Dairy's Bottom Line January 2015

Volume 17: Issue 1 January 2015

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

Is your farm business crisis-prepared? Page 7

Dairy industry contributes more than $43.4 billion to Wisconsin’s economy, Page 18

Cornerstone Dairy Academy™, Page 30

Hone your dairy financial skills , Page 31

A world of connections awaits you: 2015 PDPW Business Conference Kick off 2015 by making plans now to attend the 2015 PDPW Business Conference, March 18-19, at the Alliant Energy Center in Madison, Wis. The Conference is your portal to a world of new connections that can help you and your dairy business thrive. It’s also your portal to the dream team of the dairy business—Dr. David Kohl, Tim Hunt and Mary Ledman—who will deliver three of the conference’s six general session keynotes.

Back by popular demand, Dr. David Kohl will take you on a ride far beyond your farm during the Business Conference’s Opening General Session keynote, “Connecting the Dots, Economically and Generationally.” With one foot planted on your dairy and the other on the gas pedal, acclaimed economist and teacher Dr. Kohl will explore economic data and resources that will make a difference in your future success and will help you

Dave Kohl

Tim Hunt

connect with critical success factors and visualize just how important you are to the dairy universe.

During his March 19 morning keynote, “Think Globally, Connect Locally,” Tim Hunt, Global Dairy Strategist for Rabobank’s Food & Agribusiness Research and Advisory team, will assess the demand for dairy products around the world, growth in competing dairy regions and your ability to compete on the world stage. He also will explore the challenges facing our processing infrastructure and reveal the increasingly i m p o r ta n t co n n e c t i o n s among everyone in the dairy supply chain.

No one knows the dairy

m a rke ts a s well as Mary Ledman, fo u n d e r o f Keough Ledman Associates, a dairy Mary Ledman e c o n o m i c consulting firm. Using her keen insight into the production, processing, pricing and policy side of dairy, Ledman will deliver one of the Closing General Session keynotes on March 19 and show us how to “Connect to Profit Opportunities in 2015.”

The 2015 PDPW Business Conference, March 18-19, Madison, Wis., is the place to connect with a new idea, an old friend, a global perspective, a preferred supplier, an inspiring attitude, a leading expert, the latest technology and a trusted resource—all in just two days.

Look for more information about the PDPW Business Conference in the next issue of Dairy’s Bottom Line.

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

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Use SOPs to control costs and add value to your dairy The list of tasks that must be done every day on a dairy farm is long–handling new calves, feeding cows and calves, mixing milk replacer, milking cows, mixing feed rations, cleaning milking equipment, transporting cattle and training employees are just a few.

But, one of the least favorite tasks–probably even lower on the list than cleaning the barn–is developing a complete set of standard operating procedures (SOPs) for the operation.

Writing SOPs can be as frightening and daunting as giving a speech at the local Rotary club.

It’s a job that’s put off for those less-busy days . . . and when those rare days arrive, another emergency comes along that derails the assignment to the bottom of the “To Do” list. But, SOPs can be powerful in driving continuous improvement and bottom line results.

Why should a dairy want SOPs? Here are some reasons how SOPs can impact dairy performance: 1) Animals flourish on consistency and perform much better when things are done correctly, on time, the same way, every time.

2) People need consistency to do the best job. Doing tasks the same way every time rather than guessing how the boss wants its done improves productivity.

3) SOPs can reduce system variation which brings about production efficiency and quality control.

4) Step-by-step instructions

help trainers ensure that nothing is missed and provide a tool for employees to turn to when they forget the steps involved in a job or their supervisor isn’t there to ask.

5) SOPs work very well as a reference document for relief workers or people who do not perform the job on a regular basis.

6) Involving employees in developing SOPs creates engagement. If employees have input in SOP development, the final product is usually more complete, useful and accepted.

7) SOPs aid in conducting performance evaluations because they provide clarity for what must be done and shared expectations for how tasks should be completed.

8) Using complete SOPs can reduce biosecurity risks and help keep employees safe at work.

Detailed procedures might provide some legal protection if an injury occurs.

9) Animal well-being programs such as Farmers Assuring Responsible Management (F.A.R.M.) recommend written SOPs, posted in the language of the farm’s employees. A best practice is to review SOPs annually and update as necessary.

Getting started with the writing effort The first step to writing SOPs is to identify four or five critical areas where SOPs would be useful. Examples might include hiring employees, feed management, animal handling, manure handling, equipment cleaning and sanitation, vaccination, bedding, biosecurity or new animal

arrival.

