KY Milk Matters November/December 2013

KENTUCKY

November-December 2013 w w w. k y d a i r y. o r g

Milk Matters

Supported by

KY Dairy Partners Annual Meeting Set for Feb. 25-26 Find out more on pages 8-9 KDDC MILK Program Making a Difference More info on page 10

A Wammy of a Day

By Teri Atkins

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he first week in November always brings dairy enthusiast to Louisville, KY for the North American International Livestock Expo. This year there were a record number of entries for the dairy show and the competition was fierce. The shows were stacked with quality heifers and cows throughout all seven breeds: Ayrshire, Brown Swiss, Guernsey, Holstein, Jersey, Milking Shorthorn and Red & White Holstein.

It all began with the Junior Shows. Kids of many ages came from all over the United States to show their best animals in hopes of winning the Supreme Champion awards. Of course there can only be one Supreme Heifer and Supreme Cow. This year the Jersey breed took top honors in both Supreme competitions and to some this is no surprise. The NAILE hosts the All American Jersey show and therefore they bring in some of the best of the breed every year. The Supreme Champion Heifer was awarded to Garrett Hageman f rom Sidney, OH. Garrett received a banner and $500 sponsored by KDDC. Ben Sauder, with River Valley Dairy, of Tremont, IL received the Supreme Champion Cow banner and $2,000 sponsored by KDDC. The NAILE also brings in numerous youth divisions, 2-year colleges and 4-year college teams to participate in both Dairy Quiz

Bowl and Dairy Judging Competitions. This year there were over 50 teams involved in these events. The winning teams were: Minnesota – Youth Division; Kaskaskia – 2-year team; Michigan State – 4 year college.

One of the most anticipated events during the dairy shows at NAILE has to be the Jersey Jug. The lights go down, the stage is decorated, and the cows enter under the bright light to let the beautiful Jersey cows strut their stuff. If you have never witnessed the Jersey Jug it is a sight for all to see. The winner was TJ Classic Minister Venus-ET, owned by River Valley Dairy of Tremont, IL. On the final dairy show day, there were seven beautiful Grand Champion cows parading the show ring for the most prestigious dairy award at NAILE, Supreme Champion. Four of the seven cows were owned by KY dairy farms. All of the judges were given the opportunity to check out all breeds and vote for who they think deserves Supreme. It only takes a few minutes; however it feels like forever when you are standing ringside for the announcement.

Fairdale Farm, LLC of Owenton, KY was honored with the Supreme Champion banner and $2,500 premium sponsored by KY Farm Bureau, with their cow Frosted Sieg Wammy ET. Wammy is no stranger to the show circuit or to the Brown Swiss breed. After calving in with twins this summer she jumped right in the deep end with Grand Champion Cow at the 2013 KY State Fair, Reserve Grand Champion Cow at the Mid-East

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

2013 KDDC Board of Directors & Staff

President’s Corner Bob Klingenfus

Executive Committee President: Bob Klingenfus Vice President: Bill Crist, Sr. Sec./Treasurer: Tom Hastings EC Member: Jim Sidebottom EC Member: Tony Cowherd

Board of Directors District 1: Ellie Waggoner 270.210.3742 District 2: Jimmy Wright 270.726.7079 District 3: Don Kinslow 270.646.0086 District 4: William Crist, Sr. 270.590.3185 District 5: Tony Cowherd 270.469.0398 District 6: Steve Young 270.688.1364 District 7: Larry Baxter 859.612.2738 District 8: Charlie Edgington 859.229.0442 District 9: Robert List 606.748.2944 District 10: Bob Klingenfus 502.817.3165 District 11: Bill Mattingly 270.699.1701 District 12: Larry Embry 270.259.6903 Equipment: Eric Risser 423.386.7753 Milk Haulers: Mike Owen 270.392.1908 Genetics: Dan Johnson 502.905.8221 Feed: Tom Hastings 270.748.9652 Nutrition: Dr. Ron Wendlandt 502.839.4222 Dairy Co-op: John Brooks 606.375.6002 Veterinary: Dr. Charles Townsend 270.726.4041 Finance: Joel Oney 330.464.1804 Former Pres.: Jim Sidebottom 270.932.1517

Employee & Consultants Executive Director: Maury Cox 859.516.1129 DC-Central: Teri Atkins 859.516.1619 DC-Western: Dave Roberts 859.516.1409 DC-Southern: Meredith Scales 859.516-1966

KDDC 176 Pasadena Drive Lexington, KY 40503 www.kydairy.org KY Milk Matters produced by Carey Brown

November - December 2013 • KDDC • Page 2

The Value of Premium Dollars

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ecently the Kentucky Department of Agriculture and its Kentucky Proud Program introduced “Udderly Kentucky Milk”.

The program is designed to return $.07 per gallon or approximately $.80/cwt to those producers participating in the program. What is the real value of premium dollars?

Statistically dair y producers receive about 15 percent of gross milk sales as profit. Stated another way, for every six dollars in sales, we get to keep about one dollar.

Taking the $.80/cwt for example, a producer would have to sell $4.80 of milk to get the same $.80 profit. It would take a 24 percent increase in production to offset this premium with $20.00/cwt milk. In a herd producing 50 lbs. per cow, two cows increasing by 24 percent or 12 lbs. per cow would produce 24 more lbs. between them than the 100 lbs. previously. The 24 lbs. increases gross sales by $4.80. The producer then keeps one sixth or $0.80 as profit. How hard would it be to increase production by 24 percent to earn the same dollars? I am sure producers in this program are very thankful to KDA and the KY Proud Program for “Udderly Kentucky Milk.”

The same holds true for Somatic Cell Counts, Preliminary Incubation Counts and volume premiums available to all of us. The financial cost for these premiums is usually low, with no extra feed, and minimum labor; however getting them generally requires paying extra attention to details in cow care

and equipment cleaning. Although these premiums are usually smaller individually, combining all plant premiums can easily reach over $1.00/cwt. Considering 15 percent profit margins and $20.00/cwt. milk, statisticcally you can expect $3.00/cwt. as profit per cwt. of milk sold. That $1.00 in premium would then become over 30 percent of your net profit. A one dollar premium on one million pounds of milk would be $10,000. Are premiums worth paying attention to? How long can a producer survive if other producers are making 30 percent more net profit because of their quality?

