Mayjune2015

KENTUCKY

May - June 2015 w w w. k y d a i r y. o r g

Milk Matters Dairy Market Update

Find out more on page 6

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The first step to managing heat stress More info on page 8

Make plans to attend Dairy Night at the Ballpark Find out more on page 13

June is Dairy Month Proclamation by Steven L. Beshear Governor of the Commonwealth of Kentucky To all to whom these presents shall come: WHEREAS, Milk is the official beverage of Kentucky; and WHEREAS, Kentucky has more than 63,000 milking cows, producing more than 115 million gallons of milk on Kentucky farms; and WHEREAS, Kentucky dairy producers and products are a vital part of Kentucky’s economy, with cash receipts from milk sales in 2014 totaling more than $229 million; and WHEREAS, Kentucky has seven commercial milk processing plants, three commercial cheese manufacturing plants, a specialty ice cream plant, an on-farm milk bottling plant and six on-farm cheese makers across the Commonwealth; and WHEREAS, Milk and dairy foods are packed with nine essential vitamins and minerals including L to R: Terry Rowlett (Henry Co dairy farmer/KY Farm Bureau Dairy Advisory), calcium, potassium, riboflavin, phosphorus, vitamins Beth Jones Cox (KDDC/Marion Co dairy farmer), Bill McCloskey (GOAP), Jennifer Hickerson (KDDC/Fleming Co dairy farmer), Fran McCall (Ky Farm Bureau), Eunice A, D and B12 and protein; and WHEREAS, Since 1939, June has traditiaonally Schlappi (Ky Dept of Ag), Meredith Scales (KDDC), Billy Rowe (Adair Co Dairy been designated as national “Dairy Month” in honor farmer/ADA of Ky), Denise Jones (SUDIA), Kristen Branscum (Ky Dept of Ag), of the contributions made by dairy farmers and their Maury Cox (KDDC Exec Dir)Sliker, both in the sales force. families who work hard every day to provide fresh, wholesome milk and milk products for all to enjoy; and WHEREAS, The Kentucky Dairy Development Council, the Kentucky Department of Agriculture, the Southeast United Dairy Industry Association and our roughly 715 dairy producers encourage Kentuckians to join with them in enjoying dairy products during the month of June; NOW, THEREFORE, I, STEVEN L. BESHEAR, Governor of the Commonwealth of Kentucky, do hereby proclaim June 2015 as DAIRY MONTH in Kentucky, and urge all to support the dairy industry and salute Kentckys dairy farmers.

DONE AT THE CAPITOL, in the city of Frankfort, the 1st day of June, in the year of our Lord, two thousantd fifteen and in the 224th year of the Commonwealth.

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

2015 KDDC Board of Directors & Staff Executive Committee

President’s Corner Richard Sparrow

President: Richard Sparrow Vice President: Charles Townsend, DVM Sec./Treasurer: Tom Hastings EC Member: Tony Cowherd EC Past President: Bob Klingenfus

M

any years ago, I took a class at the University of Kentucky called the Principles of Animal Husbandry.

Husbandry, defined as manager of animal resources or interested in an animal’s well-being, is at the heart of a dairy farmer’s work.

Board of Directors District 1: Lesa Elliot Clark 270.210.3743 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: Todd Burgess 270.427.6403 District 7: Larry Baxter 859.612.2738 District 8: Jerry Gentry 606-875-2526 District 9: Robert List 606.748.2944 District 10: Richard Sparrow 502.370.6730 District 11: Bill Mattingly 270.699.1701 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 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 2015 • KDDC • Page 2

This spring we had a couple of very sick milk cows that eventually died. It was a very sad time for us. This sadness went way beyond the loss of dollars for milk produced. If you are around your cows every day, feeding and milking them, you can’t help but develop a relationship with them. We try to care for our cows to the best of our ability, and call in the veterinarian to help. However, when we lose one, it feels like we have failed.

We try to get to the bottom of things, sometimes taking them to the diagnostic lab, or talking with the vet. And, if we find the source of the problem, we apply that knowledge to our future practices.

Today as dair y farmers, we hear a lot about animal welfare. Our industry leaders stress: processors, retailers, and consumers want to know more about their food. I believe this is a very good thing. We need to let consumers know more about our work and understand that dairy farmers use science-based technology to keep their cows healthy and comfortable. Not only because healthy cows are most profitable, but also because of our care and concern for our cows.

As a part of June dairy month, we all need to be advocates for our work and take advantage of every opportunity to tell our story. Spread the word and spread the butter!

New IRS Tax Regulations to Impact Dairy Farmers in 2015 From: Progressive Dairymen Changes in federal tax regulations will impact how dairy farmers deduct repairs and maintenance.

Does your CPA know about these changes?

In the past, it was unclear as to what constituted a repair expense and what should be capitalized.

The new regulations issued in January of 2014 eliminate confusion and can actually allow taxpayers to deduct significant expenditures as repair and maintenance expenses.

The average cost of mastitis is about $184 per cow per year Organic minerals have been proven to be more readily available for the animal’s needs than inorganic.

Through increased availability of organic minerals in a dairy cow’s diet, the function of the white blood cells in the udder is optimized, allowing them to more effectively deal with mastitis-causing bacteria.

