KENTUCKY
May - June 2016 w w w. k y d a i r y. o r g
Milk Matters
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Kentucky Producers Receive National Recognition Find out more on page 6 Moving More Milk in Kentucky Schools Find out more on page 12
MPP Not Paying Find out more on page 21
Governor Bevin Proclaims June as Dairy Month in Kentucky
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t is always good to have a Milk Toast to celebrate Kentucky’s dairy farm families and the rich, nutritious qualities of nature’s most perfect product, milk. But when you do that with the Kentucky Governor it makes it especially special. On June 3, 2016 dairy producers and leaders gathered in Governor Matt Bevin’s office to not only celebrate and recognize Kentucky’s nearly 650 dairy farm families, but also to have the Governor proclaim June as Dairy Month in Kentucky. With whole-milk filled, raised glasses everyone in attendance toasted KY dairy producers for their dedication, hard work and impact they have on Kentucky’s economy. The Proclamation reads: To All To Whom these Presents Shall Come: Whereas, Milk is the official beverage of Kentucky; and Whereas, Kentucky has more than 63,000 milk cows, producing more than 125 million gallons of milk on KY farms; and
Whereas, Kentucky has six commercial milk processing plants, three commercial cheese manufacturing plants, a specialty ice cream plant, an on-farm milk bottling plant, and eight on-farm cheese makers across the Commonwealth; and Whereas, Milk and dairy foods are packed with nine essential vitamins and mineral, including, calcium, potassium, riboflavin, phosphorus, vitamin A, vitamin D, vitamin B-12, and protein; and Whereas, Since 1939, June has been designated as Dairy Month to honor the contribution of dairy farmers and their families who work hard every day to provide fresh, wholesome milk and milk products for all to enjoy; and Whereas, Kentucky Dairy Development Council, Kentucky Department of Agriculture, Southeast United Dairy Industry Association, Southland Dairy Farmers, and the nearly 650 Kentucky dairy producers encourage the citizens of KY to join with them in enjoying dairy products not only in June, but year-round.
Whereas, Kentucky dairy Governor Matt Bevin stands with dairy leaders from around the state producers and products make a to proclaim June as Dairy Month in Kentucky. vital contribution to the economy Now, Therefore, I Matthew G. of KY with cash receipts from the Bevin, Governor of the Commonwealth of Kentucky, do hereby proclaim sale of milk in 2015 totaling nearly $200 million; and June 2016 as DAIRY MONTH.
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
2015 KDDC Board of Directors & Staff
President’s Corner Richard Sparrow
Executive Committee President: Richard Sparrow Vice President: Charles Townsend, DVM Sec./Treasurer: Tom Hastings EC Member: Tony Cowherd EC Past President: Bob Klingenfus
Board of Directors District 1: Freeman Brundige 731.446.6248 District 2: Josh Duvall 270.535.6533 District 3: Don Kinslow 270.646.0086 District 4: William Crist Sr. 270.590.3185 District 5: Tony Cowherd 270.469.0398 District 6: Mark Williams 270.427.0796 District 7: Greg Goode District 8: Jerry Gentry 606-875-2526 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: Eric Risser 423.368.7753 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: Fabian Bernal 859.351.0610 Veterinary: Dr. Charles Townsend 270.726.4041 Finance: Michael Smith 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
May - June 2016 • KDDC • Page 2
A
s I write this article, we are in the middle of June Dairy Month. Earlier this month, I attended the June Dairy Month proclamation signing by Governor Matt Bevin. I was surprised, but also encouraged by the degree of interest in dairy which he showed. Very much a dairy product lover, the Governor grew up on a dairy goat farm in New Hampshire. He seemed very open to any ideas we had to help the dairy industry in Kentucky. Last week, I was delivering a fresh Holstein recipient cow that we sold to a dairyman in Adair County. Listening to a local radio station along the way, I heard Billy Rowe explaining the many virtues of dairy products. I know that many of you have taken part in June Dairy Month activities in your local community. With the present reduced dairy income and short term negative
dairy outlook, it is sometimes difficult to remain upbeat. However, we have to tell our story to consumers every chance we have. In a topic unrelated to June Dairy Month, like many of you, I have been baling a lot of grass hay this month. As I ejected a bale from my round baler, I remember when my son Joe attended Virginia Tech that his buddies kidded him for referring to a round baler as a roll baler. If those Virginia and Maryland boys had any experience in baling hay in the hills of Kentucky, then they would call it a roll baler, too.
Your Input Is Needed
Most are aware of what The Kentucky Dairy Development Council mission statement is “To educate, promote and represent dairy producers and foster an environment for growth of the Kentucky Dairy Industry.” What better way to do this than listening to the producers! We are dedicated to helping dairy producers in any way that is possible and continually strive to better our services to you. That’s why we are seeking input for your newsletter. What would YOU like to see covered in each issue. Your input and opinions are a valuable resource to us and we would enjoy hearing from you. Please take a minute to share with us what you would like to see included in the newsletter. Responses can be sent to KDDC at 859-516-2458 or email @ kddc@kydairy.org
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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Executive Director Comments Maury Cox
June – A Big Month for Dairy in Kentucky
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une is the official month each year set aside to celebrate and promote Dairy. This tradition began in 1937 as National Milk Month. In its beginning it was given the theme of “Keep Youthful – Drink Milk.” Chain stores were the primary sponsors with initial funding coming from a one cent per pound butterfat assessment in June on dairy farmers. It was established to help stabilize dairy demand during periods of peak production with cows on lush grass and schools having dismissed for the summer. Over 6,300 stores participated in sponsorships. In 1939 the official title of “June Dairy Month” was established and the National Dairy Council offered producers, processors and dairy product
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distributors’ campaign material to promote the month long event. In those days many local KY communities celebrated with parades, selecting Dairy Princesses and Princes and enjoying picnics with fun activities throughout the day. Awards were presented to recognize Dairy Farmer of the Year and articles in the local newspapers featured stories on dairy farming and several dairy farm families. Dairy farming was a major economic driver in many KY counties.