Based on the list in step one, you should then identify one or two top areas for attention. In which areas will economic returns or impact on the operation be the greatest? Are there areas with “low-hanging fruit” that will allow some early successes and serve as a springboard to continue the effort?

Step 3 is to pinpoint the best person to lead the SOP effort and assign a team of employees, managers, agribusiness representatives, consultants and others who can bring appropriate expertise to the effort.

If you’re challenged about the actual writing of the SOPs, you can look online or ask your field representative or extension agent for SOP formats.

As a supplier to world markets, the goal of every dairy producer must be to protect consumer confidence and trust in the dairy industry by demonstrating a commitment to best management practices.

Having effective SOPs is the foundation for providing that assurance, can ultimately benefit a dairy’s bottom line and even offer a competitive advantage.

For producers who are serious about supplying the market, investing the time and energy today to develop and implement effective SOPs will result in economically sustainable business performance.

Joan Behr Director of Communications and Brand Management, Foremost Farms USA , a corporate sponsor of PDPW

PDPW Board of Directors President Keith York Lake Geneva 262-903-6265 kejyork@gmail.com Vice President Mitch Breunig Sauk City 608-643-6818 mysticvalley@wildblue.net Secretary Kay Zwald Hammond 715-796-5510 rfkz@centurytel.net Treasurer Charlie Crave Waterloo 920-478-3812 charles@cravecheese.com Jeremy Natzke Greenleaf 920-371-1968 jnatzke@yahoo.com Brian Forrest Stratford 715-650-0267 bforrest70@gmail.com Marty Hallock Mondovi 715-495-2812 marbec@nelson-tel.net Walter Meinholz DeForest 608-846-4379 wmeinholz@centurytel.net Linda White Reedsburg 608-985-6006 linda@krdairy.com

PDPW Advisors Matt Repinski Land O'Lakes Winfield Division Amherst Dr. Richard Wallace Zoetis McFarland Dr. Steve Kelm University of Wisconsin-River Falls River Falls Steve Schwoerer Badgerland Financial Fond du Lac

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

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Growing new farming traditions, protecting the next generation of farmers Farming traditions are important to Wisconsin, and, to keep Wisconsin strong, protecting families and children in our farming communities should be a priority.

In the U.S., farming and other agricultural professions consistently rank among the most dangerous, along with mining, transportation and construction.

The difference between agricultural professions and the other dangerous industries is the presence of children in the worksite. Farming is typically a family business, where children are raised on the farm and participate in farming activities at young ages.

Troubling child safety statistics

• One child dies about every three days on a farm.

• Of the leading sources of fatalities among all youth, 25% involved machinery, 17% involved motor vehicles (includes ATV’s), and 15% were drownings.

• Every day, 38 kids are injured in an agricultural related accident.

• It’s estimated that more than 7,700 kids were hurt on a farm in 2012, and 80% of them were not working when the injury occurred.

The good news is that the rate of injury among kids declined by more than 60 percent from 1998 to 2002. But when you break the numbers down by age, you

Photo by Thomas Northcut

Keep kids safe by making safety a year-round priority.

uncover another frightening statistic: Injuries among kids under age 10 are increasing. From 2009 to 2012 the rate of injury among kids under age 10 almost doubled.

What does an injury cost?

• $143,580 for injury of a youth that required 10 or more days of hospitalization.

• $6,577 for an injury requiring less than 10 days of hospitalization.

Bottom line: You cannot afford to NOT make safety a priority on your farm. For many, a single injury could wipe out a farm’s operating profit for an entire year.

As for the cost of a child’s life, you cannot put a number on that.

Let’s make safety a year-round priority.

Statistical information provided by the National Children’s Center for Rural and Agricultural Health & Safety.

John Quirk Director of Marketing, Rural Mutual Insurance Company , a corporate sponsor of PDPW

Rural Mutual Insurance Company

www.ruralins.com As the leading insurer of Wisconsin farms, we recognize that agri-business requires special protection. After all, your farm operation is your home, your business, and a considerable capital investment.

To protect your livelihood, call 1-877-219-9550 or visit our website and we can show you the variety of coverage’s available to address all your insurance needs.

Premiums Paid Here, Stay Here To Keep Wisconsin Strong.