5.7% 4.1%

Treatment ($7.36)

Discarded Milk ($10.45)

22.1%

66%

Replacements ($41.73)

Lost Milk ($121.00)

1.5% Veterinary ($2.72)

0.1% Labor ($1.14)

Source: Current Concepts of Bovine Mastitis.

The National Mastitis Council (NMC), 1996.

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

Executive Director Comments Maury Cox Celebrating June Dairy Month

J

une is “Dairy Month” across the nation and here in Kentucky on June 1, 2015, Governor Steve Beshear had several folks into his office from the dairy industry to officially sign the Proclamation of June as Dairy Month in KY. The Governor expressed appreciation for the hard-working dairy farm families across the Commonwealth that continues to contribute and grow Kentucky’s economy.

Most of us involved in dairy have an ongoing passion throughout the year for the industry and all that it encompasses. To some of us ole diehards it doesn’t matter what month it is; being around dairy cows and the folks that earn their living caring for them is special. It is a privilege to be a part of an industry that provides one of nature’s most nutritious and wholesome foods for the world while often allowing families the opportunity to work together for common goals. It is a place where youngsters can learn about life, hard work, leadership and develop a deep respect for animals in their care and the land that provides their family a living.

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But the dairy industry is more, much more than the farm life alone.

It all starts there, but as we all know many more folks are involved in the process of putting those delicious, healthy products on the grocery shelves and not just that, but providing the supportive supplies, equipment, technologies and expertise from producing the raw product to placing it on grocery shelves or incorporating it in the foods we consume.

According to the USDA KY dairy farmers received $257.1 million in cash receipts from the sale of milk in 2014. Although the milk prices were at an all-time high during the year, the true economic impact dairy has on Kentucky’s economy is much, much more. A report in U.S. Dairy Markets and Outlook, May 2004, Dairy Management Inc., Roger Cryan, list economic multipliers for different sectors of the industry.

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. The farm sector multiplier for KY is 2.5617. The cash receipts are then multiplied by 2.5617 to determine the impact from this sector, which is $658.61 million. We start to see more of a realistic picture of dairy’s true economic impact on KY communities by incorporating economic multipliers in the equation. This number still doesn’t take into consideration the impact processing has or all the jobs the industry generates.

We need to make sure we as an industry don’t sell ourselves short.

When a dairy farm sells out it has a much larger effect on a community than many think. We must take the time to tell our story from all sectors of this industry. Yes, June is Dairy Month, but every single day of the year is Dairy Day.

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

Kentucky

2015 Dairy Fact Sheet There were an estimated 63,000 milk cows living on 720 dairy farms in Kentucky in 2014.

Each dairy cow in Kentucky provided an average of 1,849 gallons of milk.

Total amounts of milk produced in the state amounted to 116.5 million gallons, or 1

billion pounds, of milk.

93% of all milk produced in 2014 was used and consumed in the form of fluid milk.

Cash receipts for the sale of milk by dairy farmers amounted to $257.1 million.

A Kentucky dairy cow produced an average of 6.1 gallons of milk per day, or enough to make 5.2 pounds of cheese or 2.5 pounds of butter. A typical cow consumes about 100 pounds of feed daily, which is a combination of hay, grain, silage and proteins, plus vitamins and minerals and drinks nearly 40 gallons of water.

The average value of a day’s milk was about $13.38 per cow.

In 2014, a dairy cow in Kentucky cost about $1,780 per head. A Kentucky dairy farm typically has a herd of about 88 milking cows.

Kentucky had six commercial milk processing plants located in Fulton Louisville, London,

Murray, Somerset and Winchester. Kentucky also had three commercial cheese manufacturing plants and one specialty ice cream plant.

Kentucky ranked 27th in milk production, 26th in number of milk cows, 42nd in milk output per cow and 12th in the number of licensed dairy operations in the United States.

Top six milk producing counties during 2014: 1st - Logan (104.1 million pounds) 2nd - Barren (97.2 million pounds) 3rd - Adair (75.8 million pounds) 4th - Metcalfe (62.7 million pounds) 5th - Warren (61.5 million pounds) 6th - Christian (58.8 million pounds)

May - June 2015 • KDDC • Page 5

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

Dairy Market Update Kenny Burdine June 1, 2015

D

airy markets change quickly and the last 8 months have been a vivid illustration of this concept. The US All Milk price for September 2014 was $25.70.

As I write this article, the most recent US All Milk price (April 2015) was $16.50. Figure 1 below show US All Milk price from January 2009 to April 2015. Note the 35% decrease in milk price from last fall to this spring was one of the most dramatic that we have seen.

US All Milk Price (2009-2015)

Data Source: Understanding Dairy Markets Website: http://future.aae.wisc.edu/

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Much of the decrease in milk prices can be attributed to the usual suspects. Both cheese and butter prices dropped considerably from fall into winter, although both have seemed to find some support since the first of the year. Whey prices reached a peak in late summer of 2014 and have steadily declined since then. The non-fat dry milk price has really been dropping since early in 2014 and is down roughly 50% from where it was one year ago.