Since its inception one of the concerns KDDC has had is the possibility that producers in Kentucky and the Southeast might be losing some premium dollars because of diverted milk and transportation credits. Some have suggested that we might be losing as much as $1.50/cwt. Kentucky has had a reputation for lower milk production and lower quality milk but that perception is changing.

Processors are demanding and willing to pay more for higher quality milk. We are in a milk deficit area where quality milk should bring a premium.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Chaney’s Now Distributes Product to Kroger Stores in Bowling Green Rewritten from exerts: By ROBYN L. MINOR The Daily News rminor@bgdailynews.com 783-3249

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haney’s Dairy Barn on Thursday made the first of what owners Carl and Debra Chaney hope will be many more milk deliveries to the doors of Bowling Green Kroger stores. “We have no idea how much they are going to be selling for us,” said Carl Chaney. “We are just going to have to see what the demand is.”

Each of the three stores took delivery of four nine-bottle cases.

“It’s not a lot, but we wanted to be cautious because we don’t want to waste any,” Debra Chaney said.

The idea is for the milk to be as fresh as it possibly can, that’s why the Chaneys are handling their own distribution. A month ago, the Chaneys took over their distribution to 11 area Houchens Industries stores. Debra Chaney said sales in Houchens’ three Glasgow stores are going well.

Mike Murphy, grocery merchandiser for Kroger’s Mid-South Division, said he admires the Chaneys for their willingness to take such a risk and be a producer and distributor of their own product rather than just shipping their milk to some other producer.

After being approached by the Chaneys about the possibility of Kroger carrying their milk, Murphy stopped by Chaney’s Dairy Barn on Nashville Road and talked with them about how Chaney’s has evolved from being a farm established in 1888 to being the maker of its own products. “We talked about their family history and toured their barn,” Murphy said. “It just fit in well with our strategy to become more regional and locally relevant for the customers we serve.”

That conversation was a year ago followed by lots of paperwork to get the process started. “We are really looking forward to the relationship and growing sales,” he said. Murphy said he and others frequently visit farmers markets and attend Kentucky Proud events in search of locally produced products that the stores could potentially carry.

Carl Chaney said, “We soul searched” about distribution because of the cost involved buying the truck and the fuel costs. “And we said if we want to make sure it’s done the way we want it to be done, we are going to have to take charge,” he said. After months of looking for a truck – most were in the $35,000 range – they found a used one from a friend in the candy business for just $5,000. “But it’s in good condition,” he said.

Debra Chaney said grocery store customers may find that their milk has a bit of a premium price compared to other labels. “But we think people will find the taste is worth it,” she said. The secret is that the milk comes from all Jersey cows who are very well taken care of and the milk is kept really cold, Carl Chaney said. Jersey milk is higher in calcium, protein and butterfat than that of other cows.

The milk available in stores is 2 percent, skim, whole and chocolate.

The milk has to be pasteurized and the Chaney’s current customers

Chaney’s Now Distributes Product To Kroger Stores In Bowling Green: Chaney’s Dairy Barn distributes their milk to the three area Krogers, along with 11 area Houchens Industries stores.

(Miranda Pederson/Daily News) - Photo by Miranda Pederson/Daily News said they also wanted it homogenized. The Chaneys take their milk once a week to Schrock’s Dairy in Logan County where they put it in Chaney’s bottles, plastic for Kroger and Houchens and glass bottles for what they sell at Chaney’s Dairy Barn.

In addition to their milk, the Chaneys produce ice cream, something that Murphy said might be a possibility to carry in the future. “We will first want to evaluate to see how successful the milk is,” he said. But success won’t be determined by sales alone, Murphy said. Factors would include whether people are purchasing items in the milk department, who might otherwise not, and if it helps the store become more regionally relevant.

As for the ice cream production, Carl Chaney said they will produce between 18,000 and 19,000 gallons this year, up about 12 percent. “We have increased in production every year,” he said. “We are in our 10th year (of retail), and we would have never anticipated this.” Debra Chaney credits their success to having a lot of help from dedicated employees, including Jeremy Jones who helps her deliver the milk.

Chaney’s employs 28 to 32 people over the summer. During the winter, they have about 12 people working in the retail/restaurant facility. The facility closes in January. “That’s when we do a hard cleaning and start setting up events for the year,” Carl Chaney said.

“We will sit in here for two straight days working on the calendar. ...

Because by the time we hit March, there is no thinking time if you don’t already have events set up.”

Follow business editor Robyn L. Minor on Twitter at twitter.com/ bowserminor or visit bgdailynews.com.

November - December 2013 • KDDC • Page 3

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Executive Director Comments Maury Cox

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here are two topics I’ve received several calls on over the last few weeks. The questions have been primarily from reporters and dairy producers asking about the “Dairy Cliff” if no Farm Bill is passed and the status of the Southeast Milk Litigation Settlement.

Dairy Cliff or “The Story of Chicken Little”:

If ever there was a modern day story which mirrored the folk tale, “Henny Penny”, or “Chicken Little”, the “Dairy Cliff ” would be the one.

Just as Chicken Little used hyperbole to stir people to hysteria, there are some using the same mantra, in a ‘fowl’ attempt to push Congress into taking action. The “Dairy Cliff ” provides the perfect scenario to stir those emotions. Milk prices going to $8.00 a gallon in stores ranks right up there with “the sky is falling, the sky is falling”, especially for families living on limited budgets already. It’s not that I don’t think we need a new Farm Bill. I’m not saying that at all. What I am saying is dairy farmers should not be inappropriately painted as the beneficiaries of an obsolete dairy policy which at the very best would be a remote possibility if Congress doesn’t act.