The dairy industry still has a big impact on Kentucky’s Ag economy with nearly $200 million in farm gate receipts to farmers.
Several communities have carried these events on throughout the years while others have revived the celebration to recognize their dairy heritage and express appreciation for their local hard working dairy farm families. Several dairy partners participate in these events including Southeast United Dairy Industry Association, American Dairy Association of KY, and the KY Department of Agriculture, various dairy marketers and processors along with the Southland Dairy Producers and the KY Dairy Development Council. These groups provide ice cream, assorted cheeses, and milk and promotional material to help educate consumers on the nutritional value of milk. The KDDC provides KY Kate, a life-size milkable cow for the kids to learn how to hand milk the old-fashioned way. Milk drinking and Banana Split eating contest are held at some events while others offer “cow and husband calling” and live cow “hand-milking” competition and even an auctioning of a 40 pound block of Blue Grass Dairy’s award winning cheddar cheese to raise money for a local dairy club. It’s a great deal of fun as the crowd gets involved cheering for their favorite teams or contestant in the various competitions. Some communities recognize the “Dairy Farm Family of the Year” to show their appreciation for dairies’ contribution to the communities’ economic health. The dairy industry still has a big impact on Kentucky’s Ag economy with nearly $200 million in farm gate receipts to farmers. There are approximately 650 Grade A permitted dairy farms in KY with over 63,000 milking cows. Combined those cows produce over 125 million gallons of milk a year. The top five counties in KY for milk production are Barren (111 million lbs.), Logan (109 million lbs.), Adair (75 million lbs.), Christian (74 million lbs.), and Warren (73 million lbs.). June is a big deal to those involved in dairy in KY. If you drink milk or eat dairy products give a shout out to a dairy farmer.
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
KY Producers Receive National Recognition By Maury Cox
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states, and first in the continental U.S. as having the largest gain in milk production per cow per year of 1,702 lbs. The gain in production per cow since the start of the KDDC has been 4,711 pounds or 36.6 percent. Hoard’s Dairyman compared the last five years’ production increase for all states and KY ranked third in the nation. The increase is equivalent to $836 more dollars per cow a year estimated for the mailbox price of $17.75/cwt, in 2015 as compared to 2005. Source: USDA/NASS Annual Milk Production, Disposition, and Income (PDI) and Milk Production, various years. The second part of this equation has to do with milk quality and SCC. Reported in Progressive Dairyman, April 19, 2016 edition, page 21 the results of Test-day yield and SCC from Dairy Herd Improvement herds U.S. (2010-2015), KY stands first at 221K c/ ml SCC when compared to all 11 southeast states and 2nd behind Florida for average daily milk yield (lbs./cow) at 74.4 lbs.
The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.” These words were spoken by the great Green Bay Packers football coach, Vince Lombardi, winner of three NFL Championships and two straight Super Bowls. I’ve always admired Coach Lombardi and enjoyed stories about him. He loved football, as I do, but more importantly he possessed a work ethic and dedication to excellence that motivated his players to be successful and made him admired by many. What’s his quote have to do with dairy farming? Well, I think it applies to all aspects of life, whether it is sports, dairy farming or working for an organization that works every day to serve dairy farmers. It has to do with attitude and a desire to set goals and work to reach those goals. When the KDDC began, the founding visionary directors established as a primary purpose of the organization, programs which would help KY dairy farmers be more profitable and competitive. The MILK Program was such a program that challenged producers to increase milk production and Milk Quality, It starts on the farm. quality. Kentucky’s production was hovering around These numbers seemed unattainable when the MILK Program 12,800 pounds per cow per year and milk quality measured in was implemented. There also was a great deal of push back when somatic cell counts, averaged nearly 400K c/ml. Both measures the initial SCC level was set at 400K c/ml with the response, weren’t helping KY’s dairy farmers to compete, especially with “There is no way SCC can be that low in the Southeast.” However, milk from outside the state. The results were creating a situation with much work and an attitude of “yes we can” by many KY dairy where milk was being shipped into KY, often removing any producers and the help of others, much progress has been made competitive advantage of locally produced milk to KY processors. and success has been achieved. Since the MILK Program was implemented with KY Ag We can control what we have the ability to do so. Economic Development Funds and matching dollars from the milk milk production per cow, feeding for butterfat, producing quality marketing organizations, milk per cow and SCC has steadily milk, keeping cows comfortable and making the very best forage improved. The real results of this program were recently displayed possible are all things that producers can control to be more in two nationally recognized dairy magazines; Hoard’s Dairyman competitive. The KDDC will continue to be a resource and and Progressive Dairyman. offer educational opportunities to assist KY dairy farmers to be The U.S. dairy 2015 statistics from the March 25th issue of competitive and successful. the Hoard’s Dairyman has KY ranked second overall among all
May - June 2016 • KDDC • Page 6
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Animal Rights Activists - Undercover Videos of Mistreatment of Animals - Misinformed Consumers