On the cost side, decreasing feed prices are offsetting some of the impact from lower milk prices. USDA’s current projections are for milk production to increase in 2015, with most of the increase coming in the second half of the year. Both USDA forecasts and CME© Milk Futures suggest slightly stronger milk prices in the third and fourth quarter. The combination of slightly higher milk and lower feed prices should work to improve margins over the next few months.

Margins have been increasingly important given the recent changes in dairy policy. Last fall brought the first round of signups for the new Margin Protection Program for Dairy (MPP-Dairy) established in the 2014 Farm Bill. Producers signed up for coverage for the last four months of 2014 and the calendar year 2015. Producers were given the opportunity to enroll in the program, which protected an estimated margin, milk price minus feed costs, based on monthly prices for US All Milk, Corn, Soybean Meal, and Alfalfa Hay. Additional details

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KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund on the MPP-Dairy program can be found in the publication AEC 2014-15, “The Margin Protection Program for Dairy in the 2014 Farm Bill” available at: www.uky.edu/ag/agecon/ pubs/ext2014-15.pdf. The chart below shows the calculated MPP-Dairy margin since January 2009. While the program did not exist until fall 2014, the chart is intended to provide some historical perspective on what this margin has looked like over time.

MPP-Dairy Margin (2009-2015)

Data Source: Understanding http://future.aae.wisc.edu/

Dairy

Markets

Website:

The MPP-Dairy program offers producers the opportunity to cover margin in a range of $4 to $8 per cwt. This margin is based

on a fixed calculation and is not subject to modification by the producer. Dairy producers will be offered an opportunity to sign up for this program again during July, August, and September of 2015. That signup period will be for the 2016 calendar year. Producers who did not enroll last year can still enroll for 2016. Further, producers who enrolled last year will need to choose their coverage levels and coverage percentages for 2016.

I think it is important to put the current market in perspective as we think about the next signup period. During initial signup last year, margins were well above the $8 level.

However, they quickly dropped throughout the fall and winter as US All Milk prices fell. It is very likely that the MPP-Dairy margin during the upcoming signup period will be much lower than what was seen during the first signup period. MPPDairy margin for the March / April 2015 couplet was $7.50, meaning payments will be received by those who chose the $8 coverage level. So, producers who chose not to enroll last year may want to give the MPP-Dairy program another look. This will be especially true for those who chose to use LGM-Dairy, rather than MPP-Dairy last year as the available margins through LGM-Dairy will be lower given the current market.

At the same time, producers who did enroll in MPP-Dairy last year may determine that they would like to select a higher level of coverage than they chose the first time. We will spend more time discussing the MPP-Dairy decision for the 2016 calendar year in the next issue of Dairy Notes.

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May - June 2015 • KDDC • Page 7

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

The first step to managing heat stress: remember that natural ventilation is free

By Jeffrey Bewley Historically, dairy barns were constructed like houses striving to keep barns closed in to protect cows from winter weather. In doing so, we may have lost sight of the fact that cows have a different thermoneutral zone (the temperature range in which they are comfortable) than people. Cows are much more cold tolerant than we are and much less heat tolerant than we are. Of course, even in the Southeast, we experience winter days where cold stress is a concern. However, in Kentucky, the number of days where cows experience heat stress is much higher than the number of days where cows experience cold stress. Cows begin to experience heat stress when the temperature humidity index (THI) exceeds 68. We looked at historical temperature data from nine different weather stations in Kentucky. While the average number of days where the THI exceeds this level varies

from 110 to 140 days within the state, the state wide average was 125 days where heat stress would be a concern. Perhaps more surprisingly, these locations averaged at least one day with heat stress conditions in every month of the year except December and January. Yes, that means heat stress can be an issue even in February, March, October, and November. The take home message from this information is that dairy barns in Kentucky should be built or renovated to help cows deal with heat stress first with consideration of cold stress second.

During warmer temperatures, poor ventilation may result in cows expressing obvious signs of heat stress (i.e. breathing heavily, panting). Research has illustrated that average lying time decreased from 10.9 to 7.9 hours per day as temperature increased. Thus, even stall usage may be altered if barns are inadequately ventilated. When temperatures are cooler, poor ventilation can result in increased respiratory problems and

Figure 3. Barns that are completely enclosed do not allow for adequate air exchange resulting in a damp, dark environment and can lead to heat stress, respiratory problems, and increased transmission of disease.

Figure 4. The ideal freestall barn maximizes natural ventilation with high, open sidewalls, a ridge vent opening and supplements natural ventilation with fans used to increase air flow and exchange.

May - June 2015 • KDDC • Page 8

KDDC is supported in part by a grant from the Kentucky Agricultural Development Fund transmission of other diseases. Lack of proper ventilation can lead to high moisture levels, manure gases, pathogens, and dust concentrations which create an adverse environment for dairy cows.

For optimal production and well-being, dairy cows should be provided with a constant supply of fresh, clean air. Frequently exchanging air removes or reduces the concentrations of dust, gases, odors, airborne disease organisms, and moisture.

Maximizing natural ventilation is the first step toward improving ventilation. Natural ventilation relies on barn openings and orientation to remove heat and humidity from the animal’s environment. Exhausted air generally leaves the barn through sidewalls and ridge openings. Although old barn designs suggested closed-in barns, current recommendations are to open the barns up to allow for better air exchange. Sidewalls allow for air, heat and humidity to be easily and continuously removed from the barn. This is particularly critical during the summer.

