Nov. 2, 2017 -- PDPW Dairy's Bottom Line

Volume 19: Issue 7 November 2017

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

Fill up with learning this fall Page 2 Ketosis research considers body condition

The late fall and winter period is ideal for refueling with expert-led programming. In November and December, several programs are available for producers to refill their learning tanks.

Page 4 Simple steps lead to calf survival

Page 6 Attitude adjustment coming up

Page 8

Feed and Nutrition Conference

modified organisms, hormones, antibiotics, air and water quality, market access and exports are just a few of the difficult topics that will be brought to light. The gathering features several top-level movers and shakers to speak to those issues and welcome questions from attendees.

Dairy farmers, policy makers, educators and allied leaders who want to have a role in determining the future of dairy should plan to attend.

Transition Cow Nov. 14 in Marshfield, Wis- Workshop consin; Nov. 15 in Arlington, Dec. 12 in Eau Claire, Wisconsin; Dec. 13 in Appleton, Wisconsin In two one-day sessions, Wisconsin leading feed and nutrition T h i s experts will share informafull-day workshop tion. is designed • Managing molds and toxfor dairy ins in feed fa r m e rs, • Potential benefits of new nutritiongenetic forage varieties ists and • Maximizing feed-byveterinariproduct ingredients ans looking to optimize cow health in the critical transition phase. Four leading experts will present new discoveries in transition diets, liver function, ketosis, animal treatment, culling and early-lactation production.

This five-part series will be presented on-farm in two Wisconsin locations – one in Kewaunee County and the other in Clark County.

Attendees will learn leadership and communication skills to position their dairies for business success, develop plans to protect their brands and increase their farms’ value to their communities.

The sessions will be hosted by Pagels Ponderosa Dairy and Boon Farms.

World Class Webinars

To be held online at noon Central Time “Simplifying Hoof Health from Day One” will be presented by Dr. Nigel Cook, veterinarian, chair of the Department of Medical Sciences and a Professor in Food Animal Production Medicine at the Un ive rs i ty o f Wi sco n sin-Madison School of Veterinary Medicine. Cook will share ideas, solutions, tips and tricks to create a plan to reduce lameness in dairy herds, all while protecting the dairy’s bottom line.

Continuing-education credits are available for all the programs, through Dairy AdvanCE, UW-Madison’s Food & Policy Summit Dairy’s Visible Voice School of Veterinary Medicine Dec. 6-7 in Madison, WisDec. 13 in Kewaunee, Wis- and/or the American Registry consin consin; Dec. 14 in Greenwood, of Professional Animal ScienGene editing, genetically Wisconsin tists.

Interest rates on the rise

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

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November 2017 • PDPW • Dairy’s Bottom Line

PDPW Board of Directors President Marty Hallock Mondovi, Wis. 715-495-2812 marbec@nelson-tel.net Vice President Mitch Breunig Sauk City, Wis. 608-643-6818 mysticvalley336@gmail.com Secretary Brian Forrest Stratford, Wis. 715-650-0267 bforrest70@gmail.com Treasurer Linda White Reedsburg, Wis. 608-393-3985 linda@krdairy.com Directors Andy Buttles Lancaster, Wis. 608-723-4712 stonefront@tds.net Jay Heeg Colby, Wis. 715-507-0030 jcheeg@yahoo.com Steven Orth Cleveland, Wis. 920-905-2575 orthlanddairy@gmail.com Katy Schmidt Fox Lake, Wis. 920-210-9661 katy_schmidt@live.com Dan Scheider Freeport, Ill. 815-821-4012 dnscheider@gmail.com

PDPW Advisers Mark Binversie Investors Community Bank Manitowoc, Wis. mbinversie@ investorscommunitybank.com Eric Cooley UW-Discovery Farms Sturgeon Bay, Wis. etcooley@wisc.edu Dr. Randy Shaver UW-Madison Dairy Science Madison, Wis. rdshaver@wisc.edu Chad Staudinger Dairyland Seed St. Nazianz, Wis. cstaudinger@dairylandseed.com

Ketosis research shows key findings Heather White

E

very producer wants dairy cows that are feed-efficient, but it’s unclear if selecting for feed efficiency might negatively influence metabolic health. Are more efficient cows more likely to develop ketosis?

A recent study at the University of Wisconsin-Madison explored the potential relationships between body-condition score, hyperketonemia or k e to s i s , a n d residual feed intake – a meaHeather sure of feed effiWhite ciency.