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Keep teats healthy this winter Winter brings cold, harsh weather with low humidity, the perfect conditions for teat skin chapping, damage and hyperkeratosis, the most common teat skin and teat end problems.

When temperatures are in the 30s and are combined with 20 to 25 mph wind speed, frozen teats are likely to occur if preventative measure aren’t in place. During cold months, teat skin damage is a major factor predisposing cows to mastitis.

The following strategies can help keep herds healthy and producing high-quality milk through winter.

Precondition teats: Because teat skin thickness changes rapidly during extreme changes in temperature, it’s important to condition the teat skin to keep it flexible. Increasing the amount of emollients in your post-dip will help precondition the teat skin, making it more flexible and ready for the changing weather.

Evaluate winter teat dips: Select a proper teat dip that is formulated for your cows’ winter weather environment.

Emollients are a critical element in winter teat dips as they protect, heal and soften skin in harsh weather.

As soon as the weather starts to get cold, use a post teat dip that contains a higher level of conditioning balanced with the proper protection against mastitis. When the cows’ environment hits below freezing, use a winter teat dip with high levels of emollients (preferably between 74 percent to 76 percent) with an extremely low freezing point (-76° F on average) to protect your cows.

Keep in mind that

Preventative measures can help prevent frozen teats. Emollients in winter teat dips can help protect, heal and soften a cow’s skin in harsh weather.

conventional water based dips freeze solid around 29°-32° F. A good winter teat dip should also include an effective germicide proven to kill mastitis causing bacteria.

Maintain equipment and optimize automation: Evaluate equipment to ensure it is functioning properly. Perform both static and dynamic (while milking) tests as well as making sure parts are replaced at the recommend interval.

Current equipment settings should be set at optimal to your cows’ current milk production

and the liner that you are using.

Settings that are too low or too high than the optimum for vacuum and pulsation will increase teat stress and aggravate teat end condition. Detacher settings with a milk flow rate that is too low prolongs unit on-time and causes excessive compression against the teat end (due to vacuum level increases during low flow periods).

Precise milking procedures: Proper milking procedures are crucial to harvest high quality milk safely and quickly.

Your milking procedure

should allow for proper stimulation, milk-let down time (90 to 120 seconds), clean teats, proper unit attachment and alignment. Milkers should be educated on the challenges of winter weather and the effects on teat tissue. Because of the rough, flower-like characteristics of hyperkeratosis, soil can be trapped on teat ends, making cleaning much more difficult.

Milkers need to apply pressure across the teat end when wiping to better clean teats and aid in removing excess keratin when it is ready.

Prime housing environment: Managing the environment will minimize the impact of winter weather on teat end health and is especially important for fresh cows. Fresh animals are more prone to teat damage, as they have less circulation in their udders and more swelling.

Keep bedding dry to prevent ill teat skin effects and prevent it from freezing in the stall. This might mean more frequent bedding and using less recycled bedding in the winter. Be sure to monitor stall usage, a decline may indicate frozen bedding or clumps of frozen bedding in the stall. Wind blocks can help reduce wind speeds and prevent chapping or frostbite.

Healthy teats mean high-quality milk and healthier cows, and that is more profit in your pocket.

Keith Engel Dairy Farm Hygiene and Supplies Specialist, GEA Farm Technologies , a corporate sponsor of PDPW

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Invest, capitalize, save: What’s your best option?

A realistic business plan, a strong management team and a strong capitalized business are three components of an ongoing, successful operation. To ensure continued success, changes in technology, economic conditions and numerous other factors require businesses to grow and change.

Business growth can be accomplished with bringing in investors, obtaining capital with loans or by building capital through profits. While time and control can affect your plan, each of the three mentioned options has advantages and disadvantages.

Bringing in an investor(s) to help grow your business may give you immediate capital to grow the business quickly. The investor(s) may complement your management with knowledge and experience that might help the business as well as bringing in capital.

To expand the business, some choose to bring in another business as a partner and identify management responsibilities in the new operation. Some will bring in one or more new investors—silent or active— who bring in cash for a share of the business revenue going forward.

Dairying requires a large capital investment to get started.

Many farmers start out by taking over the family farm with their parents as the investors. If you have the option to work in a situation that will allow you to

“Operating a dairy farm requires a large investment, especially when you are starting out or trying to grow your business.”

grow in an established business with a purchase option, then somebody else is actually your investor/lender. This will allow you to start to purchase an operation over time. And, while this can be a great opportunity, it requires both parties to have similar goals and a plan that is followed.