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oday all these issues are coming at dairy farmers and all livestock producers in general. The threat is real! What can we do about it? How do we protect ourselves from misinformed folks and those that simply don’t want animal agriculture to exist? The KDDC is concerned for KY’s dairy farm families and to address the issue the KDDC Board recommended holding regional meetings to assist producers in building protections into their operations. After some investigation, we decided to coordinate with KY’s milk marketers and provide a combined program featuring the Merck Dairy Care 365 Program along with input on the Farmers Assuring Responsible Management FARM 3.0 Program. The FARM Program has been updated and Fabian Bernal, Dairy Farmers of America, and KDDC Board member and contributing technical writer on the program will provide information on the 3.0 version. The Merck Program comes highly recommended by Georgia Milk Producers and is accepted by all milk marketers. It will be presented by Rick Jackson, U.S. Dairy Products Manager from Merck Animal Health. We know you know how to care for your animals. This is not a program structured to tell you how to do that. It is our purpose to offer assistance in better securing your right to do what KY dairy farmers do best: Producing quality milk responsibly. We have four regional meetings planned in July. They are listed below: All meetings will begin at 10:00 A.M. local time. They will end by 2:00 p.m. Your attendance will help in providing feedback to the industry. July 12 - Christian Co. Extension Office Central Time (Hopkinsville) Christian County Office - Directions: http://christian.ca.uky. edu/content/directions 2850 Pembroke Road Hopkinsville, KY 42240
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May - June 2016 • KDDC • Page 7
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
June Dairy Month
Beth Cox and Denise Jones at the Barren County Ag Day. Ryan Quarles, KY Commissioner of AG, and his helpers. Dairy Night at the Lexington Legends.
Tim Hughes, Marketing Director, KDA Mercer Co. Dairy breakfast.
Kelsey Smith, Jeremy Kinslow, and Tony Compton, Dairy Night at the Hot Rods.
May - June 2016 • KDDC • Page 8
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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Dixie Dairy Report By Calvin Covington
June 2016
Demand for manufactured dairy products remains strong, fluid milk sales improving. or the first quarter of 2016 compared to the first quarter of 2015, commercial disappearance of butter is up a strong 8.8%. Reports indicate most of the increase in butter disappearance is from food service. Companies such as McDonald’s and others, now using only butter, is a large reason for higher sales. Cheese disappearance continues to grow with American cheese up 1.8%, and other cheese up 11.2% during the first quarter of this year compared to last year. On the export side, nonfat/skim powder export volume is similar to last year, but cheese exports are down 18%. Due to a domestic butter price about $0.90/lb. higher than the international price, butter exports are minimal, and imports are increasing. During the first quarter of this year, U.S. butter imports were about three times higher than exports. On the fluid side, total sales for the first quarter are down 0.6% with conventional sales down 0.8% and organic up 4.2%. Granted, fluid sales are still in negative territory, but
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May - June 2016 • KDDC • Page 10
the decline is not as great as previous years. Whole milk sales continue to grow with sales a hefty 4.6% higher during the first quarter of 2016 compared to 2015. More butterfat consumed in fluid milk supports higher butter prices. Milk production up. Milk production continues to increase each month (see below) and cow numbers continue to creep up as well. April production was 1.2% higher than last April. The nation’s dairy herd added 15,000 cows. As we report each month, almost all of the production increase is in the Upper Midwest and Northeast. During April, milk production in Michigan was up 6.6%, New York up 5.3%, and Wisconsin up 4.6%. On the other hand California continues to produce less milk with April production down 3.3%. Outside the U.S., March milk production in the European Union was up 5.8%. With the New Zealand milk production season coming to a close, production is down about 2.0%. But, the decline is not as great as expected. Southeast demand and supply. The first quarter of the year saw average daily fluid milk sales in the southeast only slightly lower than last, 29.74 million lbs. compared to 27.91 million lbs. in 2015. First quarter sales in the Florida order are up 2.3%. However, about one-half of the increased sales are from plants located outside of the marketing area. Looking at southeast milk supply, USDA reports Florida production was down again, as well as milk production in Virginia. April production was down 3.0% in Florida and
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Milk Prices FMMO 5
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3.2% in Virginia. On the other hand, Dairy Market News reports more milk shipped out of Florida. For the week of May 30-June 3, 200 loads were shipped out of Florida compared to 120 loads a year ago. Southeast blend prices. Little upward movement is projected in southeast federal order blend prices until the last quarter of the year, as shown below. Good demand, especially for butter and cheese, is keeping farm prices from further decline. There are two positive signs on the price side - nonfat dry milk powder and dry whey. We consider both as “bellwether” price indicators. The May, AMS powder price, was $0.03/lb. higher than April, and the dry whey price exceeded $0.25/lb. for the first time since last August. However, low prices remain a “milk supply” challenge, both here in the U.S. and on the other side of the Atlantic, versus a “milk demand” challenge. USDA forecast higher farm prices in 2017. The most recent USDA forecast projects a 2016 all-milk price around $14.85/cwt. compared to $17.08/cwt. in 2015. In their first 2017 forecast, the all-milk price is projected to increase to $15.75/cwt. USDA projects milk production in 2016 of 211.4 billion lbs. which is a 1.8% increase from 2015. They project 2017 production 1.3% higher
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than 2016. USDA projection of a higher farm price in 2017 is based on stronger domestic demand and June 2016 increased exports. Class I Advanced Price Mailbox prices. Februar y (@ 3.5% BF) 2016 mailbox prices for the $16.94 three southeast reporting areas are: Florida - $16.49/cwt.; Southeast States - $15.75/cwt. and Appalachian States - $16.08/cwt. Florida showed the largest decline from January, down $1.46/cwt. and compared to last February, down $3.06/cwt. February mailbox prices ranged from a high of $17.06/cwt. in the New England States to a low of $13.96/ cwt. in Mexico. Margin payment for March-April. The April margin, under USDA’s margin protection program is $6.83/cwt., the lowest margin since August 2013. The average margin for the MarchApril two month period is $7.15/cwt. The 1,691 producers who signed up for protection at the $7.50 and $8.00/cwt. levels can expect a payment.