Residual feed intake is the difference between an individual cow’s observed feed intake and her predicted feed intake based on milk energy, maintenance energy, metabolic body weight and change in body weight. A cow with a negative residual feed intake consumes less feed than predicted and therefore is more efficient. Although selection of animals for feed efficiency could result in reduced feed costs and environmental impacts, the effect on other phenotypic traits such as metabolic health is largely unknown. Because metabolism influences feed efficiency, differences in feed efficiency could influence how a cow responds to metabolic challenges.

In the study, cows in their transition to lactation period were examined. Blood and milk samples were collected twice each week. Body-condition scores were noted for a group of

PhD student Rafael Caputo Oliveira checks the temperature of a cow as part of a fresh-cow examination.

570 cows that already had residual-feed-intake data measured from a previous lactation. Ketosis was diagnosed when blood BHBA – (beta) -hydroxybutyrate – levels were less than or equal to 1.2 mM, which was the case for 19.7 percent of the cows in the study – all of which were immediately treated.

The study’s results showed three primary findings.

Prior-lactation feed efficiency did not influence ketosis in the subsequent lactation. This was key because the question of whether feed efficiency influences metabolic health during subsequent lactations hadn’t been explored.

Given that mobilization of body fat provides energy to the cow during negative energy balance, it could also influence residual feed intake. This research

supports that residual feed intake is independent of fat mobilization and that selecting cows for feed efficiency will not increase their risk for ketosis.

While that supports the use of feed efficiency for selection, further studies to explore the onset of ketosis and other metabolic disorders should be conducted to determine if feed efficiency might be influenced in that lactation.

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November 2017 • PDPW • Dairy’s Bottom Line Cows with ketosis can produce more milk with early detection and treatment.

When comparing cows that were diagnosed with ketosis to cows that weren’t, it was found that cows with ketosis made more milk from five to 30 days in milk. The cows that developed ketosis were already making more milk prior to the average day of the first positive ketosis test, which was at nine days in milk. Based on other research, cows with ketosis might be expected to produce less milk.

However, treatment can lessen the negative impacts of ketosis.

Greater milk production in cows with ketosis in this study supports the value of early detection and treatment.

Cows that lose one or more body-condition units across the transition period are more likely to have ketosis.

Cows with a body- condition score of 4.0 or greater at 28 days prior to calving, or cows that lost one or more body-

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Managing the body-condition-score loss during the transition to onset of lactation is an important part of managing ketosis.

I n s u m m a r y, avo i d i n g over-conditioning of dry cows and excessive fat mobilization during the transition period may decrease the incidence of ketosis. And at this point, it doesn’t appear that selecting for improved feed efficiency will increase ketosis incidence in subsequent lactations.

UW

As part of her masters research, Frankie (Rathbun) Tiberio conducts a trial at the University of Wisconsin-Arlington Agricultural Research Farm to determine the relationship between body-condition score and onset of ketosis, and if residual feed intake is correlated with an incidence of ketosis.

condition-score units during the transition to the lactation period, had greater maximum blood BHBA levels. Interestingly, not all the cows that lost one or more body-condition-score units started at a body-condition score greater than 4. And cows in the most

efficient quartile of residual feed intake had body-condition scores as good as or better than the less efficient cows. Development of ketosis occurs when the liver is overwhelmed with more mobilized fat than it can oxidize, resulting in incomplete oxidation and ketone production.

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November 2017 • PDPW • Dairy’s Bottom Line

Maximize newborn-calf survival Geof Smith

S

tillbirths continue to be a major problem on dairy farms. According to results across several large studies, stillbirth rates range from 4.3 percent to 10.3 percent. Defined as fetal death within 24 to 48 hours after delivery, stillbirths are caused by a number of factors including proper genetic selection, nutrition and pen management. The primary culprit is dystocia, especially in first-calf heifers.

Fortunately the solution is often as simple a s t ra i n i n g employees how and when to assist in the Geof Smith birthing process. They need to understand how to assist, intervene, or call a manager or veterinarian for help if labor is not progressing normally. Even after the calf is born alive, a difficult birth often requires a higher level of care for the newborn calf.

To start, it’s important to know the difference between stageone and stage-two labor. Stageone labor is exhibited by cow restlessness, swollen vulva and distended teats. A cow is in stage-two labor when the calf’s feet are present outside the vulva. Moving cattle to the calving area during stage-one labor will increase the likelihood of stillbirths – particularly in heifers – because the movement interrupts the process of labor, resulting in higher calf mortality.