If producers are concerned about the potential negative effects of open sidewalls during the winter, sidewall curtains, which can be raised in the summer and lowered during the winter, may be added to eliminate this concern. A ridge opening should also be provided at the top of the building to facilitate air removal through the top of the barn. Warm, moist air rises and exits through the ridge opening even on calm days. The steeper the roof slope the better the movement of the warm moist air out of

the ridge vent. The roof slope should be at least 3/12, 3 inches of rise for every 12 inches of run. A slope of 4/12 is preferred.

The ridge opening should be at least 2 inches for each 10 feet of building width. With overshot roofs, this opening should be at least 3 inches per 10 feet of building width. Producers are often resistant to this change because of fears of precipitation entering the barn through the ridge opening. Although this is generally not a major problem, a ridge cap may be added to eliminate this concern.

For many older barns with ventilation issues, the main opportunity for improvement is removing tin or wood sidewalls that block natural winds from entering the barn. Before removing these obstructions, consider how this change might affect the structural integrity of the building. Strive for at least 10-12 feet of sidewall opening. A 3 to 4 foot overhang should be provided to prevent precipitation from entering the barn. Curtains may be needed to block adverse weather during the winter. Similarly, opening the endwalls may also prove beneficial. In some cases, there may be benefit in raising the height of the roof to increase the amount of air flowing through the sidewalls. Adding or increasing the size of the ridge opening can dramatically improve natural ventilation. Natural ventilation can also be supplemented with mechanical ventilation with the addition of fans. Adding fans to an existing freestall barn is one of the highest return investments a dairy producer can make.

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Milk production continues increase, milk production KDDC is supported in parttoby a grant but fromcow thenumbers Kentuckystabilizing.

AgriculturalApril Development Fund is up 1.7% compared to a year ago. Cow numbers are remaining around 9.3 million head which is about 65,000 head more than last April. Production keeps declining in California, but remains strong in the Midwest. April saw milk production down 2.1% in California and down 1.4% in New Mexico. Michigan continues to turn out the milk with production up 6.5%, Wisconsin was month of May at $1.85/lb. moved to $2.06/lb. by the Byup Calvin Covington a strong 4.0%, and Minnesota up 2.7%. In thethe Northeast, both New York and Pennsylvania middle of May, then retreated to $1.9125/lb. on June 4. continue to produce more milk than a year ago, with April production 1.9% and may 2.8%, Traders trying to protect up their positions be one reason June 2015 for butter’s volatility during strong the month. respectively. Looking at the Southeast, Florida milk production remains withApril Aprilsaw butter inventories increase 25% the running previous month, production 3.0% more than last April. plants east of thecompared Rockiestoare Milk production continues to increase, but cowManufacturing numbers and 23% higher than April a year ago. Growing inventories stabilizing.

April milk production 1.7% compared seven days a week to handle istheupadditional milk production.

Based various reports, surplus will hamper any major on increase in butter prices.

The May to a year ago. Cow numbers are remaining around 9.3 milk is priced $5-$7.00/cwt. below class, with some at $10.00/cwt. below class.

AMS nonfat dry milk powder price was $0.9464/lb. A year million head which is about 65,000 head more than

Dixie Dairy Report

ago powder was almost double the current price at $1.88/lb. last April. Production keeps declining in California, but Nothing on the horizon points to any significant increase in remains in the Midwest. saw milk production Dairystrong commodity prices.April Block cheddar at the CME advanced $0.13/lb. during May. Even powder prices. down 2.1% in California and down 1.4% in New Mexico. with cheese plants running seven days a week, product is moving.

Dairy Market News Higher blend prices projected for May. Wereports project May Michigan continues to turn out the milk with production blend stocking prices, in up the on three southeast federal orders,any $0.25unexpectedly strong demand for cheese.

With buyers cheese, do not expect up 6.5%, Wisconsin was up a strong 4.0%, and Minnesota $0.50/cwt. higher than April. Little change is projected in jump inNortheast, cheese prices in the future. CME butter began the month of May at $1.85/lb. upbig 2.7%.

In the both New Yorknear and Pennsylvania the June blend price compared to May. A $0.75-$1.00/cwt. continue to produce more milk than a year ago, with then Aprilretreated to $1.9125/lb. on June 4. Traders trying moved to $2.06/lb. by the middle of May, increase is projected for July, with blend prices increasing production up 1.9% and 2.8%, respectively. Looking at the through volatility the fall as shown to protect their positions may be one reason for butter’s duringbelow. the month. April saw Southeast, Florida milk production remains strong with Fluid milk sales continue down, but whole milk sales butter inventories increase 25% compared to the previous month, and 23% higher than April a up.

April production 3.0% more than last April.