The fact is, if an extension to the 2008 Farm Bill was not passed and dairy pricing reverted to the 1949 original law, parity pricing is at the discretion of the USDA Secretary of Agriculture to consider but not necessarily obligated to use. The Secretary has the option to use other economic factors. I think most dairy farmers are getting tired of defending and explaining this tall tale. I know I have.

What might really happen concerning the Farm Bill: The House Agriculture Committee Chairman Frank Lucas issued the following statement just before the Congressional holiday recess began on December 13, 2013. “We have made great progress on the Farm Bill and continue to have productive meetings. There are still some outstanding issues that we are addressing. I am conf ident we’ll work through them and f inish a Farm Bill in January. Concurrent with our ongoing discussions this week, I will f ile legislation to extend the current Farm Bill through January to allow us to f inish our work without the threat that permanent law will be implemented. Having this option on the table is the responsible

thing to do in light of our tight deadline.”

It is not known at this writing whether the Senate will agree to the extension but I suspect neither the House nor Senate would want to fall back to the 1949 legislation. Giving a one-month extension should allow the two to come together and pass a new Farm Bill.

Southeast Milk Litigation Settlement Update:

Most of you should know by now a motion has been filed with the Court regarding the release of funds to Class participants in the SEMLS. This information is directly from AgriVoice Dairy News Network: (Greeneville, TN) A simple 4-page Court Order, a culmination point for one of the most complex farm and food class action litigations in United States history, will return $85 Million dollars to Southeast dairy farm communities in the coming weeks.

In an Order entered on December 11, 2013, US District Judge J. Ronnie Greer approved the disbursement of the DFA Settlement Funds in the Southeast Milk Litigation, following a Motion filed by Plaintiff ’s Attorneys for the Dairy Farmer Class on November 26, 2013. The litigation is based in US District Court, Greeneville Division, Eastern District of Tennessee, in the Sixth Federal Circuit.

With that Order, checks can now be cut and distributed to 6,086 class members who will receive an average of $14,072 each. Payments are prorated depending on pounds produced and determined to be class-eligible, larger herds will receive significantly more than the average. However, if farmers elected to use third-party representation, those farmers themselves will receive anywhere from 15% to 30% less, depending on the percentage of fees charged by the third-party filer they elected to use.

There is a good possibility, but not a guarantee, that Class members will receive these checks before the end of the year. With the first Dean Foods/SMA Settlement payment issued in January, the Order for Disbursement was filed on January 8, and many farmers received checks beginning two weeks later, on January 22. With the second Dean payment, there was a month before checks were received following the Order.

Thanks to Julie Walker, AgriVoice Dairy Network for supplying information regarding the SEML. The KDDC wishes you a Merry Christmas and a Happy New Year!

KYFarmStart Short Course

The KYFarmStart Short Course is a handson program designed to teach basic concepts of dairy management. The course will be at the University of Kentucky Coldstream Dairy where participants will have the chance to apply new concepts in a real-world farm setting.

A wide variety of cow-focused and business management topics will be covered. This is a unique chance to increase your knowledge of dairy management.

A beginning farmer is classified as someone who has been the primary financial decision maker for the operation for less than 10 years.

This means that even farmers who have been on the dairy for years but haven’t been the financial decision maker qualify for the program, as well as farmers who are new to dairying.

The three day event is March 11-13 and will include hands on learning experiences with topics such as: Mission & Vision, Calves & Heifers, Improving Milk Quality,Health Care Diagnostics; Managing Feeding Program for the Milking Herd; Body Condition Scoring, Managing Feeding Program, Improving Cow Comfort; Working with Nutritionist, Business Management, and Reproduction; Whole-

November - December 2013 • KDDC • Page 4

Farm Management and Benchmarking; Dry Cow Management, Forage Resources; Using Production Records; and Working through Family Dynamics.

If interested in this program you can contact Sarah Lovett at (859) 218-4382 or by Email: Sarah.Lovett@uky.edu. Registration is $100 and first–come, first-served. You must return a registration form and fee by February 26, 2014.

This project is supported by the Beginning Farmer and Rancher Development Program of the National Institute of Food and Agriculture, USDA.

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The Alltech on-farm program is designed to help you along the way. Contact us and see what we can do… together.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

A Piece of West Kentucky Dairy History Comes to an End By: Dave Roberts

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.C. Milk Company, Inc. processed its last gallon of milk November 8th, 2013, eighty six years after they began in the dairy business. The company has gone through several ownerships in the past years being purchased by Dean Foods Company in 1998, and then spun off to National Dairy Holdings Company in 2001 and finally being bought by Groupo LaLa in 2010. The decision to close the plant was recently made. The following is a summary of the history of U.C. Milk Company written in 2002 on U.C. Milk Company’s 75th Anniversary by William M. Corum, grandson of the founder M. Ashby Corum.

U.C Milk Company, Inc. had a humble beginning in 1927 when two Madisonville men experienced in farming and dairying, M. Ashby Corum and John H. Utterback, established the company.

Previously unpasteurized milk from Corum and Utterback’s dairies was sold from horse drawn wagons on the streets of Madisonville.

Pasteurization was a new process which was being done in Chicago processing plants and this procedure of making milk safer and more wholesome was spreading throughout the country. Mr. Corum and Mr. Utterback decided to build a milk processing facility in Madisonville.

In 1927, Mr. D.W. Gatlin a prominent name in business and bank management in Madisonville was office manager for Corum Brothers, a highway construction and farming company headed

by Ashby Corum. Mr. Gatlin and Mr. Elby Masoncup set up the record keeping system for Mr. Corum’s operations, including the new U.C. Milk Company. Mr. Gatlin in 1928 became office manager of U.C. Milk Company and in 1930 business manager.

After processing and packaging began Mr. Corum and Mr. Utterback decided to incorporate and sell shares of stock in their new company. The original sale of authorized capital was

November - December 2013 • KDDC • Page 6

$50,000.00 divided into 500 shares and offered to the community at $100.00 per share.