Working with other investors requires one to work on joint goals or may involve giving up some control that may initially make you uncomfortable. Even a silent investor may have certain expectations, which could also bring with it new challenges. Future plans or events need to be planned out, and everyone needs to be in agreement. This should be reviewed with an attorney to properly set

up the entity, and also make sure the language is written to put a plan in place if the investors change in the future. All the parties involved need to be on the same page before the arrangement starts and have a clear idea of future expectations.

Increasing the size of the operation through borrowing is a good option where you do not give up any ownership.

Debt increases can be limited by cash flow and purpose for the additional debt. Terms can be adjusted and structured differently depending on the cash flow, type of debt and business plans/projections. Capital obtained through loans, leases or from venture capital firms can appear in different forms,

on or off the balance sheet, but it is important to understand the terms of repayment.

Because a strong working capital is necessary to cash flow the daily needs of the operation, it is important to maintain an adequate cushion of up to 25 percent additional cash compared with debt servicing requirements. The cushion allows for unplanned events that can restrict cash flow and future loan availability.

The advantages of growing the business through your own profits leaves you in control of your business without having any additional responsibilities to an outside party looking for a return on investment or payment required on a loan or lease.

With no debt or very little debt, cash flow requirements may be lower and it may be easier if you change or sell. A challenge might be that, because the dairy business requires such a high capitalized investment, moving to a new technology or increasing the size of the operation may take many years longer to generate the needed capital. For that reason, usually there is some form of additional capital input used to help the purchase or expansion move forward.

Laurie Schetter Sr. Financial Services Officer, GreenStone Farm Credit Services, a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

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Is your farm business crisis-prepared?

Let’s concede right up front that crisis preparation is not a topic that excites most dairy producers. After all, you’re a farmer because that’s what you love–milking cows, growing crops, feeding the world, which already keeps you plenty busy.

You’re probably not as passionate about pulling together a crisis communications team, writing key messages and dealing with the media.

But preparing for a crisis before you face one will help protect your business and ensure you can keep doing what you love. It’s also not as difficult as it sounds.

Creating a crisis preparedness plan The first step is taking some

Being prepared for a crisis before you face one will help protect your operation. On Jan. 29, 2015, PDPW is hosting a workshop on preparing for a crisis and building a proactive communications plan.

time to evaluate your dairy and identify potential

vulnerabilities. What are the physical risks from machinery

and facilities? What about environmental risks from water, wind or manure?

There also are human risks to consider. Do you regularly train and retrain employees on basic safety, acceptable behavior, standard operating procedures, and proper animal care and handling? Are you connected with your community? How do your neighbors view you, your dairy and how you care for your cows?

Other steps to developing a crisis plan include: • Deciding who is on the crisis team: Members could include the farm owner(s), herdsman, veterinarian, nutrit i o n i s t , p l a n t /p ro c e s s o r See PREPARED, on page 8

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Feeding all the high-producing cows not in your daddy’s shaker box In 1989, a dairy producer asked where his herd production should be in 2010 in order to have a sustainable dairy operation that could be passed on to his children. I told him his goal should be a RHA of 25,000 pounds with a 3.6% fat test and a 3.1 protein test. I truly under estimated how our dairy industry would change.

Consider this recent challenge from a dairy producer to me: “I want 100 pounds of milk per cow/day with a 3.6% fat test and a 3.2% protein test.” He wants a herd average of 36,500 pounds per cow and cows that produce 3.6 and 3.2 pounds of fat and protein each day.

You cannot reach those production goals by feeding your daddy’s cow.

To obtain a herd average of 100 pounds per cow/day, peak milk for mature cows needs to

If you want your cows to produce 130 pounds of milk, then they must consume enough energy and protein for 130 pounds of milk.

be 130 pounds or greater. Peak milk for first lactation cows needs to be 104 pounds.

Cows don’t violate the laws of thermodynamics. If you want them to produce 130 pounds of milk, then they must consume enough energy and protein for 130 pounds of milk. This will require a dry matter intake of 65

to 68 pounds per day. For the entire herd to average 100 pounds of milk per day, the dry matter intake must be 55 to 58 pounds.

These dry matter intakes just don’t happen. You need to have good cow comfort, plenty of feed bunk space, put up highly digestible forages and have

information will be communicated, to which audiences, and by whom.