Normal labor takes between 60 and 70 minutes. Standard recommendations have been to intervene 90 minutes after the appearance of the amniotic sac.

Intervention that happens too soon or aggressively can result in cervical or uterine tears if the cow has not had sufficient time to properly dilate – particularly

Julie Belschner/Agri-View

Stillbirths take an economic toll not just in the loss of a calf, but also in lower milk production and more days open in the dams. Simple steps lead to healthy newborn calves.

if she’s a first-calf heifer.

When assistance is needed in the calving process, cows should be moved to a location where they can be appropriately restrained. The vulva should be cleaned to avoid metritis, and abundant lubrication should be used. Employees need to be trained to use obstetrical chains correctly and to pull the calf in synchronization with the cow’s contractions.

Using a calf jack will sometimes

be necessary but that requires extreme caution; a lot of problems can stem from this approach. A cow normally pushes the fetus with about 165 pounds of force.

Two humans pulling on obstetrical chains generate about 325 pounds of force. In contrast, one person and a calf jack can easily generate more than 900 pounds of force, which can cause a cow’s tissues to rip and tear. A typical recommendation is to teach employees to use only

human force with no more than two people. If they are unable to remove the calf the manager or a veterinarian should be contacted.

Though moving a cow during stage-one labor can have repercussions, a recent study involving 257 calvings showed that earlier intervention may not be harmful to cattle when cows were assisted appropriately. In that study, employees had been trained on how to properly intervene with calf pulling.

They were allowed to assist with labor 15 minutes after feet were present in the birth canal, using only human force – no calf jacks were allowed.

Calves were categorized into three groups: those that did not need assistance, those where early assistance was successful and those where assistance wasn’t given until after an hour had passed. The late-assistance group had higher stillbirth rates and reduced vigor compared to calves born normally or those receiving early assistance.

Every producer wants healthy calves that become part of the milking herd. Avoiding stillbirths means not just avoiding the economic toll that comes with losing a calf, but also the price paid by the dams. Studies show those cows have a significantly increased risk of being culled or dying in the following lactation, of more days open and of reduced milk production compared to herd mates that had live calves.

In my next column I’ll cover another key to avoiding stillbirths – managing the newborn calf properly.

Dr. Geof Smith, veterinarian, is professor of ruminant medicine in the College of Veterinary Medicine at North Carolina State University.

Contact geoffrey_smith@ncsu.edu for more information.

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November 2017 • PDPW • Dairy’s Bottom Line

Save the date: 2018 Business Conference

It’s all about attitude

You’re invited to take part in dairy’s premier event March 14 and 15, 2018 – the PDPW Business Conference. Don’t miss this opportunity to network with others and have access to the latest in dairy n e ws , te c h n o l o g y a n d hands-on learning sessions.

This also serves as official notice of the PDPW business meeting. Join us March 14 and 15 at the Alliant Energy Center in Madison, Wisconsin, and prepare to thrive.

Walt Disney World in sunny Orlando, Florida, will be the backdrop of Managers Academy for Dairy Professionals™ to be held Jan. 16-18, 2018.

The executive-level training, designed for seasoned dairy owners and managers, industry directors, processors, marketers and distributors will feature Walt Disney World Resort’s former Executive Vice-President Lee Cockerell along with David Kohl, professor emeritus in the agricultural and applied-economics department at Virginia Tech.

Cockerell and Kohl will share secrets of creating magic in business by hiring right and training employees to have the right attitude. Because cows can sense the moods of those working with them, having the right attitude is

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imperative. It can lead to less cow stress, fewer accidents, reduced employee turnover and higher profitability.

The event will include a tour of a Disney park and showcase Disney from a manager’s perspective so attendees can discover how the Disney culture, protocols and systems directly

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relate to dairying.

In addition, attendees will hear from Jim Sleper, CEO of Southeast Milk Inc. as he shares how their full-service cooperative partners with large fluid processors such as Publix Super Markets, Dean Foods and Borden’s. Participants will also tour the Iron Bridge Regional Water Reclamation Facility in the Orlando Easterly Wetlands.

They will learn how the facility “polishes” highly treated water before discharging it into the environmentally sensitive St. Johns River system.

This training puts participants shoulder to shoulder with other elite executives and will transform any business from mediocre to magical. Visit www.pdpw.org or call 800947-7379 to register and for more information.