In 1927 a contest was held to select a name for the products to be sold. Five people split the $15.00 prize for submitting the name GOLDENROD, the state flower.

Through the first seventy-one years, the company was independent and the Corum family owned the majority of the stock. At the time of the acquisition of U.C. Milk Company by Dean Foods, U.C. was the only 100% independently owned processor and packager of milk in Kentucky.

In the early years and through 1930’s the company was known as much for making butter as for selling pasteurized milk.

Transportation changed during the 1930’s from horse wagon delivery to motorized truck. The company expanded into a wider territory, hauling its products as far away as Crittenden and Union Counties. In about 1932, Wm. R. “Andy” Perry hitched a ride on one of the milk trucks to see his future bride, Bess Salmon, who lived in Madisonville. While there he applied for employment with U.C. Milk Company. He was subsequently hired and later, in 1942, at the death of Mr. Utterback, Mr. Perry became General Manager of the company. He retired in 1973 after almost 42 years of service.

The first known acquisition by U.C. was the purchase of Rockport (Ky.) Creamery in 1932. The company also purchased the Long Ice Cream Company of Madisonville, Highland Dairy of Providence (Ky.), Blue’s Ice Cream of Dixon (Ky.), the Ausenbaugh Dairy of Dawson Springs (Ky.), and the Hightower Dairy of Earlington (Ky.).

For U.C. Milk Company 1951 was a significant year. In March the company had a labor strike lasting for several days. When the strike was settled the employees were represented by the Local 14746, United Mine Workers of America (later becoming United Steelworkers of America). Since that time and for over 50 years, the employees and the company have enjoyed a long and stable relationship with no lost work days due to a labor stoppage. Also

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund this year U.C. purchased Cardinal dairy of Franklin, Kentucky. This allowed U.C. access to a better supply of raw milk, which was disappearing in and around Hopkins County. Simpson and surrounding counties had many dairy farms. By 2002 there was not one Grade A milk cow in the counties of Hopkins, Webster, Union and Henderson.

In 1962 U.C. purchased Meadow Gold Dairy of Princeton, Kentucky owned by Beatrice Foods of Chicago.

This was the first acquisition from a major company in the dairy industry. Atkins Dairy of Hopkinsville, Kentucky was bought in 1968 and U.C./Goldenrod was becoming the major supplier of dairy products in Western Kentucky.

A decade later (1978) U.C. Milk Company acquired two Evansville, Indiana dairies. Ideal Pure Milk and American Dairy were bought from Baskins-Robbins Ice Cream Company. Another business opportunity came in 1983 and 1985 with the closing of two major processing plants in Nashville, Tennessee; the Sealtest and FLAVO-RICH plants. At this point U.C. made a marketing move to expand into Middle Tennessee. This proved very successful with the establishment of a distribution branch in Nashville, Tennessee.

In 1994 U.C. acquired the FLAV-O-RICH dairy routes in Louisville, Kentucky. FLAV-O-RICH was a major dairy processor in the southeast owned by Dairymen, Inc., a major marketer of raw milk in the eastern United States.

After U.C. was acquired in 1998 by Dean Foods Company, U.C. through Dean Foods, purchased R.G. Clark Distributors, Inc. of Paducah, Kentucky. Clark was a very large distributor in the Jackson Purchase area of Kentucky for U.C.’s Goldenrod brand products.

In 2002 there were more Goldenrod dairy products sold each day in Western Kentucky than dairy products from any other company.

In 2001 U.C. Milk Company was spun off from Dean Foods to National Dairy Holdings Company and was operated as such until 2010 when it was bought by Groupo LaLa a Mexican company. During this time the Goldenrod brand was phased out and replaced by the Borden brand.

U.C. expanded through the years by acquisition and aggressive marketing, and by offering the best quality products and service available in the marketplace. By 2002 and until production ended on November 8th, 2013 the products produced and packaged in Madisonville were sold in Kentucky, Tennessee, Indiana, Illinois, Ohio and Alabama.

U.C Milk Company Inc. was built by dedicated employees who served many years with the company and by loyal customers who purchase the company’s products through its eighty six year history.

Not lost in this story of a West Kentucky milk plant is the vision that two Madisonville dairy farmers had.

M. Ashby Corum and John H. Utterback had an idea of how they may improve the marketability of the milk they produced. From that idea came eighty six years of successfully processing and distributing “Nature’s Most Perfect Food”.

November-December 2013 • KDDC • Page 7

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund KDDC Young Dairy Producer Conference, SUDIA/ADA Meeting & Kentucky Dairy Partners Annual Meeting February 25 & 26, 2014 Sloan Convention Center, 1021 Wilkinson Trace, Bowling Green, Kentucky

Tuesday, February 25th (All Times are Central Time) Young Dairy Producer Conference

SUDIA/ADA Meeting

9:00

Registration for YDP Conference

10:00 SUDIA/ADA Budget Committee Mtg.

9:45

YDP Welcome

1:00

SUDIA/ADA New Director Meeting

2:00

SUDIA/ADA Board Meeting

10:00 Gary Sipiorski – Preparing for a Visit to the Banker 10:30 Kevin Ferguson - Farm Transitions 12:00 Lunch & Speaker Dan Clark 1:00

Gary Sipiorski – Dairy Dozen

1:30

Sustainable Dairy Manual

2:00

Gary Sipiorski- Strategies for Remaining Competitive as a Small Dairy Ice Cream Break

3:00 3:30

YDP/SUDIA 2-4:30 Exhibitors Set up Exhibits 5-8:00 Trade Show Open 6-7:00 Dinner – Sponsored by KDDC and SUDIA/ADA of Kentucky

Peter Sook with Vi-Cor, Udder Health and Udder Dissection

Wednesday, February 26th (All Times are Central Time) 8:00

Registration Opens & View Exhibits

8:45

Welcome

9:00

SUDIA/ADA Annual Meeting

9:35

Dr. Sam Leadley, Ph.D., P.A.C. – Getting Calves Started Off Right

10:40

Trevor DeVries - Ensuring Cows Eat the Right Ration

11:45-1:30 PM

Lunch & KDDC Annual Business Meeting – Trade Show Exhibits

1:30

Nate Jenson, DMI Director Producer Relations

2:00

Trevor DeVries - Using Knowledge of Feeding Behavior to Improve Feed Bunk Management

2:30

Farmer Panel- Raising Milk Making Forages

3:20

Wrap up and Door Prizes

Registration: $30/person at the door. KDDC will cover 2 registrations per KY farm.