• Writing key messages: This involves basic facts about the farm, as well as statements about the farm’s mission or purpose.

• Determining who will secure your property: Pick a crisis team member to walk or sketch the property to see where others might gain access, and figure out how to prevent it.

• Training employees on the crisis plan: Everyone on the farm

should know who to contact in case of emergency, who is authorized to speak for the farm, and who isn’t.

Speaking of speaking, if you’re ever actually confronting a crisis, the communications rules change.

This is not the time to “tell your story.”

Depending on the situation, you may not need to engage with the media at all. And, if you do: • Acknowledge what went wrong • Share your regret • Take responsibility

plenty of access to good water.

Two nutrients can limit dry matter intake: undigested fiber and too much starch. Undigested fiber contributes to rumen fill. Too much rumen fill will limit intake.

The undigested fiber content of forages can now be estimated: It is called uNDF as a percent of diet DM, and you can request this test on a forage analysis. The higher the uNDF value, the greater the rumen fill of a forage.

If you want cows to consume 65 pounds of dry matter, you need to allocate forages based on their uNDF content.

Highly digestible forages will have a low uNDF content. The goal is to have cows consume 5 to 5.5 pounds of uNDF daily.

Consuming higher amounts of uNDF may limit feed intake.

High-starch diets will limit dry See FEEDING, on page 9

Prepared Continued from page 7

representative, attorney and a communications professional.

• Choosing a spokesperson: Make sure the spokesperson has had media training.

• Making a list of key contacts: This includes names and phone numbers of the crisis team, along with others who should be kept in the loop, such as local law enforcement and regulatory agencies.

• Developing a communications flow chart: Graph how

• Explain planned changes When it comes to keeping the news cycle as short as possible, as one seasoned crisis communications professional says, “Tell it all.

Tell it fast.” In other words, respond quickly and tell the truth, the whole truth and nothing but the truth, including the bad news. If you don’t know, say so, then go find the answer.

Renea Heinrich Counselor, Morgan Myers, a mission sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

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Ag census confirms Wisconsin still America’s dairyland Wisconsin continues to live up to its “Dairyland” title. That’s the word from Greg Bussler, who serves as the state’s agriculture statistician.

Bussler points out that the latest Census of Agriculture data from 2012 revealed that 16.5 percent of all farms in Wisconsin have milk cows. The state also has significantly more dairy farms, at 11,543, than any other state. And we are also one of only two states with more than one million milk cows.

All of that milk means the state is very rich in cheese output.

USDA figures note that Wisconsin processors make more cheese than any other state at nearly 3 billion pounds annually.

“More than 25 percent of all cheese in the United States is made in Wisconsin,” Bussler said.

But, of course, Wisconsin farming is more than just dairy.

The state ranks first nationally in cranberry and ginseng production.

Wisconsin is also the No. 1 state when it comes to corn for silage production.

With just under 70,000 farmers living in the state, these producers farm about 14.5 million acres of land and sold more than $11.7 billion worth of agricultural products during 2012.

Pat Sternitsky US Agnet, a corporate sponsor of PDPW

Feeding Continued from page 8

matter intake by depressing fiber digestion and producing too much propionic acid. There is a negative relationship between fiber digestion and starch content of the diet. Dry matter intake is maximized when feeding moderate starch levels (22% to 26%) with high sugar levels (6% to 8%).

Feeding trials at the USDA dairy forage research station in Madison, Wis., reported optimal fiber digestion when the diet contained 7.2% total sugar.

Starch plus sugar content should be 29% to 33% to optimize feed intake.

Feeding molasses based liquid supplements, customized to your operation, which can include vitamins, minerals, protein and such has been shown to stimulate dry matter intake in diets containing 50% or more forage. In an

11-trial summary, the average increase in dry matter intake was 2.42 pounds compared to diets without liquid supplements.

Molasses improves the palatability of the diet but it also helps to reduce sorting. The reduction in sorting of the diet will lead to a healthier rumen environment for digestion. The increase in dry matter intake will lead to higher peak milk production and greater persistency in the first 160 DIM. To get high milk production, you need high dry matter intakes.

Combining the concept of uNDF and moderate starch diets with the feeding of molasses-based liquid supplements will make higher DM intake possible.

Stephen M. Emanuele, Ph.D. PAS Senior Scientist, Quality Liquid Feeds, a corporate sponsor of PDPW

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Is farm business planning part of your New Year’s Resolutions?