May - June 2016 • KDDC • Page 11
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Moving More Milk in Kentucky Schools
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ach year, more than 670,000 Kentucky students have better access to milk and dairy foods thanks to American Dairy Association of Kentucky’s (ADA of KY) Dairy Everywhere programs. These innovative school breakfast programs that make nutritious milk and dairy products more available to children across the Commonwealth through a variety of initiatives including Grab ‘N Go breakfast stations, grants for kitchen equipment and state-wide breakfast challenges. School breakfast programs have been proven to move more milk in schools, and this is no exception in the Commonwealth. Breakfast Grab N’ Go kiosks, such as the one pictured above, help food On average, schools who received checkoff service staff prepare yogurt parfaits smoothies each morning, moving grants increased milk sales by 10.3 percent more milk and yogurt through schools. and yogurt sales by 12.8 percent last year. In Kentucky, 100 percent of the 175 school the grant, Farristown Middle School has increased breakfast districts are currently engaged in at least one participation from 2,338 breakfasts served per month to ADA dairy program. One example of moving more milk in schools can be found 6,679, and Kingston Elementary has increased from 3,588 in Madison County, where Glenn Marshall Elementary, per month to 7,362. In addition to working directly with school nutrition Kingston Elementary, Caudill Middle School, Shannon programs, the ADA of Ky. is a proud partner of the Johnson Elementary, Farristown Middle School, Foley Kentucky High School Athletic Association (KHSAA), Middle School and Silver Creek Elementary have used making chocolate milk the “official beverage” of the KHSAA. grant funds to purchase commercial blenders for making This unique partnership provides an opportunity for the milk and yogurt smoothies or kiosks for serving breakfasts dairy farm families of Kentucky and the KHSAA to promote with milk, cheese and yogurt in the hallway. Since receiving nutrient-rich chocolate milk to more than 70,000 studentathletes as a delicious and nutritious post-workout recovery beverage. The ADA of KY partnerships expand beyond state organizations and include the United States Department of Agriculture (USDA) Summer Feeding Program. Since 2009, an additional 450,000 pounds of milk has been moved each summer through this initiative. By participating in this program, the ADA of Ky. helps bring Kentucky students meals and milk during the summer months when many students would otherwise go hungry. During the summer of 2015, more than 2 million summer meals that included milk were served across Kentucky, an increase of 14 percent over 2014. Eleven Kentucky school districts received equipment grants from the ADA of KY which went to purchasing milk crate coolers to ensure milk was kept ice cold. These 11 districts served 193,979 cartons of milk, which represents a 31 percent increase in summer Daviess County Middle School used equipment grants, milk consumption for these districts! sponsored by the ADA of Ky., purchase an immersion For the summer of 2016, the ADA of KY has planned blender to prepare dairy-packed smoothies for students. five summer feeding events throughout the Commonwealth, Kentucky dairy farmer John Kuegel joined in as over 800 drawing more attention to feeding sites and promoting milk students celebrated and sampled banana and strawberry and dairy consumption to students, teachers and parents all smoothies. summer long.