Rooms are available at the Holiday Inn $97/night with the KY Dairy Partners group. Please contact the hotel directly at (270) 745-0088 to make your reservations.

November - December 2013 • KDDC • Page 8

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

November-December 2013 • KDDC • Page 9

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

A “One of a Kind” Dairyman

A Dynamic Initiative: KDDC MILK Program By: Maury Cox

T On December 11, 2013, Mr. Mark McCauley, a well-known Kentucky dairyman, passed away at his home in Cynthiana, KY. Mark was born in Harrison County on May 29, 1944 to the late Ernest Ford and Beth Muntz McCauley. He was a member at the Beaver Baptist Church and Cynthiana Elk’s Lodge #438. He is survived by special friends, Greg and Lucy Muntz, Donnie Fryman and Kassie Brannock and numerous cousins.

For any of you that knew Mark, you knew his smile, his great attitude, and his love for going to cow shows. He always traveled with Clay and Katie Muntz to the shows around KY. This year was the last junior show season for Katie and Mark helped make it one to remember. He journeyed around the state with Katie to district shows, county fairs and the KY State Fair. While at the KSF he also worked the SUDIA booth. He was hesitant to travel to Madison, WI to the World Dairy Expo, but he finally decided to go with a good friend, Billy Branstetter. Thank goodness he went, too. Katie won a class at the WDE with a Red & White Holstein Junior Calf and Mark was able to witness the win. He also ventured to the North American International Livestock Expo where he made his normal rounds through the barn making everyone laugh.

Mark will be remembered by many because he was truly a “one-of-akind” dairyman.

he Market Incentive Leadership for Kentucky, (MILK) Program is one of KDDC’s premier initiatives. There is no doubt the program has had an impact on KY dairy farmers by distributing over $4.1 million dollars since its beginning. We think it has done significantly more. In this article we will identify the program’s original goals and highlight some very interesting facts that have resulted from this dynamic program.

KDDC MILK Program goals are threefold: 1. Increase the amount of milk produced locally to decrease the cost to supply processors’ demand from out-of-state sources. (KY dairy farmers produce about 1.2 billion lbs. a year, while local processors use about 2.5 billion lbs.

Producing more in-state milk saves significant transportation cost and increases value of milk to all local farmers.)

2. Enhance KY dairy farmers’ competitiveness by producing higher quality milk. (In 2006, KY dairy farmers’ average Somatic Cell Counts hovered around 400,000 ml/1,000 for DHI herds while the national avg. was 288,000 ml/1,000.)

3. Empower KY producers by utilizing production and business records.

The information below was gleaned from the MILK Program records accumulated since 2007.

These facts are significant and the information surpasses even our best expectations.

• Enrolled 28 percent participation of all dairy farmers in the state. (215, as of Nov. 2013) • Over 48 percent of all milk produced in KY annually is represented in the program.

• More than 7,025 tanker loads (50,000 lbs. each) of milk over established producer base has been generated by MILK Program farmers since 2007. (Total of 351,267,216 lbs. of milk).

• Approximately $7 million in transportation cost savings to milk handlers by producing an additional 7,025 tanker loads of milk locally.

(Using Transportation Credit subsidies at $0.05/ cwt./mile/avg. load traveling 400 miles generates savings of $1,000 @ load.)

• Increased income of more than $66. 9 million to producers for additional milk over base. (Federal Milk Marketing Order 5 Mailbox Price avg. over period, $19.07/cwt.)

• Distributed over $4.1 million in total premiums directly to participating KY dairy farmers.

November - December 2013 • KDDC • Page 10

• Instrumental in lowering SCC of KY produced milk to 251,000 ml/1,000 by utilizing regional dairy consultants in collaboration with University of KY Dairy Extension. This ranks KY second in the Southeast U.S. in milk quality.

• Every producer must have six DHI test a year and one per quarter to receive premiums.

• Financial business records calculating Cost of Production must be done by an accountant.

The KDDC MILK Program has had an economic impact on dairy farmers, their communities and the state; but how much?

When combining the $4.1 million in quality premiums with the $66.9 million dollars from additional milk produced by program participants, the total is over $71 million to KY dairy farmers. Using KY’s 5.8 percent marginal tax rate the $71 million would then generate over $4.1 million in new tax revenues. Given that the Kentucky Agricultural Development Fund Board invested $2 million in the program, a 100 percent return on investment was an excellent business decision. The milk handlers’ $2 million matching investment returned even more with savings of over $7 million in transportation cost and increased quality milk. The total return is win-win for all stakeholders.

There is one more statistic which stands out from the program. Most dairy farmers usually do business with folks in their local communities.