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November 2017 • PDPW • Dairy’s Bottom Line

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Evaluate outdoor lighting Focus on Energy

Shorter days and longer nights mean more hours requiring lighting – and higher electric bills. Fortunately modern lighting technology can save energy and money with upgraded pole-mounted yard lights and flood lights.

There are numerous benefits to u pg ra d i n g ex te r i o r l i g h t i n g w i t h light-emitting diode technology.

1. Energy use is reduced. LEDs generate similar light output per watt and generally have a longer lamp life than t ra d i t i o n a l o p t i o n s . R e p l a c i n g high-pressure-sodium and mercury-vapor lamps with LED lights equals energy savings, even if upfront costs are slightly more.

2. LEDs prefer cold weather so they’re a natural fit for outdoor lighting. As temperatures fall, performance improves thanks to the LED heat sink that dissipates diode heat.

3. Less maintenance is required and life expectancy is longer. That not only reduces trips up and down a ladder but also money. LED fixtures have a typical lifespan of 50,000 hours.

4. Photocells and timers limit hours of operation. Many yard lights come with a photocell that turns the lamp on at dusk and off at dawn. Additional savings can be gained by installing half-night photo sensors that turn the lamp off during the later overnight hours.

5. Motion sensors can improve security while cutting costs. Installing motion sensors at building entrances, walkways or near fuel tanks will turn lights on when there is movement nearby, improving safety and saving energy by turning lights off.

Visit focusonenergy.com/guidebooks or call 800-762-7077 for a free copy of Focus on Energy’s Agriculture Energy Efficiency Best Practices Guidebook.

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November 2017 • PDPW • Dairy’s Bottom Line

BY THE NUMBERS

Protect against interest-rate increases Bruce Jones

D

uring the past decade or so, interest rates on loans have been quite low. That has been good news for farmers borrowing money.

We now appear to be entering into a new era in which interest rates are likely to be higher than they have been in recent years.

T h e Fe d e ra l Re se rve h a s Bruce Jones gone on record that, in the near term, it will shift from an expansive monetary policy to a more restrictive one. As a result, interest rates will rise.

The Fed will need to be careful not to increase interest rates by large amounts in a short period of time because that could shock the economy back into another recession.

Interest rates are likely to be

Table 1

Debt-to-asset position of daily operation

The above values assume 10.02 rate of return on assets, 4.72 percent interest rate on debt and asset turnover of .54. These values are averages during the 2011-2015 period for U.S. dairies with sales of $1 million, as reported in the Agricultural Resource Management Survey.

increased incrementally rather than all at once.

The extent to which increasing interest rates will impact dairy producers depends largely on how aggressively producers are using debt to

finance their operations.

Those producers who have little or no debt will be relatively unaffected by hikes in interest rates. In contrast, producers with high levels of debt will incur higher interest expenses

such that their cost of producing milk will increase.

The values in Table 1 were estimated to determine how the cost of producing a hundredweight of milk is likely to change if interest rates rise by 1 percentage point. The estimates were calculated using financial data from the Agricultural Resource Management Survey database for U.S. dairy farms with sales of $1 million or more.

In the cases considered there, debt usage is reflected in terms of debt-to-asset ratios.

Debt-to-asset values of 20 percent and 33 percent represent low-debt situations.

Debt-to-asset ratios of 43 percent and 50 percent are moderate-debt situations.

Situations of high debt are represented by a debt-to-asset ratio of 75 percent.

Fo r t h e m os t pa r t , a n increase of 1 percentage point

November 2017 • PDPW • Dairy’s Bottom Line in the interest rate on debt does not have a dramatic impact on the cost of producing milk. When the debt-toasset ratio is 25 percent, cost of production increases about seven cents per hundredweight for each percentage-point increase in interest rates. With a debt-to-asset position of 33 percent, an increase of 1 percentage point in interest rate increases the cost of production about 12 cents. For the cases in which

debt-to-asset positions are 42 percent and 50 percent, cost of production per hundredweight increases about 16 and 18 cents, respectively, for each increase of 1 percentage point in the cost of credit. At the relatively high debt-to-asset position of 75 percent, the cost of producing milk increases about 28 cents per hundredweight for each increase of 1 percentage point in the interest rate on debt.