Many of you on New Year’s Eve may have burst out in song with “Auld Lang Syne.” Translated into English, that song title means “long, long ago”—which probably describes the last time many of you would have reviewed your farm’s business plan.

Now that you want to kick 2015 off to a great start, here are several areas to review when assessing your farm’s business plan.

The Strategic Plan. Strategic planning is an organization’s process of defining its strategy— or direction—and making decisions on allocating its resources to pursue this strategy.

As part of your business plan review, defining or redefining your farm’s strategic plan is very important. Your farm’s strategic plan should be developed by: 1) evaluating the current status of the farm (strengths, weaknesses, opportunities and threats); 2) establishing achievable goals and a plan of action; 3) developing a feasibility study which determines the practicability or feasibility of proposed changes; and 4) developing an implementation plan to make the changes effective.

Legal Structure. Today, a farm may be operated as a sole proprietorship, corporation, limited liability company, limited partnership or a combination of these structures. The choice of entity or entities for your farm will often affect three key areas: 1) its valuation for transfer tax purposes; 2) income tax consequences during your farm’s

A farm owner’s business plan should be shared with others and put down on paper.

existence and possible later liquidation; and 3) the overall ownership or management of the farm.

It’s a smart move to review whether or not your farm’s legal structure meets the objectives of your farm’s business goals.

Buy-Sell Agreement. A buy-sell agreement is an agreement which provides for the purchase and sale of ownership interests in the farm at a price determined in accordance with the agreement and upon the occurrence of certain (usually future) events. The events often include divorce, termination of employment, death, disability, bankruptcy or insolvency or an attempted transfer to an outsider.

For those of you in a multiowner farm or who will be in a multi-owner farm in the future, establishing a buy-sell agreement should be considered. In addition, if your farm currently

has a buy-sell agreement, you should review its terms and conditions.

A buy-sell agreement provides certainty concerning the terms on which a retired, withdrawing or deceased or disabled farm owner’s ownership interests will be purchased.

The buy-sell agreement also often provides a source of longterm financing for the purchase of a departing owner’s ownership interests, possibly allowing installment payments to be made out of cash flow.

Several factors should be considered or reviewed when establishing buy-sell terms: 1) the value of the farm’s underlying assets; 2) the financial condition of the farm; 3) the farm’s ability for financing, including the farm’s financial ratios; 4) the relative percentage or other ownership interests of the owners; 5) the ages and health of the farm’s

owners; and 6) the objective evaluation of working relationships between the farm’s current owners and possible future family member owners.

Life Insurance. Life insurance is often used by farm owners to provide funds to purchase the ownership interests of a deceased owner. These life insurances should be reviewed to make certain that they are in adequate amounts, at acceptable premiums, and otherwise on acceptable terms and conditions.

In addition, life insurance is often purchased to provide funds to treat the non-farm children fairly. Because of the unique tax rules involving life insurance, life insurance policies should be reviewed to make certain they are properly structured to avoid negative tax consequences such as the transfer for value rules, gift tax and estate tax.

In the past, a farm owner’s business plan was often in her head and usually only verbally conveyed to a banker at the time the farmer met with the banker to borrow money.

Today, it is more important than ever that your farm’s business plan, through careful consideration and sometimes negotiation, establishes achievable goals and objectives and have fully thought-out agreements and understandings. And, farm owners should, at least annually, review their farm’s business plan.

Troy R. Schneider Twohig, Rietbrock, Schneider & Halbach, S.C., a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

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Teamwork will yield profits We have all heard the old pre-BMR levels. Not surprisproverb, “Two heads are betingly, the dairyman decided to ter than one.” For increasing increase his BMR acres the milk production on one south following year. central Wisconsin dairy farm, “Rather than being satisfied however, it turns out three with where our dairy was proheads are even better. duction-wise, I decided to The south central Wisconreach out to experts and see if sin dairy producer turned to a they could help me find a nutritionist and an agronosolution that could boost promist, asking that the three of duction and make the dairy more profitable,” the dairythem partner to develop a plan that would boost the dairy’s man states. “Many of the businesses we interact with milk production.

The collaboration resulted stand ready to help their cusin the dairy netting an extra Producers should work with their agronomist and/or nutritionist to tomers succeed. Why not use six pounds of milk per cow per determine the operation’s goals and help create planting and feeding them?” day and yielding a more prof- solutions.

John Binversie itable bottom line.