May - June 2016 • KDDC • Page 12
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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Revisiting Culling Decisions with Changing Market Conditions Jeffrey Bewley
C
ulling decisions are one of the more difficult and complex decisions dairy producers make. Deciding when to cull a cow involves many economic and non-economic factors. Choosing when less productive cows should be culled is difficult. Too often, this decision is made solely on barn capacity or restrictions on how many cows we want to milk. Certainly, maintaining a minimum herd size is a valid reason for keeping cows when the bank dictates that barns should be kept full or for cash flow reasons. However, cows are often retained much longer than they should be. Keeping cows in the herd after production levels drop below feed costs results in significant losses and reduced profitability. A simple way to examine culling decisions is to calculate the breakeven production level necessary to cover feed costs. At a minimum, a cow should cover the costs of the feed she is eating to remain in the milking string. A chart depicting breakeven
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May - June 2016 • KDDC • Page 14
milk production levels for varying feed cost and milk prices is provided at right. As feed prices increase or milk prices decrease, the breakeven production level increases. For example, when milk prices are high ($25 per cwt.) and feed prices are low ($4 per cow per day), breakeven milk production level to cover just feed costs is only 16 pounds per cow per day. On the other hand, when feed costs are high ($10 per cow per day) and milk prices are low ($12 per cwt.), breakeven milk production level is 83 pounds per cow per day. With today’s feed costs for many herds in the $6 to 8 per cow range with milk prices around $15 per cwt., breakeven milk production levels range from 40 to 55 pounds. As feed and milk prices change, dairy producers need to re-evaluate when cows should be culled. Although difficult to consider, if the majority of the herd produces less than the breakeven milk production level, it may be time to consider exiting the dairy business. This method for calculating when to cull dairy cows only accounts for feed costs. Feed costs account for the largest percent of total costs (50 to 75%) but do not account for all costs. Thus, the true breakeven milk production level will be a few pounds higher than the levels in the table below and will vary considerably from farm to farm. Nevertheless, this serves
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund Table 1. Breakeven milk production levels (pounds per cow) needed to cover daily feed costs for varying daily feed costs and milk prices.
Milk Price ($/cwt.)
as a quick reference guide for thinking about culling decisions because if a cow cannot even cover her daily feed costs, she may need to be culled or dried off early. In practice, culling decisions also consider other factors. Probably the most important factor is whether the cow is pregnant. Another option for pregnant cows in late lactation producing below the breakeven milk production level is to dry them off early. One must also consider the costs of feeding her during the dry period, particularly if she will be dry for a long time. Another way of looking at when to cull a cow is something called a retention pay-off. With retention pay-off, the future income potential of a cow is calculated and compared to that of her potential replacement. The actual calculations for retention pay-off are fairly complex. But, the concept is useful when thinking about culling a cow. For each cow, you should ask yourself “What is the future income potential of this cow compared to the next replacement heifer that will be brought into the herd.” If the future income potential of the heifer is higher, the cow in question should be culled. This concept helps us see that culling decisions should be different for older cows than for younger cows as their future income potential is limited. The future income potential of a pregnant cow in late gestation is much higher than that of an open cow. The future income potential of a non-lame, low SCC cow is higher than a lame, chronically high SCC cow. The list of factors could go on and on. But, the important point to remember are (1) milking cows should at least cover the costs of the feed they consume to be retained in the herd and
$10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 $21 $22 $23 $24 $25
Feed Costs ($ per cow per day) $4 $5 $6 $7 $8 $9 $10 $11 40 50 60 70 80 90 100 110 36 45 55 64 73 82 91 100 33 42 50 58 67 75 83 92 31 38 46 54 62 69 77 85 29 36 43 50 57 64 71 79 27 33 40 47 53 60 67 73 25 31 38 44 50 56 63 69 24 29 35 41 47 53 59 65 22 28 33 39 44 50 56 61 21 26 32 37 42 47 53 58 20 25 30 35 40 45 50 55 19 24 29 33 38 43 48 52 18 23 27 32 36 41 45 50 17 22 26 30 35 39 43 48 17 21 25 29 33 38 42 46 16 20 24 28 32 36 40 44
$12 120 109 100 92 86 80 75 71 67 63 60 57 55 52 50 48
(2) additional cow factors may help determine when to cull a cow accounting for her future income potential compared to that of her potential replacement.
May - June 2016 • KDDC • Page 15
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
What Do I Need? What Do I Do To Get in Compliance?
A
ll Kentucky dairies want to comply with the state environmental laws and regulations. But if you’re not sure how to do that, this article may clear things up. Kentucky Division of Water (DOW) inspectors are beginning to make farm visits to see that each Kentucky dairy is in compliance and has the correct permits and plans. Also FSA and other lending institutions are requiring Nutrient Management Plans before they will make a loan. The Kentucky Dairy Development Council consultants are assisting producers in the compliance process. So far the DOW inspectors are willing to work with dairy producers and KDDC to get plans and permits completed. The following was sent to KDDC from Peter T. Goodmann, Director Division of Water. This explains the permits needed and the plans that are to be completed. If there are any questions about the permitting process laid out in this document, please contact your area KDDC consultant.