Although rising interest

rates on loans are not likely to have a dramatic impact on dairy producers’ cost of producing milk, that doesn’t mean managers shouldn’t be concerned about those additional costs. With profit margins being razor-thin, even small increases in production costs can cause financial problems for dairy operations. Producers can shield themselves from potentially higher interest costs by moving from variable-interest-rate loans to

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those with fixed interest rates.

The fixed-rate loans are likely to carry a bit higher interest rates, but they will at least stay constant in the near term.

Alternatively, producers can stay with variable-rate loans and pay the higher production costs as interest rates increase.

Bruce Jones is a professor of dairy science at the University of Wisconsin-Madison. Contact bljones1@wisc.edu for more information.

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November 2017 • PDPW • Dairy’s Bottom Line

Top dairy farmers give tips Steve Eckerman

E

veryone is facing the same depressed milk prices, but not all dairy farmers are in the same economic position.

Differences in milk production, cost of production, income compared to feed cost and other Steve factors mean Eckerman one dairy producer might be able to squeak out a profit while a neighbor takes a loss.

C o m p e e r F i n a n c i a l ’s dairy-consulting team used the Dairy Profit Manager financial model alongside industry knowledge to analyze performance for the 2016 Annual Benchmark Report. Benchm a rk i n g i n d i c a te s wh a t top-performing dairies do differently than their peers.

The report includes 58 farms using Dairy Profit Manager.

The farms are primarily in Wisconsin, Minnesota, Michigan, and Ohio. Of those, 15 farms were identified in the top 25 percent as ranked by pre-tax net income per cow. The average number of cows on each farm was 1,399 in 2016, and ranged from about 300 to 5,800 cows.

Focus on cost of production

The top 25 percent of clients had a cost of production at $15.75 per hundredweight for 2016, adjusted for butterfat and protein content. That was $1.31 per hundredweight less than the average.

To attain a similar level of success, focus on three key areas.

• Feed – harvest high-quality forage to substitute for purchased commodities, negotiate with vendors on prices and contract feed needs when

contributed

Despite the detrimental effects of sagging milk prices on the dairy industry, a few bright spots can be found.

opportunities arise.

• Labor – align pay raises with increased responsibilities and improved performance when possible. Evaluate owner wages and draws to verify they’re in line with operation needs and the current economy.

• Net herd-replacement cost – manage heifer inventories to raise only the necessary number of replacements, look to dairy sales for improved cash flow when barns are already full and evaluate treatment protocols so animals are culled at the right time.

Despite the detrimental effects of sagging milk prices on the dairy industry, a few bright spots can be found.

Several key action items contributed to the success of many top producers.

• Develop and stick to a milk-marketing plan that offers

protection from the lows while still allowing for benefits from market rallies.

• If discontinuing the use of rBST – recombinant bovine somatotropin – optimize reproduction metrics and strive for a healthy number of days in milk to maintain milk production.

• Maximize income compared to feed cost by taking advantage of lower feed costs.

Increase milk production while also aiming to produce more than 6 pounds of butterfat and protein per cow per day.

• Evaluate culling and treatment programs to target less than $1 per hundredweight of net herd-replacement cost.

• Maintain working capital per cow of at least $600 to take advantage of prepayments, cash discounts or capital purchases that can improve efficiencies.

Top producers earn profits Average net earnings decreased to -$211 per cow in 2016, compared to -$33 per cow in 2015. That’s the lowest net income in the past five years of the study.

But the top 25 percent of clients averaged earnings of $290 per cow, demonstrating money can be made in a challenging milk market. Still, the top 25 percent only recorded about half of 2015 earnings.

Minor adjustments can have substantial effects. Evaluating financials can help determine key areas where efficiencies can be created to maximize opportunities for farm profitability.

Steve Eckerman is a dairy consultant at Compeer Financial – mission sponsor of PDPW.

November 2017 • PDPW • Dairy’s Bottom Line

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FOCUS ON WHAT MATTERS

Build success on teamwork Katie Mrdutt

S

t a n t o n Fa r m s i s a sixth-generation family dairy farm in the southern part of New York’s Albany County. With a team of 20, Stanton Farms milks 900 cows and raises 700 replacement h e i fe rs . T h e dairy currently a v e ra g e s 8 8 Katie Mrdutt pounds per cow on threetimes-a-day milking.

Herd manager Carolyn Abbott attributes the success of the farm to the consistent team-communication practices.

“Teamwork is very important to the farm and we work hard to engage all employees,”

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she said. “Constant communication is key. We’re always working to improve verbal and written communication to keep everyone in the loop.”