Manufacturing For the first quarter of 2015 compared to the same quarter plants the Rockiesinventories are running will sevenhamper days a week yeareast ago.of Growing any major butter The May a year increase ago, total in fluid milk prices. sales are down 2.2%. AMS Breaking to handle the additional milk production. Based on various nonfat dry milk powder price was $0.9464/lb. A year powder almost double the current down ago the first quarterwas numbers shows the following: whole reports, surplus milk is priced $5-$7.00/cwt. below class, milk sales up 2.3%; lowfat (2%) milk sales down 7.6%; lowfat price at $1.88/lb.

Nothing on the horizon points to any significant increase in powder prices. with some at $10.00/cwt. below class.

(1%) milk sales up 7.6%; skim milk sales down 11.0%, and Dairy commodity prices. Block cheddar at the CME organic milk sales down 0.7%. Could 2% milk drinkers be advanced during May. Even with Higher$0.13/lb. blend prices projected for cheese May. plants We project blend in skim the three southeast movingMay up to wholeprices, milk and milk drinkers moving running seven days a week, product is moving. Dairy Market up Little to 1%? change Increasedis whole milk sales areJune one blend reason for federal orders, $0.25-$0.50/cwt. higher than April. projected in the News reports unexpectedly strong demand for cheese. With relatively strong butter cream available to churn. pricestocking compared May. doAnot $0.75-$1.00/cwt. increase is projected forprices, July,less with blend prices buyers up ontocheese, expect any big jump First quarter domestic and export sales. Comparing the in increasing cheese prices in the the nearfall future.

CME butter through as shown below.began

BLEND PRICES:THREE SOUTHEAST FEDERAL ORDERS (January-April actual) & (May-December projected) -2015

May - June 2015 • KDDC • Page 10

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

Milk Prices

Fluid milk sales continue down, but whole milk sales up. For the first quarter of 2015 compared to the same quarter a year ago, total fluid milk sales are down 2.2%. Breaking down the first quarter numbers shows the following: whole milk sales up 2.3%; lowfat (2%) milk sales down 7.6%; lowfat (1%) milk sales up 7.6%; skim milk sales down 11.0%, and organic milk sales down 0.7%. Could 2% milk drinkers be moving up to whole milk and skim milk drinkers moving up to 1%? Increased whole milk sales are one reason for relatively strong butter prices, less cream available to churn.

FMMO 5

www.malouisville.com May 2015 Class I Advanced Price (@ 3.5% BF) $19.23

First quarter domestic and export sales. Comparing the first quarter of 2015 to 2014, domestic sales for butter were up 8.4%. American cheese domestic sales were up 8.6% while the other cheese category (mainly Italian cheese) sales were down 1.2%. With the national pizza chains adding non-pizza items (Domino’s removed pizza from its name) Italian cheese demand could be slowing. Domestic sales of nonfat/skim milk powder were up a hefty 39.5%. A lower powder price increases the use of powder to fortify cheese vats and other domestic uses. Turning to exports, butter exports, for the first quarter of 2015, were almost 80% lower than the same period last year. American cheese exports were over 50% lower. The good news is that exports of other cheese exports were over first quarter of 2015 tomilk 2014, domestic sales for cheese and nonfat/skim powder were almost the butter same aswere a year American ago.

up 8.4%. American cheese domestic sales were up 8.6% while 50% lower. The good news is that the other cheese category (mainly Italian cheese) sales were exports of other cheese and nonfat/ Federal order Class in the southeast to 10non-pizza billion lbs. skim The chart shows, milk below powder were almost the down 1.2%.

With theI sales national pizza chains falls adding combined, the annual Classpizza I salesfrom of allits pool distributing in thesame threeassoutheast federal a year ago. items (Domino’s removed name) Italianplants cheese orders from 2000 2014. In 2000 total Class distribution by these plants wasorder 11.78Class billionI sales lbs. in the Federal demand could be to slowing.

Domestic sales of Inonfat/skim milk powder were up a hefty 39.5%.

A lower powder price increases southeast falls to 10 billion In 2014 Class I distribution declined to 10 billion lbs. The loss of 1.78 billion lbs. is due to fewer lbs. the of processing powder toplants fortify cheese vats (plant and other domestic chart below shows,and combined, milkusefluid in the southeast numbers down byThe 1/3 compared to 2000), the annual Class I sales of all pool uses.

Turning to exports, butter exports, for the first quarter of lower fluid milk consumption. The combination of lower sales and more milk production is 2015, were almost 80% lower than the same period last year. distributing plants in the three

June 2015 Class I Advanced Price (@ 3.5% BF) $19.54

FMMO 7 www.fmmatlanta.com May 2015 Class I Advanced Price (@ 3.5% BF) $19.63 June 2015 Class I Advanced Price (@ 3.5% BF) $19.94

slowing erasing the southeast fluid milk deficit.

COMBINED CLASS I SALES of POOL DISTRIBUTING PLANTS In the THREE SOUTHEAST FEDERAL ORDERS (2000-2014)

Source: Federal Milk Market Administrator data

southeast federal orders f rom 2000 to 2014. In 2000 total Class I distribution by these plants was 11.78 billion lbs. In 2014 Class I distribution declined to 10 billion lbs. The loss of 1.78 billion lbs. is due to fewer milk fluid processing plants in the southeast (plant numbers down by 1/3 compared to 2000), and lower fluid milk consumption.

The combination of lower sales and more milk production is slowing erasing the southeast fluid milk deficit.