PERMITTING AGRICULTRAL OPERATIONS
Why a Permit is required - Kentucky Administrative Regulation 401 KAR 5:005, Section 1(2) states that unless exempted, a person shall not construct, modify, or operate a facility
without having received a permit from the cabinet. The word “facility” means a sewage system, and sewage means water-carried human or animal waste. 401 KAR 5:005, Section 1(3) refers to such sewage systems serving Animal Feeding Operations (AFOs) as Agricultural Waste Handling Systems and requires them to be properly permitted. Any operation where animals are confined and fed or maintained for a total of 45 days in a twelve-month period and where those animals are not exclusively on a sustained, vegetated pasture qualifies as an AFO. Therefore, AFOs that incorporate a liquid manure handling system for animal waste are required to have an operating permit from the Kentucky Division of Water (DOW), a division of the Energy and Environment Cabinet. Liquid Manure Handling Systems/Dry Systems - Liquid systems may include a holding pond for manure and the milk house drain at a dairy farm, an under barn holding pit at a hog farm or an uncovered stack pad at a beef farm. Dry systems may include a chicken litter barn at a poultry operation or a covered stack pad at a beef farm. Since dry manure systems do not qualify as a “facility,” no permit is required. KNDOP Permits - Generally, AFOs dispose of all of their animal waste by land applying wastewater and manure to crops or pasture and do not discharge or propose to discharge any pollutants to a receiving stream. Therefore, the Cabinet issues a
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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund type of permit called a Kentucky No Discharge Operational Permit (KNDOP) to AFOs. The most important condition of the KNDOP is that the facilities not allow a discharge of any wastewater into a Water of the Commonwealth. A Water of the Commonwealth includes all rivers, streams, creeks, lakes, ponds, reservoirs, springs, wells, marshes, and all other bodies of surface or underground water. Allowing holding ponds or lagoons to overflow, releasing contaminated storm water runoff from feeding areas or uncovered poultry litter piles, or over applying wastewater to land application fields causing runoff are all examples of prohibited discharges. In order to help reduce the chance of an unpermitted discharge occurring, KNDOPs state that land application shall not occur on snow covered, frozen, or saturated ground, or during precipitation events. Types of KNDOPS - The DOW currently issues two types of KNDOPs to AFOs. The first type of KNDOP is in a General Permit format. The general permit is for small and medium operations only. General permits are not site specific and help to lessen the administrative process of issuing permits and quicken issuance time. General permits are appropriate for a group of similar facilities that operate in a similar manner. Most small and medium facilities receive an identical, general permit. The second type of KNDOP is in an Individual Permit format. Individual permits are site specific and while they can include special conditions as deemed necessary to help prevent pollution of Waters of the Commonwealth they typically do not. The DOW issues individual permits to large facilities. A large facility is defined as an operation with at least 1000 beef cattle, 700 dairy cows, 2,500 hogs (over 55 lbs) or 10, 000 hogs (under CONTACT US 55 lbs.) In addition to the no TODAY!! discharge requirement, KNDOPs issued to large facilities include setbacks from dwellings, streams, roadways and other features, require daily inspections to evaluate the potential for unauthorized wastewater discharges to There’s a lot of interest in Kentucky Dairy Waters of the Commonwealth Farms. Helping folks buy and sell farms and stipulate measuring is what we do best. Contact any of us rainfall events and maintaining on the Kentucky Prime Realty team to accurate precipitation logs. discuss your real estate needs. Both types of permits limit the number of animals at the site. The number is Dan Campbell, Associate Broker based on what is presented in 859-319-0866 the application and historical dan@kyprimerealty.com information about the facility. Harvey Mitchell, Principal Broker The number is not meant to Matt Mitchell, Realtor harvey@kyprimerealty.com 502-758-4226 prevent farms from growing, 232 S. College Street Harrodsburg, Ky 40330 matt@kyprimerealty.com but to prevent too many animals from causing an overflow of the WWW.KENTUCKYPRIMEREALTY.COM Steve West, Realtor storage system and to ensure Office 859-265-5100 859-707-9745 an adequate amount of land is steve@kyprimerealty.com Fax 859-265-5061 available for land application.
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Cont’d on pg. 18
May - June 2016 • KDDC • Page 17
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund Cont’d from pg. 17
The number may be adjusted when a different number or type of animal is present, provided sufficient manure storage capacity and land is available. Nutrient Management Plans - Kentucky Administrative Regulation 401 KAR 5:005, Section 25(1) requires any AFO to have a Nutrient Management Plan (NMP). The basic purpose of the NMP is to balance the nutrients already in the soil with those applied in the form of animal wastes to achieve the needed nutrient level for maximum crop production. 401 KAR 5:005, Section 25(2) lists additional elements the NMP should address. The Natural Resource Conservation Service (NRCS) has historically helped landowners in developing NMPs. Independent contractors and consulting firms may also help in writing NMPs. A professional engineer or certified Technical Service Provider (TSP) does not have to write the NMP and nothing precludes the landowner from writing his or her own plan. However, the plan must be consistent with NRCS Conservation Practice Standard Code 590. NMPs must be technically correct, easy to follow and should be a useful guide to the permittee in operating the facility. Agricultural Water Quality Act - The provisions of the Agriculture Water Quality Act (AWQA) require most farm operations, whether animals are present or not, to develop an Ag Water Quality Plan (AWQP). An AWQP is required for farms of 10 acres or more. The Surface Water Permits Branch (SWPB) of the DOW does not deal with AWQPs directly. The Kentucky Division of