This has an economic multiplying effect in those communities. Taken from the U.S. Markets and Outlook, May 2004 publication by Robert Cryan, an economic multiplier is a measure of the larger effect that a change in economic activity (like a factory closing or a new farm) has on the regional economy. According to the USDA/NASS; Bureau of Economic Analysis the economic output multiplier for dairy in KY is 2.5617. Using this output multiplier the total economic impact of the new or additional pounds of milk generated by the KDDC MILK Program would be $182,125,911.00. Wow! Is the KDDC MILK Program making a difference? Not only is it making a difference, it is returning big dividends for the KY milk handlers and economy. It has increased KY dairy farmers’ profitability and helped them produce a more competitive, high quality product. We thank the KADF and all KY milk handlers for making this unique program possible. We look forward to another successful year in 2014. Interested in signing up for the program? Contact 859-5161129 and start receiving premiums in 2014.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Milk Prices FMMO 5

www.malouisville.com November 2013 Class I Advanced Price (@ 3.5% BF) $23.60 December 2013 Class I Advanced Price (@ 3.5% BF) $23.77

FMMO 7 www.fmmatlanta.com

Dixie Dairy Report Calvin Covington, ccovington5@cs.com, 336-766-7191

December 2013

Prices continue to move upward. The December Class I Mover was $20.37/cwt., the highest price in 2013. The Mover is projected to stay above $20.00 through next April. Nonfat dry milk powder continues to be the driving force behind higher prices. Back in March, the NASS monthly nonfat dry milk powder was $1.52/lb. Since then the price has increased almost $0.40/lb. and is now over $1.90/lb.

Strong exports, lower than anticipated milk production increases, and strong third quarter commercial disappearance are other reasons for higher prices. U.S. powder exports in October were 36% higher than last October. October milk fat exports were almost six times the amount exported a year ago, and cheese exports were 40% higher than last October. October milk production was only up 1% compared to a year ago. Commercial disappearance of all dairy products is improving. Third quarter disappearance was up 5.2% compared to the third quarter a year ago. This is a significant improvement from the first two quarters of the year. Increased retail promotions, especially for cheese, are a major factor in improved domestic sales.

November 2013 Class I Advanced Price (@ 3.5% BF) $24.00

2014 southeast federal order blend prices now projected higher than December 2013 2013. We project southeast federal Class I Advanced Price order blend prices for next year to be (@ 3.5% BF) $0.25-$0.50/cwt. higher than 2013. $24.17 Our 2014 projections continue to show the highest prices during the first quarter of the year, then declining the remainder of the year. High prices and lower feed prices will eventually result in milk supply exceeding demand, thus moving prices downward.

Farmer’s share of the retail dairy price. As seen in the table below, the farmer’s share of the retail price increases when farm prices increase and decreases when farm prices decline. This is expected in that retailers attempt to lessen price variation. The farmer’s share of the retail cheddar price is lower than whole milk due to cheese byproducts (whey), additional packaging and manufacturing costs, and longer time required to get the finished product from farm to store.

Best wishes for a blessed Christmas and New Year.

November-December 2013 • KDDC • Page 11

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Rooted in Tradition, Grown with Care, Spencer County FFA Racks up State, National Honors

By Tim Thornberry, KyForward Correspondent Thornberry is a freelance writer and photographer who has covered Kentucky agricultural and rural issues for various publications since 1995.

S

pencer County, just outside Louisville, is a typical rural area known more for being the home of Taylorsville Lake than just about anything else. With one exception, that is: the local Future Farmers of America chapter. Although the chapter hails from one of the smaller school districts in the state, its members are doing things on a big scale – and garnering some national recognition in the process.

For starters, Spencer County FFA teams that took home first-place awards in the Dairy Cattle Evaluation and Farm Business Management Career Development events held at this year’s National FFA Convention.

And this wasn’t the first time they have accomplished top honors on the national level. In addition, this year marked the fourth time since 2006 that Spencer County has placed first in the national dairy judging competition.

For the past 37 years Bland Baird has been involved in agriculture education and serves as FFA adviser for Spencer County FFA. He said the winning teams have really worked hard. (In the case of the Dairy Cattle Evaluation team, the top two individual awards also went to a couple of the team members.) “There is a lot of tradition here, and we get most of the kids that have a farming background and most of the higher academic kids in our program,” he said. “I think parents want their children in FFA because of the positive role model of the other kids.”

A prime example of how getting an early start can pay off later is evident in this year’s dairy judging team, none of whom had

November-December 2013 • KDDC • Page 12

a dairy background, according to Baird. All four also happen to have teachers as parents. All of Baird’s dairy judging teams are also in 4-H, and this same team placed fifth at the National 4-H contest. Baird also credits George Heersche and Larissa Tucker part of the University of Kentucky College of Agriculture, Food and Environment Dairy Extension Team with helping to get the students ready to compete. Both also work with the state 4-H dairy program. He said he could not do it without them.

Next on the horizon for the dairy team is raising funds for a trip to Scotland to participate in the international dairy judging contest.

The members need to raise about $25,000. “This will be our fourth time in this competition,” said Baird. “The top three FFA teams, the top three 4-H teams, the top three collegiate and the top three junior college teams will go.” The competition will not take place until June but the money, for the most part, has to be raised by February. “It takes a lot of money to do something like that but we’re hoping people that do business with dairy farmers will help us out a lot,” said Baird. In addition to help from the community, Baird said there will be several fund-raisers to help, as well.

According to information from Kentucky FFA, members of the Dairy Cattle Evaluation team, coached by Baird, included Tyler Goodlett, Caleb Fulkerson, Andrew Krueger and Shelby West. Tyler Goodlett was the overall high individual in Dairy Evaluation, Caleb Fulkerson placed second, Shelby West placed sixth and Andrew Krueger received a gold rating.

Members of the national champion Farm Business Management Team included Jacob Barnett, Daniel Cooper, James Nichols, and Rachel Sibert. James Nichols was the second high individual in the CDE, Jacob Barnett was the third high indivudial, Daniel Cooper was the fourth high individual and Rachel Sibert was the seventh high individual. The team was coached by Spencer County FFA Adviser Darryl Matherly.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Got Scheduled Maintenance - Part 2 Submitted by Josh Kemp of Dairy Express Services and GEA Farm Services Scheduled Maintenance and Parlor Performance ilk quality is not the only concern associated with poor milking equipment maintenance. Overused or worn components that are not regularly serviced can reduce milking speed and even stop machine operation. This can increase labor costs, add stress to cows (reducing production), elevate energy costs, and increase emergency service call costs.

Some of the common problems that lead to reduced parlor throughput, due to a poor maintenance program are: • Prolonged milking times due to improper vacuum levels and excessive fluctuations (which also make unit adjustments more difficult).