A bit of trivia. A ranking of the top eleven (11) counties in the U.S. for number of beef cows shows four (4) of the top (11) counties are in Florida.

Okeechobee is ranked 4 th with 82,000 beef cows. Highlands is 6 th , Osceola and Polk counties are tied for 11 th.

A bit of trivia. A ranking of the top eleven (11) counties in the U.S. for number of beef cows shows four (4) of the top (11) counties are in Florida. Okeechobee is ranked 4th with 82,000 beef MayJune 2015 • KDDC • Page 11 th th cows. Highlands is 6 , Osceola and Polk counties are tied for 11 .

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

KDDC MILK Program By: Jennifer Hickerson

T

he MILK (Market Incentive Leadership for Kentucky) Program originating in 2007 has become a signature program for KDDC. The year 2014 was yet another success for the KDDC MILK Program. We closed the year out with 216 producers enrolled in the program. The program had sixteen new participants in 2014. The second quarter of the year marked the peak of the program with 124 producers qualifying for a payment from the program. There was an increase of 63,438,078 pounds of milk produced above the base level. Funds being disbursed for the 2014 program year came to a total of $1,152,025.30.

Each program that KDDC has developed has the potential to increase net income for local dairy farmers. The MILK Program has been the flagship program that has been simplest to quantify. Since its inception in 2007 through 2014, $5,633,450.25 has been directly paid to participating farmers. This is but a small part of the impact the program has created. To qualify for the incentive premiums a participating producer must increase milk production either 5 or 10 percent each month as compared to the average of the same months in the previous two years. The increase therefore is progressive. They also must meet quality standards in somatic cell counts and preliminary incubation counts listed below and utilize Dairy Herd Improvement Association production records. The maximum premium is $15,000 per farm per year. Those farms with increased production continue to be paid by their buyers for the additional milk over and above the capped program incentive amount. What’s more, since the farm must also meet the quality standards of the program, they typically qualify for additional premiums through their marketing organization or milk buyer.

As of the end of 2014 the cumulative total pounds of milk produced over the established bases of farmers participating in the program is

444,182,955 pounds. The mailbox price of milk, (the price the farmers receives including premiums less expenses such as check-off, hauling expenses, regulatory fees) according to the Appalachian Federal Milk Marketing Order Market Administrator averaged $20 per hundredweight for the years 2007 through 2014. Although some years more volume was produced than others using the following equation: $20 x (444,182,955/100) = $88,836,591; providing a picture of the financial impact of the program. Taking also into consideration the $5,633,450 direct incentive dollars producers received for qualifying for the program plus the revenue received from the sale of additional quality milk, net farm income increased by $94,470,016 for KY dairy farmers from the KDDC MILK Program.

The MILK Program requires producers to be enrolled in a DHIA program with a minimum of 6 qualifying tests in a rolling 12 month period. You must keep SCC average for the month below 300,000 and PIC is required to be below 20,000. Incentive premiums are earned on a monthly basis and paid quarterly from the marketing agency. For a five percent increase over base pounds the incentive payment would be $.50/cwt and a ten percent increase receives a $.75/cwt payment when all criteria are met for the program.

Not enrolled in the program? Contact your KDDC Consultant now to start cashing in on the possibilities.

Jennifer Hickerson-Northern 1-859-516-2458 j.hickersonkddc@gmail.com Beth Cox-Central 1-859-516-1619 Bethcoxkddc@gmail.com Dave Roberts-Western 1-859-516-1409 roberts@kydairy.org Meredith Scales-Southern 1-859-516-1966 mescales2@gmail.com

Dairy Today: April Dairy Production Margin Triggers Payment

From: Dairy Today’s Jim Dickrell

T

hough USDA has yet to post the official income over feed cost margin on its website, Dairy Farmers of America (DFA) has calculated the April margin at $7.50. Combined with the March margin of $7.48, that will trigger an indemnity of 49¢ for those who took full, $8 coverage of Margin Protection Insurance.

The average feed cost in April was $9.02/cwt and the all-milk price was $16.50. That left on IOFC margin of $7.4821. In March, the average feed cost was $9.07, and the all-milk price was $16.60, leaving a margin of $7.5262.

Dairy farmers participating in the Dairy Margin Protection

May - June 2015 • KDDC • Page 12

Program as part of the 2014 farm bill must make their final premium payments by Monday, June 1.

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

Bring your family to

“Dairy Night” at the Ballgames!

Thursday, June 25 7:05 p.m.

- 4 - free tickets per dairy farm family (tickets sponsored by Endovac/IMMVAC)

- 2 - free dairy t-shirts per dairy farm family

(t-shirts sponsored by SUDIA/ADA of Ky)

All other tickets are $7 & payable at the ballgames To order �ckets, contact: Eunice Schlappi at 502‐782‐4122 (leave message) or email at eunice.schlappi@ky.gov May - June 2015 • KDDC • Page 13

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

The School Milk Nutrition Act of 2015 Dairy Herd Management – Online, May 19,2015

A

s reported in Dairy Herd Management, Online, May, 19, 2015, a bipartisan bill to help reverse the decline of milk consumption in schools was introduced, May 19, by U.S. Reps.