Conservation implements the agriculture waster quality program. However, if a farm is required to have a KNDOP in addition to an AWQP, the requirement to have an AWQP is incorporated into the KNDOP as an enforceable condition of the permit. NMPs must be consistent with the AWQA. Applying for a KNDOP - Unpermitted AFOs should apply to the DOW for a KNDOP if they have a liquid manure handling system by submitting a Short Form B, which is available on the DOW website. Short Form B is a two-page application form with one page of instructions. It should be completed and mailed to the DOW central office in Frankfort. The applicant must attach a topographical or equivalent map to the form showing the facility’s location. The applicant should submit their NMP with the form if the operation qualifies as a large facility. The NMP is reviewed to ensure it meets the regulatory requirements. An individual KNDOP expires five years after issuance, at which time a renewal application should be submitted so the DOW can re-issue the permit. The DOW usually mails reminder letters to the permittees letting them know it is time to renew the permit. Any changes in the facility regarding animal number or type will be incorporated into the new permit. The general KNDOP that is currently in effect expires February 29, 2016. A landowner who applies for a KNDOP and is issued coverage under a general KNDOP will have coverage until the permit expires. Facilities in Close Proximity - Two or more AFOs under common ownership are considered a single operation if they adjoin one another or if they use a common area or system for
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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
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area of our website. The public notice period lasts for 30 days, during which time comments may be made concerning the permit. Received comments are responded to by the DOW. Construction permits for large AFOs are also put on public notice for 30 days. The CAFO Question - A Concentrated Animal Feeding Operation, or CAFO, is a large AFO that is regulated under the Clean Water Act (CWA) though the National Pollutant Discharge Elimination System (NPDES) program. Among other conditions, an AFO is designated as a CAFO based on size, or the number of animals present as stated in 40 CFR122.23 (b). Federal regulation 40 CFR 122.23(a) states that a CAFO is a point source that is subject to NPDES permitting. A CAFO would require a Kentucky Pollutant Discharge Elimination System (KPDES) permit to operate legally. However, courts have ruled that EPA cannot require a CAFO to obtain a NPDES permit unless the facility actually discharges or proposes to discharge. Therefore, Kentucky typically does not refer to AFOs of any size as CAOFs. Furthermore, Kentucky Administrative Regulation 401 KAR 5:005, Section 25(6) states that if an AFO does not discharge, does not intend to discharge, and obtains a KNDOP then the cabinet shall not consider the AFO to be a CAFO. The KDDC in conjunction with the KDOW, NRCS and Division of Conservation will continue to offer programs to assist dairy farmers in becoming compliant. Understanding the rules and the process is the first step. If you have questions contact the KDDC office at 859-516-1129 or your regional KDDC Dairy Consultant.
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land application. Construction Permits - Unless exempted, a person shall not construct, modify, or operate a facility without having received a permit from the cabinet [401 KAR 5:005, Section 1(2)]. Therefore, in addition to operating permits, proposed AFOs are required to obtain a construction permit before building or installing a liquid manure handling system. The correct application form is the Short Form B, the same form used to apply for a KNDOP. The box that reads “Apply for a construction permit” under the purpose of the application should be marked. The form should be completed and mailed to the DOW central office in Frankfort. A topo or equivalent map indicating the facility’s location should be attached to the form along with the design criteria of the manure handling system. The design criteria typically would show what is being built, the size of the structure, the storage capacity of the structure based upon the number of animals the structure will be supporting, and the amount of manure or other waste those animals produce. Any additional wastewater such as flushing water, wash water, animal cooling water or rainwater that enters the system should be accounted for in the design. After receiving a construction permit application, the DOW regional office schedules a visit to the proposed location. The purpose of this site survey is to try to prevent animal waste structures from being built at poorly selected sites. If an existing facility is expanding and wishes to add a lagoon or some other type of animal waste storage structure, a construction permit is needed for that addition as well. Public Notice - Because of the public interest in large AFOs, the DOW lists first time KNDOPs issuances on the public notice
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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
MPP Not Paying By Beth Cox
Overview: The Margin Protection Program for Dairy Producers (MPPDairy) replaces MILC and is effective through December 31, 2018. The Margin Protection Program offers dairy producers: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee; and (2) various levels of buy-up coverage. Catastrophic coverage provides payments to participating producers when the national dairy production margin is less than $4.00 per hundredweight (cwt). The national
dairy production margin is the difference between the all-milk price and average feed costs. Producers may purchase buy-up coverage that provides payments when margins are between $4.00 and $8.00 per cwt. To participate in buy-up coverage, a producer must pay a premium that varies with the level of protection the producer elects. With the consistent low milk prices producers are struggling to cover their cost of production. So why is MPP not paying out? Input prices are also lower at this time so this is not tipping the seesaw enough to pay out. Below are the component and final pay out prices by month.
Prices:
Milk Final Feed Alfalfa Soybean All Margin Pay Corn Costs for Month Hay Meal Milk Above Feed Periods ($/bu) MPP-D ($/ton) ($/ton) ($/cwt) Costs ($/cwt) ($/cwt)
Milk Margin /pay Period*
2016
Apr Mar Feb Jan
2 1
3.58
153.00
303.81
15.00
8.16972
6.83027
3.57
144.00
276.22
15.30
7.83291
7.467087
3.57
142.00
273.61
15.70
7.78632
7.913670
3.66
147.00
279.56
16.10
7.99511
8.104886
7.14868 8.00928
2015
Dec Nov Oct Sep Aug July June May Apr Mar
6 5 4 3 2
3.65
150.00
289.78
17.20
8.10060
9.099397
3.60
150.00
308.60
18.20
8.18529
10.01471
3.67
156.00
327.97
17.70
8.48496
9.21504
3.68
157.00
333.62
17.50
8.55091
8.94909
3.68
159.00
357.85
16.70
8.75641
7.94360
3.80
169.00
375.71
16.60
9.15341
7.44659
3.58
178.00
335.03
16.90
8.74170
8.15831
3.62
192.00
320.23
16.70
8.86763
7.83237
3.75
184.00
336.61
16.50
9.01788
7.48212
3.81
172.00
357.83
16.60
9.07382
7.52618
May - June 2016 • KDDC • Page 21
9.55705 9.08207 7.69510 7.99534 7.50415
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
2016 Kentucky Dairy Facts KENTUCKY
The total amount of milk produced in the state amounted to
is home to approximately
61,000
1.1 billion pounds
milk cows
who live on
690
That’s equal to over
125 million gallons
dairy farms
A typical Kentucky dairy farm has a herd of about
87%
of all milk produced in 2015 was used and consumed in the form of fluid milk Kentucky has six commercial milk processing plants located in Louisville,
London, Murray, Somerset, Fulton and Winchester Kentucky is...