• Reduced milk flow due to teat-end congestion, caused by poor pulsation.

•Milking interruptions due to milk pump failures that cause the receiver and sanitary trap to overflow.

• Milking unit kick-offs as a result of poor equipment settings.

• Excessive wear of components that stop working, causing interruptions in the system’s operation.

All of these examples and more can be prevented through a good scheduled maintenance program – keeping throughput goals and

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parlor performance at optimal levels.

Scheduled Maintenance and Cow Health Correctly designed, sized, operated and maintained milking equipment will help to keep milk quality at optimal levels. However, malfunctions in the milking system, like defective pulsation or excessive vacuum fluctuations, can represent a significant impact on udder health.

And, even though high SCCs can represent lost milk quality bonuses, mastitis will affect profitability in several other ways.

Losses in lifetime milk production, reduction in pregnancy rates, cull cows, treatment costs, and discarded milk, can have an even stronger impact on profitability.

A regular scheduled maintenance program can help protect cow health by checking important components directly related with milk quality and the incidence of clinical mastitis. The results of the performed tests can be compared to industry standards and operating parameters, and potential problems can be detected at an earlier stage, preventing more major, long-term issues.

• Measure Vacuum System Performance Parameters Vacuum fluctuations are a result of unplanned air admittance into the milking system that could not be compensated by the vacuum pump. It can happen even with well-sized milking systems as vacuum pumps age, require service, or when the pump’s capacity is being occupied due to air leakage compensation in a different Cont’d on page 16

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November-Decemberd 2013 • KDDC • Page 13

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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Going the Extra Milking

By Meredith Scales

W

e have all heard the saying, “going the extra mile”; well a group of dairy producers in Adair County decided to go with the extra milking. Last winter several producers went to three times a day milking. After almost a full year into the program, we thought it would be good to ask some basic questions on how it has affected their operation.

The following are the five producers that began three times a day milking: Billy and Freddie Rowe - Rowe Farms Inc.; David Hutchison - Hutchison Dairy; Marshall Irvine - Irvine Dairy; Randall and Chad Burton – R and C Dairy; and Jonathan and Jessica Gaskins – Gaskins Dairy.

Question 1: Why did you decide to change to 3X milking?

Rowe Farms Inc. – We wanted to utilize the labor we already had more efficiently.

Hutchison Dairy – I wanted to get more production per cow, while being easier on cows and lowering the SCC. Irvine Dairy – I wanted to make it better on my cows by relieving stress on udders.

R and C Dairy – We wanted to increase production while relieving stress on the cows.

Gaskins Dairy – We decided to go to 3X a day because we were looking for a way to lower the herds SCC and increase production.

Question 2: What has been the biggest challenge with 3X milking?

Rowe Farms Inc. – Our biggest challenge has been keeping labor spots filled when an employee or a family member is sick.

Hutchison Dairy – My biggest challenge has been keeping employees in place.

Irvine Dairy – I have struggled with keeping hired help.

R and C Dairy – One of our biggest hurdles has been making sure the cows are grouped so that they do not spend too much time in the holding pen. The cows need ample time at feed bunk and to rest.

Gaskins Dairy – The biggest challenge we have faced with 3X milking is the labor.

Question 3: How much production have you gained?

Rowe Farms Inc. – Our rolling herd average (RHA) has increased 5,000 pounds in the first 10 months of 2013.

Hutchison Dairy – My RHA has increased about 4,000 pounds in the last 11 months.

Irvine Dairy – My RHA has gone up over 2,500 pounds in the first 10 months.

R and C Dairy – Our RHA has gone from 19,000 to close to 24,000 since we went to 3X milking.

Gaskins Dairy – Overall we have gained 10 percent more milk. We noticed in the first two weeks, the cows gained about 7 percent in production and within the following two weeks we saw about 3 percent more.

Question 4: Has your somatic cell count changed?

Rowe Farms Inc. – Our SCC changed very little. We started at 200,000 and are still averaging 200,000.

Hutchison Dairy – My SCC has dropped about 100,000 since we began 3X milking.

Irvine Dairy – My SCC has decreased about 150,000 since beginning the 3X milking.

R and C Dairy – We were not getting the SCC premium before 3X milking. Now we get it every month.

Gaskins Dairy – Our SCC has dropped 50,000. It only took one month to see a difference.

Question 5: What has been the best outcome from milking 3X? Rowe Farms Inc. – We have better utilization of our labor force and healthier cows.

Hutchison Dairy – I am achieving more milk per cow and less stress.

Irvine Dairy – I can tell the cows are doing much better.

R and C Dairy – It is the best thing I have ever done milking. We sell on average 2,000 more pounds a day which is equivalent to $400 more in income per day.

There are additional expenses with 3X milking, but the increase in income more than covers them.

Gaskins Dairy – For us, the 10 percent more milk and the SCC being lowered by 50,000 has helped more than anything. We started consistently receiving the $0.20/cwt quality bonus. So even with all the extra labor, utilities, etc., the gain in milk still outweighs all of that.

I can remember talking to producers last January and some were very skeptical of the 3X milking. Some thought it wouldn’t last very long in this area. Or maybe some thought the farms weren’t large enough to benefit from 3X milking. There are numerous decisions to make when considering 3X milking. Do your research. Talk to someone who has undergone the process. Three times a day milking may not be for everyone; however this group of producers has found it very beneficial for them.

November-December 2013 • KDDC • Page 14

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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund Cont’d from page 13 component of the system. By checking vacuum pump capacity and effective reserve (based on NMC guidelines) during scheduled maintenance, the technician will be able to identify causes and recommend solutions to prevent long-term effects of the vacuum system on udder health.

HAVE YOU HERD?

What’s Happening in Kentucky… 

Chaney’s Milk is now on the shelf at 3 Bowling Green Kroger locations. This is 100% Jersey and KY Proud milk.



Amanda Coomer and Allen Hood got married!