G.T. Thompson (R-PA) and Joe Courtney (D-CT). The School Milk Nutrition Act of 2015 focuses on preserving milk’s role in school feeding programs, while complying with the most recent Dietary Guidelines for Americans (DGA).

The School Milk Nutrition Act of 2015 aims to increase milk consumption in schools by reaffirming the requirement that milk is offered with each school meal, consistent with current law and the DGA. The bill also aims to improve the variety and availability of milk served in schools through a new pilot program and research.

The Kentucky Milk Commission took the opportunity to make comments on this issue and to request the U.S. Senate Agriculture Committee to reinstate the offering of whole and two percent milk to our school age children. The request letter is below: Members of the Senate Agriculture Committee,

May - June 2015 • KDDC • Page 14

As the entity that represents all segments of Kentucky’s dairy industry, the Kentucky Milk Commission strongly encourages the Senate Agriculture Committee to re-establish whole and 2% milk in our schools to help our children grow strong, active, and healthy.

Studies show that milk consumption is going down while America’s population is going up. The Kentucky Milk Commission believes schools required serving only skim or 1% milk which lacks milk wholesome flavor results in this drop in consumption.

The survey below illustrates our point of the decline in milk at schools.

The Kentucky Milk Commission respectfully requests the committee while discussing school lunch nutritional guidelines to ask the question why milk consumption is declining in schools. Fresh milk has always been nature’s most perfect food especially for children. Please reinstate whole or 2% milk at schools.

Respectfully submitted, Kentucky Milk Commission 111 Corporate Drive Frankfort, KY 40601

00 Special $1,0 n rebate o wrapper & bale carrier

Anderson inline wrapper

Anderson 1400 bale wagon

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PENTA 5620 HD, Used, Call for details

Ag Central Co-op sells and services full lines of milking, hay, ventilation and manure equipment.

Hay Maxilator Acuumagrapple

Formed by the merger of

Artex Manure Spreader

GEA Houle Spreader

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

Dairy Facts

Dairy Fact Flavored milk contains Three: Dairy Fact One:

the same nine essential nutrients as white milk and is a nutritious alternative to soft drinks.

Studies show flavored milk drinkers choose to drink fewer soft drinks compared with those who do not drink flavored milk.

Dairy Fact Two:

Drinking low-fat or fatfree white or flavored milk helps you get the three daily servings of dairy recommended by the Dietary Guidelines for Americans. Seventy percent of girls and 60 percent of boys ages 6-11 do not meet the daily Calcium needs. Nearly 7 out of 10 teen boys do not meet their daily Calcium needs.

May - June 2015 • KDDC • Page 16

Milk provides vitamins and minerals essential for good health. Adding a small amount of sugar to nutrient-rich foods improves dairy nutrition without contributing excessive calories.

Dairy Fact Four:

Dairy foods are nutrient-rich and provide nine essential vitamins and minerals, including Calcium, Potassium, Phosphorus, Protein, Vitamins A, D, B12, Riboflavin and Niacin. Also, milk and other dairy foods provide 72 percent of the Calcium available in the U.S. food supply, making them a crucial component of a healthy diet.

Calcium is the most abundant mineral in the body and is necessary for many important biological functions to take place. Most calcium though is stored in the bones and teeth as a necessary part of their structure.

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

Connecting with Your Community Most Americans are three to four generations removed from agriculture. You can help to bridge this gap.

building consumers’ trust in dairy products, and boosting sales.

With today’s ‘‘instantaneous’’ media, consumers are bombarded with information and messages about agriculture and food. Terms like rBST, organic, GMOs, and antibiotics and their application in agriculture can be misunderstood or confusing to consumers.

Could you step up and share what you know to set the record straight?

When dairy farmers and their family members speak to local community groups and organizations, consumers get a better understanding of dairy farming, that leads to

Dairy Industry Association’s (SUDIA) Community Outreach Program, dairy farmers and their family members speak to local groups and organizations, such as: • • • • •

Rotary International Kiwanis Mom’s Clubs Boy Scouts of America Girl Scouts of America

•

YMCAs

Through the Community Outreach Program, dairy farmers and their families have reached over 8,300 consumers and have spoken to more than 1,750 groups.

Consumer research shows that dairy farmers are the most believable source of information about dairy products and dairy farming.

Farmers are the experts!

The Community Outreach Program puts a ‘‘face’’ on dairy farming and reaches neighbors, community leaders and current and future consumers, informing them about dairy farming and the dairy products available to them.

Through the Southeast United

We need more dairy farm families ------ producers, spouses, young adults and teens ------ to help share the dairy story with consumers.

How Does It Work?

•

The typical amount of speaking time with groups is 15 to 20 minutes.

•

•

------ Larry Kain, Noon Rotary Club,

Share Your Story

Community Outreach Program

Virginia dairy farmer Jennifer Cook does a milking demonstration at the Roanoke Boys and Girls Club.

‘‘I think we may have set a club record for the amount of questions and answers and the time spent after the program talking to dairy farmer Milton Beard.’’

SUDIA provides training and materials to all Community Outreach participants.

Contact

A scheduler service is also provided to find and schedule Community Outreach engagements for you, freeing up your time to speak.