Monthly team meetings with all farm owners, managers, key employees and the support team – including veterinarian, nutritionist and other industry professionals – is the foundation of Stanton’s team-oriented approach. The team also holds weekly meetings for managers and monthly employee-training sessions.

“Open communication is huge here,” Abbott said. “Good or bad, everyone has to be unafraid and willing to work through issues without the risk of hurt feelings. We’re all working toward the same goal, so being able to take and give

criticism is crucial to making the farm better.”

Stanton Farms earned Food Armor® certification in 2017.

“Food Armor has eliminated many gray areas,” Abbott said.

“Our farm had some protocols before but we didn’t regularly review them to make changes or use them when training new employees like we should have.

Now everyone knows what is expected of them and where their responsibilities lie.

“A big change was assigning certain people to be in charge of specific tasks. For example, when the same two people are always the ones accountable for treating fresh cows on any given day, controlling what and how treatments are given becomes much easier. Minimizing variation on the dairy is

very important.”

Accountability is part of what makes Stanton’s farm team so successful, she said.

“Everything gets written down with initials of the person doing the task,” she said.

“If there are ever questions about any treatments or tasks, there is a specific person to address. Regardless of the schedule or who is working there is no confusion over what needs to be done. Protocols and standard operating procedures are the same for everyone and everything is well-documented.”

Dr. Katie Mrdutt is a Food Armor Outreach Specialist with the Wisconsin Veterinary Medical Association.

Contact mrdutt@wvma.org for more information.

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November 2017 • PDPW • Dairy’s Bottom Line

Control weather effects Amber and Tim Radatz

I

t’s no secret there are elements of farming that can’t be controlled – the weather and markets to name a couple.

The team at the University of Wisconsin-Discovery Farms often receives weather-related questions. They monitor water Amber quality at edgeRadatz of-farm fields including surface runoff and rain measurements.

As technologies and data Tim Radatz -recording systems improve, weather is indeed becoming more predictable – or more forecastable at least. And while weather can’t be controlled, its effects certainly can be mitigated.

As programs of UW-Extension, the Wisconsin and Minnesota Discovery Farm teams have monitored 127 site-years worth of edge-of-field surface runoff. During that time frame, 2,184 surface-runoff events were measured. A mere 10 percent of them represent the

Table: Nitrogen, Phosphorus and sediment loss by rainfall-return period

majority of the nutrient and soil losses that occurred.

As part of the UW-Discovery Farms research, all surface runoff events were paired with rainfall data. Rainfall-intensity data was then compared with data from the National Oceanic and Atmospheric Administration for each location, to define rainfall-return periods for each runoff event.

A rainfall-return period is an estimate of the likelihood of a rainfall event to occur. For example, a rainfall event with a 100-year return period would be expected to occur once in every 100 years. In any given year the probability of a 100year rainfall event occurring is one in 100 or 1 percent. In general, as the return period increases, so does the rainfall intensity.

While the dataset includes several large storm events, most

runoff events – and phosphorus and nitrogen losses – are generated by storms with a rainfall-return period of less than one year, as shown in the table.

Our conservation practices are often designed for 25-year storms.

Even though technology is advancing rapidly, traditional conservation practices are still the backbone to preventing soil and nutrient losses during storms. Waterways, contour farming, limited soil disturbance and grade-stabilization structures are examples of the traditional soil-conservation practices that work to improve a farm’s environmental resiliency, no matter the size of the storm.

During one UW-Discovery Farms project on a farm in the Driftless Area region of Wisconsin, a grade-stabilization structure was installed – specifically a check dam. As a result

the average sediment concentrations deposited in grassed waterways nearby were reduced by 73 percent.

A check dam is a small dam constructed to reduce the velocity of water flow in order to counteract erosion, but many other structures can serve similar purposes. Refer to “Conservation Benefits of a Grade Stabilization Structure,” by UW-Discovery Farms and Kyle Minks, a Dane County land and water-resource scientist.

The time window during which soil is frozen and snow is melting is an important period for runoff in Wisconsin, Minnesota and the rest of the Upper Midwest. In fact, this is typically when more than half of surface runoff occurs. The period is also important for phosphorus and nitrogen movement even though soil movement is limited during snowmelt.

Illustration: Surface runoff; soil, phosphorus and nitrogen loss by non-frozen and frozen soil types

November 2017 • PDPW • Dairy’s Bottom Line The amount of nutrient losses and runoff from snowmelt has a predictable correlation with the impact of extreme rainfall events during the growing season. If nutrient losses and runoff decrease with snowmelt, the influence of extreme rainfall events will likely increase.