88
In 2015, a dairy cow in Kentucky cost about
milking cows
$1,993 Each dairy cow in Kentucky provides an average of The average value of a day’s milk per cow was about
2,047 gallons
27th in milk production of milk 26th in number cows output per 40th in milk cow 12th
in the number of licensed dairy operations
$10.33
of milk per year That’s an average of
6.7 gallons of milk per day
Cash receipts for the sale of milk by dairy farmers amounted to
That’s enough to make 5.8 pounds of cheese or 2.7 pounds of butter each day
$192 million
Top milk producing counties:
1) Barren (110.6 million pounds) 2) Logan (108.7 million pounds) 3) Adair (73.8 million pounds) 4) Christian (73.5 million pounds) 5) Warren (72.9 million pounds) 6) Metcalfe (67.0 million pounds)
To learn more about Kentucky dairy farmers, please visit
TM
www.southeastdairy.org *All facts are based on 2015 USDA and KDA data
May - June 2016 • KDDC • Page 22
g tdairy.or theas sou
KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund
Allied Sponsors
S P E C I A L
Platinum AgCentral Alltech Arm & Hammer Animal Nutrition Bluegrass Dairy & Food Burkmann Feeds Dairy Farmers of America Dairy Products Assoc. of KY Farm Credit Mid-America IDEXX IMMVAC, Inc. Kentucky Department of Agriculture Kentucky Farm Bureau Kentucky Soybean Board Mammoth Cave Dairy Auction MultiMin USA Organic Valley Prairie Farms Whayne Supply Zoetis
T H A N K S T O
Gold Ag Central Animal Health Management Services Arm & Hammer Animal Nutrition CPC Commodities DeLaval IDEXX Kentucky Nutrition Service Land O’Lakes Mid-South Dairy Records Select Sires MidAmerica (KABA) Smith Creek, Inc.
O U R P L A T I N U M S P O N S O R S
Silver
Mammoth Cave Dairy Auction
Dairy Express Services Elanco Grain Processing Corp. Kentucky Veterinary Medical Assoc. Luttrull Feeds Owen Transport Southern States
Bronze ABS Global Advantage Hoof Care Bagdad Roller Mills Chaney’s Dairy Barn Clark Dairy Supply Cowherd Equipment Double “S” Liquid Feed Genetics Plus Hinton Mills Logan County Animal Clinic Owen Trucking Company STF Consulting Wilson Trucking
May - June 2016 • KDDC • Page 19
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2016 Dairy Calendar of Events July 2016 July July July July July July July July July July July
2 Liberty 4-H District Dairy Show, Casey Co. Fairgrounds 9AM EDT 10 Kentucky State Fair Livestock Entry Deadline 12 Merck 365 Meeting, Christian County Extension Office, 10:00 AM CDT 13 UK Dairy Research Showcase, Weldon Suite – Goode Barn, Lexington, 9:00 A.M. ET 13 Merck 365 Meeting, Henry County Extension Office, 10:00 AM EDT 14 Merck 365 Meeting, Mason County Extension Office, 10:00 AM EDT 14 Horse Cave 4-H District Dairy Show, Burley Fields Livestock Center 9:30 CDT 15 Merck 365 Meeting, Marion County Extension Office 10:00 AM EDT 20 Tollesboro 4-H District Dairy Show, Tollesboro Fairgrounds 11:00 AM EDT 22 KDDC Board Meeting TBA 22-23 Kentucky Junior Livestock Expo, L.D. Brown Ag Center, Bowling Green
August 18-28 Kentucky State Fair, Louisville KY August 18 Commodity Breakfast, Commodity Tent ,State Fair August 18-21 4-H and Open Dairy Cattle Shows, KY State Fair August 23-25 Kentucky Milk Quality Conference, Lake Barkley State Park August 25 KY Farm Bureau Country Ham Breakfast, South Wing. State Fair
September 2016 September 8 CPC Fall Field Day, Fountain Run, KY September 23 KDDC Board Meeting TBA
October 2016 October 5-8 October 22
KDDC Young Dairy Producer Bus Tour, World Dairy Expo, Madison, WI Dare to Dairy, University of Kentucky Coldstream Dairy, Lexington, KY
November 2016 August 2016 August 17
Kentucky State Fair Dairy Skillathon and Pizza Party, KFEC 7:00PM
Milk Matters May - June 2016
Nov 15- 16
National Dairy Leaders Coalition Conference, Sloan Convention Center, Bowling Green, KY