Rebecca Egsieker Assistant Director of Communications regsieker@sedairy.org 770-994-5832

To learn more about the program or to sign up for training, please contact:

‘‘So few people today have any concept of modern dairy farming and the story cannot be told any better than by a dairy farmer who lives it and loves it.’’

------ Marilyn Easter, Dairy farmer, Laurens, South Carolina

‘‘Marilyn (Easter) is excellent! She makes me want to drink more milk and do whatever I can to support dairy farming!’’

------ Wade Cleveland, Rotary Club of Pleasantburg, South Carolina

Marilyn Easter, dairy farmer, Laurens, South Carolina.

Andre Barbour, dairy farmer, Canmer, Kentucky.

May - June 2015 • KDDC • Page 17

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

Agenda – KDDC Young Dairy Producer Tour June 29-July 1, 2015 Eunice Schlappi 502-545-0809 / Maury Cox 859-516-1129 Monday, June 29 (All times eastern) 8:00 a.m.

London- Meet @ Welcome Center (Exit 41 off I-75/Hwy 80, welcome center is on the west side of the exit- call Eunice for directions if needed) 8:30 a.m. Borden Dairy Plant- London, KY 11:00 a.m. Lunch 1:00 p.m.

DFA Testing Lab- Knoxville, TN 2:45 p.m.

UT Dairy Farm – Walland, TN 4:00 p.m.

Sweetwater Valley Farm- John Harrison- Sweetwater, TN

Dairy farm & Value-added cheese processing Evening Dinner Hotel – Holiday Inn Express- Lenoir City, TN Tuesday, June 30 8:00 a.m.

9:15 a.m.

11:00-1:00

Leave hotel Steve Harrison Dairy Inc.- Loudon, TN 1,000+ with two generations Chilhowee Dairy, Terry & Jennifer Bishop- Benton, TN Delaval Robotic Milkers, milking 200 organic jersey crosses

Lunch 3:15 p.m.

Beatyview Holsteins, Brian & Brent Beaty- McDonald, TN Registered Holsteins, three generations 5:00 p.m.

Barham Jerseys, Bill, Karen, Taqunner & Mary Barham- Calhoun, TN Registered Jerseys Dinner AgCentral Coop- Athens, TN Wednesday¸ July 1 8:00 a.m.

Leave Hotel 9:00 a.m.

Cruze farm (pending) 11:00 a.m. Leave For Kentucky ?? p.m.

Arrive in London, KY

Tentative Schedule- Farms may be adjusted to add more stops

May- June 2015 • KDDC • Page 18

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

S P E C I A L

Allied Sponsors Platinum Ag Central 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 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

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 2015 • KDDC • Page 19

Non-Profit US Postage PAID Boelte-Hall LLC

176 Pasadena Drive Lexington, KY 40503 859.516.1129 ph www.kydairy.org

2015 Dairy Calendar of Events June 2015

August 2015

June 25 Dairy Night at the Bowling Green Hot Rods – 5:00 P.M. June 25 Shelbyville 4-H District Dairy Show, Shelby Co. Fairgrounds, 9:00 A.M. June 26 Adair Co Dairy Appreciation Dinner, Fairgrounds, 6 P.M. June 27

Adair Co. June Dairy Day on the square, Columbia June 27 Marion Co. June Dairy Day, Fairgrounds, Lebanon June 29 – July 01 KDDC Young Farmers Dairy Tour To Tennessee

August 18 State Fair Dairy Products Judging, West Wing Fair Grounds August 19 Dairy Skill- A-Thon and Pizza Party – 7:00 P.M. New Market Hall August 20-30 Kentucky State Fair August 20 Commodity Breakfast, Commodity Tent, State Fair August 20-23 4-H and Open Dairy Cattle Shows, KY State Fair August 25 -27 Kentucky Milk Quality Conference, Lake Barkley State Park August 27 KY Farm Bureau Country Ham Breakfast, South Wing State Fair

July 2015 July 07 U of KY Dairy Research Showcase, Graham Hall of

E.H. Good Barn 10:00 July 10 Kentucky State Fair Livestock Entry Deadline July 11 Horse Cave 4-H District Dairy Show, Burley Fields

Livestock Center, 9:30 July 11 Oldham Co. Annual Farm Field Day July 21 Tri- County Dairy Meeting, Trenton Farm Supply, Todd Co. July 22

Tollesboro 4-H District Dairy Show, Tollesboro, 11:00 A.M. July23 -25 KY 4-H Junior Livestock Expo West, L.D. Brown Ag.

Center, Bowling Green July 24 KDDC Board Meeting 10:00 A.M. TBA July 29-30 Kentuckiana Dairy Exchange – TBA July 29 – Aug. 01 Larue Co. Agstravaganza, Fair Grounds, Hodgenville,KY

Milk Matters May - June 2015

September 2015 September 10 CPC Fall Field Day, Fountain Run KY September 25 KDDC Board Meeting, TBA Sept 30 – Oct 03 KDDC Young Dairy Producer Bus Tour, World Dairy

Expo. Madison, Wis October 2015 October 24

Dare to Dairy, University of Kentucky Coldstream Dairy, Lexington KY