KY lost a “One of a Kind” dairy farmer, Mark McCauley, on December 11. He will be missed by so many.



Gary Rock is now practicing how to walk with prosthetic legs. His benefit in November raised over $50,000 to aid him on his road to recovery.



Frosted Sieg Wammy ET was Supreme Champion Cow at the NAILE. She is owned by Sparrows of Fairdale Farm, LLC, Owenton, KY.



The Spencer Co. FFA Chapter won the National FFA Dairy Judging Competition again. Four out of the past six years.



Ellie and Dustin Waggoner (and Sadie), of LeCows Dairy are expecting twins!

November-December 2013 • KDDC • Page 16

• Setting the Operating Vacuum According to the NMC, “An average claw vacuum between 10.5”Hg to 12.5”Hg (35 and 42 KPa) during the peak flow period is generally considered a good compromise to allow cows to be milked gently, quickly and completely.” After the adequate vacuum level is determined to operate the installation and milk the cows, it will be the vacuum regulator’s function to keep levels within the desired settings. A scheduled maintenance program will check the vacuum gauge accuracy, evaluate its performance, and service the controller to avoid changes in original settings due to overuse and component wear.

•Measuring Pulsation Performance The pulsation system is a key component of the milking system.

Thanks to pulsation, vacuum can be applied to teats and create the pressure gradient needed to extract the milk safely from the udder. The pulsation system is responsible for the correct application of suction (or vacuum) and massage to the teat end.

The pulsation system’s performance can be affected in several ways, from dirty air filters to defective components. Potential problems with the pulsation system can be detected by checking the pulsators’ performance with the Tri-Scan during scheduled maintenance. Parts that wear-out and filters should be replaced, and pulsators cleaned internally for continued optimal function, and optimal udder heath.

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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

Keep Calves Growing This Winter Reprinted with permission, Farm Journal Media, Inc.

By Jim Linn- a dairy nutrition consultant and retired Extension nutrition specialist at the University of Minnesota–St. Paul. ike Van Amburgh at Cornell University reports that calves born in winter produce about 1,200 lb. less milk during their first lactation than calves born at temperatures of 60° to 75°F. Several factors cause this, but reduced gain during winter months is a major reason. His research shows for every 1 lb. of daily gain prior to weaning, heifers will produce 937 lb. more milk during first lactation.

Cold stress in calves starts at 50°F. For every 1° drop in temperature below 50°F, a calf requires 1% more energy. Growth rate decreases about 0.2 lb. per day for every 10°F drop in temperature from 50°F. At 30°, a calf needs 30% more energy (calories) for maintenance and growth than at a more moderate 50°F. For calves under 3 weeks of age, the extra energy needed in cold weather will have to come through feeding additional amounts of milk replacer, pasteurized milk or adding a fat supplement to the liquid diet.

(See the milk replacer table.) For calves 3 weeks and older, additional energy intake should come from starter and the increase in milk or milk replacer.

The best way to increase the amount of milk replacer or milk fed in winter is to add a third feeding. If the feeding is from milk replacer, the third feeding is mixed the same as the other two feedings. Don’t

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just increase the amount of milk replacer powder or solids in the same volume of water used for two feedings. Such a high level of solids can cause scours. A good guideline is not to exceed 15% solids in liquids fed to calves, whether from milk replacer or supplemented pasteurized milk.

How you mix milk replacer and water can have a significant effect on solids content of the final mix. As an example, if you add 10 oz. of milk replacer on top of 2 qts. of water, the solids content will be about 13.1%.

If you add milk replacer first and then add water to make a 2-qt. mix, the milk replacer displaces some of the water, and the final solids mix will be about 15.2%. When adding 2 oz. more milk replacer (12 oz. total) and then adding water to make exactly 2 qts., the solids content increases to 18.2%.

The importance of getting calves to eat starter to maintain growth during cold weather is illustrated in the daily gain table. Milk is used in the example, but the same principle holds for using milk replacer. Below 0°F, milk alone supports no growth, but with 0.5 lb. of starter intake, calves will consume enough energy for some growth. In addition, the body heat produced from the digestion of solid feed will help the calf feel warmer than consuming only liquids.

Keep your calves growing this winter by getting them off to a good start with adequate amounts of high-quality colostrum right after birth. Follow with extra energy through the liquid diet for young calves and then starter in older calves up to weaning. For your herd’s future, it is important to keep calves healthy and growing during all months of the year.

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund

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November - December 2013 • KDDC • Page 19

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2013-14 Dairy Calendar of Events December December 27

KDDC Board Meeting - T.B.A.

January January 13-15

January 15 January 17

January 21-22 January 24

January 28

February February 4

40th Southern Dairy Conference, Atlanta, Georgia Prairie Farms Inc. Annual Mtg. Somerset, KY KDDC Board Meeting, Cattleman’s Assn.

Lexington, KY Nutrient Management Mtg. Bowling Green, KY University of KY Milk Handers Board Mtg. Lexington, KY Center of Kentucky Short Course - Feed Efficiency - Green Co. Extension Office - 10:00 A.M. Central Time

February 4

February 6 February

February February February

KY Proud Legislative Breakfast, Capital Annex Cafeteria, Frankfort Kentucky State University 3rd Annual Legislative Reception - Frankfort, KY 6-8 P.M. 13 Center of Kentucky Short Course - On Farm Milk Culturing- Taylor Co. Extension Office- 10:00 A. M. Central Time 22 KY Holstein Cattle Club Annual Meeting @ Noon- Harrodsburg 25-26 Young Dairy Producer Conference - Bowling Green, KY 25-26 KY Dairy Partners Meeting and Industry Trade Show Sloan Convention Center, Bowling Green, KY

March March 11-13

KYFarmStart Short Course, U of KY, Coldsteam Dairy

April Center of Kentucky Short Course – Getting the April 4-5 Most out of P C Dart- Adair Co. Extension Office- 10:00 A.M. Central Time

Milk Matters November - December 2013

Kentucky National Dairy Shows & Sales - Louisville, KY