Dairy farmer and Discovery Farms participant Joe Bragger said, “Snowmelt and runoff are a unique science. One really has to know what the soil conditions are under the snow and be careful during critical times, which is usually February and March.”

During the seven-year study on Bragger Family Dairy near Independence, Wisconsin, the Braggers applied manure in November and December during six of seven years, as well as in two years in March when snow had already melted. None of those applications increased nitrogen or phosphorus relative to the control site. Carefully timing manure applications

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Weather is a tricky factor to work around. Though some elements can be controlled, producers need to adopt strategies to minimize nutrient loss – especially during the critical snowmelt period.

For more on adapting when weather won’t, attend the Dec. 12 UW-Discovery Farms conference. Chris Kucharik, associate professor of agronomy at UW-Madison, will speak on the topic. The conference will also feature a reality-check panel to equip participants with strategies that work. Visit www. uwdiscoveryfarms.org for more information.

A check dam is a small dam constructed to reduce the velocity of water flow, generally across a swale, drainage ditch or waterway. Though check dams are an ancient technique dating all the way back to the second century AD, they continue to be effective today.

based on field conditions and the weather forecast is critically

important to reducing net nutrient loss.

Amber Radatz, co-director of UWDiscovery Farms, and Tim Radatz, Discovery Farms coordinator for Minnesota Agricultural Water Resource Center, have spent the past decade working with dairy farmers on soil and nutrient-loss risk reduction. Contact Tim Radatz at radatz@mawrc.org or contact Amber Radatz at aradatz@wisc.edu or 715983-5668 for more information.

Twohig Rietbrock Schneider & Halbach “Attorneys for Agriculture” (920) 849 - 4999

Legal, business and planning solutions for Wisconsin’s farms and agribusinesses.

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November 2017 • PDPW • Dairy’s Bottom Line

LEGALLY SPEAKING

Avoid probate with living trust George Twohig

D

ear George: My wife and I are discussing how to best plan for transferring our farm assets. Many of our peers have already established wills for their assets, but we’re wondering if other options are available. We’d really like to protect our family members from the hassle and cost of probate. Can you help us sort through the options? – Planning Ahead Dear Planning Ahead: It’s true that a primary concern of people in your situation is “How can we avoid probate?”

We a re s u rGeorge prised at how Twohig many farmers still have wills as their primary estate-planning documents. Too many wills fail to adequately deal with farm-transfer plans.

In the past, wills were the standard method for transferring a decedent’s estate. Today most estate-planning attorneys will recommend a living trust instead of a will.

Wills require probate Assets that pass through a will must go through court-supervised probate. The court or register-in-probate monitors the estate administration, inventory of assets, payment of taxes and other creditors as well as final distribution to beneficiaries. Simply put, probate is the process of taking the decedent’s name off assets and transferring ownership to designated beneficiaries. Probate is inherently time-consuming, creates a public disclosure of the decedent’s assets and is potentially expensive. Although a dva n ta ge o u s i n l i m i te d

Jane Fyksen/Agri-View

Dave Gilbertson, left, and his son Kevin Gilbertson are embarking on formal farm-transition planning that will position the farm in the hands of three brothers and their respective families. The farm has been in the Gilbertson family since 1875.

situations, most farmers believe they don’t need court supervision of their estates. We sometimes wonder if some attorneys still recommend wills because of the higher attorney fees that often result from court administration of an estate, rather than recommending non-probate planning alternatives.

Living trusts avoid probate A living trust is an immediate revocable trust created by a person or a couple called the grantor or grantors. The grantor or grantors set rules under which the trust estate will be held, administered and distributed – both during the grantors’ lifetimes and after their deaths.

They usually act as the initial trustees. During their lifetimes they retain the right of management and control of the trust estate, and can withdraw or distribute assets to themselves or others. The trust is disregarded for income-tax purposes; all income is reported under the grantors’ social security numbers. The grantors may revoke

or amend the trust at any time.

The basic purpose of a living trust as compared to a will is to avoid probate. Assets transferred to the living trust during the grantors’ lifetimes avoid probate because they are not owned by the grantor at the time of his or her death. Assets can also be transferred without probate to the living trust at death under a marital-property agreement, by real-estate-transferon-death deed, by payable-ondeath designation of accounts and by beneficiary designation.

