney Davidson is a recent Ph. D graduate from the University of Wisconsin presenting; Consequences of Heat Stress in Dry Pregnant Cows, Growing Heifers, and Post Weaning Dairy Calves.  We’ve known about this science for 5 years, now it is time to utilize and capitalize on the opportunities.  There are so many returns to heat abatement that we need to do this well.  Dr. Hardesty may have a bonus… if he gets it done.

Drs. Hardesty and Hertlein attend Automation on Today’s Dairy Farms  in Argos, IN.  The program was put on by the Tristate Nutrition Conference. It included “What We Have Learned About Management of Automated Milking Systems.” “Data Integration from Multiple Management Programs on Dairy Farms and What’s Possible for Technology in the Future.” “What We Have Learned Using Automated Calf Feeding Systems.”  “Lending Philosophy and Current Financial Benchmarks in Working with Dairy Farms.”

We then took a tour of Houin Homestead Dairy which milks 8000 cows on three sites.  The one we toured has 36 Lely A5 robots and automated calf group pens.  With an additional enclosed commodity barn with a feed center featuring a micro and mega mixer.  These centers are becoming more common, cutting shrink to negligible amounts.

Dr. Dan Thomson “Doc Talk” “In a World of Wealth and Poverty, of Obesity and Starvation, The Vet Profession could not be more Crucial to Ag  than ever.”  There is fear by the uninformed of the unknown. Consumers don’t know where their food comes from and lack attachment to Ag.  There are more people in Jail than in Ag.  First world countries have disposable income.  Money = Food Poverty = Starvation. Belly full, many problems.  Starving, only one. Prices of food directly affects the impoverished. 25% are in poverty in the USA. 4% of income is spent in restaurants, 6% in grocery stores.  Obesity has tripled in 20 years.  It is now 34% in Kansas, 21% in Colorado. 1/3 of world prepared food is wasted.  20% of Meat and Dairy. 

Remove technology and food prices increase.  Non Government Organizations (NGO) influence decisions that effect all.  They mascaraed as consumers.  It is easier to get retailers to make a decision than legislation.  Safe food comes from healthy animals.  Healthy animals come from treating animals with welfare.  Disease prevention is the ultimate welfare.  When trust declines the speed of business slows down and costs go up.  We need strong leadership to not undo the good we have done.

Genomics, Let’s Review We are planning genomics update as a peer group meeting this winter.  Reviewing what we have known for a while, we commonly have not taken full advantage of this technology.  I know two reasons, cost and the time it takes to manage.  What are the paybacks of having 20 % better decision of who to breed to what?  Dave Erf says, “If you are going to use genomics, you must have your house in order.  If well managed, genetic influence grows.  Genetically we are making invisible cows.  Invisible cows are the most profitable.  They have 4 events per lactation.  They calve, breed, check pregnant, and dry off, repeat.  There are people that follow the broken cow theory that favors high cull rates to milk healthy cows.  Erf promotes Longevity Driven Profit.  Lactation 4 and 5 have the highest production. Lactation 6 > 3, 7>2. After 7 years using genomic selection, turnover rate can be 27%.  Less replacements, higher production.  An LDA costs $494 with 26.9% culling risk.  Mastitis costs $155 to 224  per case with a 32.7% culling risk.  Mastitis, Lameness, Metritis, Retained Placenta, LDA, Ketosis are all selection traits.  These traits are all centered at 100 with a standard deviation of 5.  The higher the number the lower the risk of disease relative to herd mates.

Most wellness traits are part a trait index. These indexes have evolved over the 30 years that genomics have been available.  Interestingly, the amount of difference made by genomic selection is decreasing as the health traits get better.  Sure the benefits come through the bull side and eventually, the population will improve.  Selectin on the cow side will move that progress faster.

Leveraging Automation Matt McFadden/ Farm Credit. I will present the information we were given.  Not to promote them, but to have awareness of the guiderails around financial matters.  Rules change on different farms. 

Labor is the biggest challenge associated with domestic dairy production today.  In 9 years, labor costs have increased by 30 cents per hundred from $1.60 to $1.90.  This is outpacing production increases.  Knowing your trend is your friend.  Consideration of semi vs. complete automation.  A common goal is to reduce one milker per milking shift.  There are options that are for sale, some of which are good options, some are not.  Robotic teat dipping arms are an example of poor performance.

Capital investment in a complete Lely system is $17,800 per cow.  Feeding is $2000, manure system is $1500, AMS $5000, Freestalls and barn $7800 (room to trim here), Feed pad $1500.  That ties up a lot of capital.  We can expect to save 40% of the labor of an efficient conventional dairy with the AMS alone.  We should also get 8 to 10 pounds of milk moving from 2X to 2.8 visits per day.  On the negative side, besides payments, there is also a service agreement to consider.

Initial purchase of automation comes from retained earnings, equity, and debt. As you work through decision making, pay attention to financial parameters.  Current ratio should be $2 in the checkbook for every dollar owed.  I can tell you that we have always violated this rule working with the cash flow method.  (cash flows in, cash flows out).  Working capital per cow should be $500.  Solvency on a cash basis (net worth/total assets) should be 40%. Debt coverage ratio (net income generated/ debt payment) should be 130%.  Collateral of 75% as loan/appraised value.  Be careful valuing cattle at current prices.
 

Debt payment per cwt is $2.50. Debt per cow $5500, solvency overall at 50%, labor/CWT $2.50, Class III breakeven $16.50.  Ohio and Indiana are considered the most profitable place to milk cows.  Putting together the whole capital budget for a project must include a plan for feed, cattle, employees and advisors.

Stressed? Who Me? Stress is a state of mental or emotional strain or tension resulting from adverse or very demanding circumstances.  Mental Health includes emotional, psychological, and social well-being. It affects our thoughts, feelings, and actions.  Determines how we handle stress, relate to others, and make choices.  Half of all mental health disorders begin by age 14 and 75% by age 24.  One in 5 American adults experience a diagnosed mental health disorder each year.  Anxiety 19%, Substance Use 8%, Major Depression 6.8%, Bipolar 2.8%, Eating Disorder 2.1%, Schizophrenia 0.45%.

Give Yourself Grace and have Grace for Others

Merry Christmas!