The living trust will name successor-trustees – usually selected children – to act in the event of the grantors’ incapacities and after the surviving grantor’s death. Often a farmer’s living trust will designate the on-farm heirs as farm-trust advisers who have authority to direct the trustees in the management and control of the continuing farm business and farm assets.

Other trusts available In special situations, other types of trusts are used in succession and estate planning to

deal with specific problems and planning challenges.

• Trusts, funded during life or at death, can allow successors a period of time to earn their interests in the farm assets.

• Irrevocable-income-only trusts assist in qualifying for Medicaid.

• Supplemental-needs trusts provide funds for handicapped beneficiaries; these funds do not supplant Supplemental Security Income, Medicaid and other benefits.

• Irrevocable trusts hold life insurance, farm and other assets in order to remove those assets from the grantor’s taxable estate.

Whether based on a will or a trust arrangement, a farmer’s estate plan must be part of a well-developed succession plan. It must be updated from time to time to remain effective.

Hopefully the parents will live long enough to fully, or at least substantially, transfer the operating LLC or farm property to the successors.

But often the parents still own all or a substantial part of the farm real estate at death. The estate plan must provide for the transfer of the remaining farm assets to the successors. Or it must at least offer the option to lease and eventually acquire those assets – especially essential real estate – at a price the farm can afford. Too often existing options at today’s inflated values would not cash-flow. But with proper planning, any individual or couple can transfer the estate without probate.

George Twohig is a partner and attorney at Twohig, Rietbrock, Schneider & Halbach S.C. in Chilton, Wisconsin; the firm focuses on agriculture and agri-business.

Contact george@twohiglaw.com for more information.

November 2017 • PDPW • Dairy’s Bottom Line

15

Consider an activity-monitoring system Paul Fricke

A

n artificial insemination program is critical to high-level reproductive performance in dairy herds, but visual heat detection remains a top challenge for most farms.

Fortunately, a new generation of activity-monitoring systems – those that continuously m o n i t o r changes in estrous-related physical activity – h ave b e e n Paul Fricke developed. Not surprisingly, this type of technology has been rapidly adopted in the United States during the past several years.

Researchers conducted a field trial – using a commercial activity monitoring system – to compare reproductive performance of dairy cows managed for first artificial insemination with

timed artificial insemination regardless of estrus detection.

Cows were submitted to a Presynch-Ovsynch protocol for first artificial insemination. Activity was monitored using a commercial activity-monitoring system.

Cows in Treatment 1 that showed increased activity after the second prostaglandin f2 alpha treatment of the Presynch-Ovsynch protocol were inseminated based on that increased activity.

Cows in Treatment 1 without increased activity were submitted to an Ovsynch protocol beginning 12 days after the second prostaglandin f2 alpha treatment of the Presynch protocol. These cows then received a timed artificial insemination at 75 days in milk.

Cows in Treatment 2 with increased activity after the se co n d p ros ta g l a n d i n f 2 a l p h a t rea t m e n t o f t h e

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Presynch-Ovsynch protocol were recorded by the activity-monitoring-system software. All cows completed the Presynch-Ovsynch protocol and received a timed artificial insemination at 75 days in milk.

The activity-monitoring systems detected increased activity in 69 percent and 70 percent of cows in Treatments 1 and 2, respectively, after the second prostaglandin f2 alpha treatment of the Presynch-Ovsynch protocol. That’s 10 percent to 15 percent more than that reported in studies using tail chalk after the second prostaglandin f2 alpha injection of a Presynch-Ovsynch protocol.

Overall, cows in Treatment 1 had lower fertility than cows in Treatment 2. In addition, Treatment-1 cows had fewer pregnancies per artificial insemination. That was expected because the increase in pregnancies per

artificial insemination due to pre-synchronization was probably the result of synchronizing estrus among cows so that most of them would initiate the Ovsynch protocol during days five to nine of the ensuing estrous cycle.

Cows without increased activity after the second prostaglandin f2 alpha treatment and submitted to an Ovsynch protocol had pregnancies per artificial insemination of 33 percent and 35 percent for Treatments 1 and 2, respectively. Ultimately, if cows aren’t detected in heat based on increased activity using activity-monitoring systems, it’s sensible to submit them to an Ovsynch protocol.

Paul Fricke is a professor of dairy science at University of WisconsinMadison. Contact pmfricke@wisc.edu for more information.

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