While the nutritionist had plant populations and uniAfter the silage had run out, Dairy Nutritionist, Landprovided the dairyman with form stands. The nutritionist however, the dairy’s milk pro- mark Services Cooperative, a nutrition services for more then suggested that his cus- duction dropped back to corporate sponsor of PDPW than 15 years, the solution to tomer do some testing. the dairyman’s challenge “Feed it for a few months INCREASE YOUR PROFITS! came about when and see what Now is the time to upgrade your TMR with a NEW Cloverdale Vertical TMR Mixer!

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12

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Time to make plans for 2015 With most of the busy holiday season behind us, it’s a good time to reflect on 2014 and plan for where you’d like to go in 2015. So let’s start the year off right! Here are a few tasks and goals to include in your 2015 list: 1) Complete production and yield reports. This is critical for both your crop insurance coverage and FSA programs. Complete these reports sooner rather than later while harvest is still fresh on your mind. Crop insurance coverage decisions for 2015 will be needed before spring. Contact your insurance specialist to discuss what has changed and what is unique for 2015.

2) Contact your local FSA office for details on the new Farm Bill. With the 2014 Farm Bill released, changes are in place for both milk and crop programs.

The deadline for the DMPP program has now passed. However, the crop programs have also changed and you will need to see what options best fit your farm.

3) Document feed and crop inventories, dairy livestock numbers and other assets for your balance sheet. December 31 is the effective date for most balance sheets. So, in case you did not spend your New Year’s Eve completing your balance sheet, put it on your list of things to do very soon! It is easier to complete now rather than trying to backtrack later.

An accurate year-end balance sheet is a vital document for you and your lender to track your

financial progress. Remember to document any pre-paid expenses so they show up on your balance sheet and it will be used to complete your accrual earnings.

4) Update accounting and bookkeeping records. It’s time to close the books on 2014 and open up 2015. Completing the year end and keeping as up-todate as possible will assist in future planning. Organize your office and files to be prepared for upcoming meetings with your tax preparer.

5) Prepare a 2015 budget.

With the close of 2014, you have current records to assist in projecting your cash income and expenses for 2015. Due to the expected lower milk prices in 2015, it is crucial to determine what your costs will be in 2015.

Key expenses such as feed and fuel will likely be lower. And

remember to consult your nutritionist and agronomist for feedback on estimated projections.

6) Meet with your lender.

The first quarter of the year is a good time to meet with your lender to review your balance sheet, 2014 earnings and your 2015 projections. In other words, it’s a time to look back and a time to look forward.

Discuss with your lender your plans for your dairy farm. What machinery replacements and building improvements will be needed? Will the neighboring farm be coming up for sale? Have your estimates or bids organized and prioritized for your meeting.

7) Invest in yourself and your key employees. More knowledge leads to better decision making, so take the time to invest in yourself and those key partners in your business by

attending educational meetings this winter. Many opportunities are available with excellent speakers, specific issues and timely topics.

The dairy industry is in a constant state of evolution and change, and it’s necessary for dairy farmers to also evolve and change to remain competitive and profitable. In addition, it’s enjoyable to see other dairy farmers and industry people at these events.

In closing, there is a lot to look forward to in the New Year and with a little extra planning, it will help prepare you for a successful 2015. Cheers, with a glass of icecold milk, to a great New Year!

Mary Elvekrog Dairy Lending Specialist, Badgerland Financial, a mission sponsor of PDPW

One way to “improve yourself and your employees” in 2015 is to attend PDPW’s 2015 Business Conference, March 18-19, in Madison, Wis.

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14

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

A dairy nutritionist’s role in calf and heifer growth and health On dairy farms, it is said there are five rations: 1) The one on paper (or computer) 2) The one delivered to the cow/heifer 3) The one the cow/heifer eats 4) The one digested and utilized by the rumen microbes 5) The one digested and utilized by the cow/calf/heifer This is true for all animal groups being fed on the dairy including preweaned and weaned calves, breeding age heifers, bred heifers, springing heifers, dry cows and lactating cows. The dairy’s nutritionist and/or veterinarian may be responsible for all of these groups, just the lactating cows or any combination of groups.

It is absolutely critical that t h e re i s co m m u n i ca t i o n between the owner, nutritionist, veterinarian, herdsperson and other management team members. When team members share information, it allows for a smooth transition from one group to the next group of animals. A seamless transition helps keep the animal on the path to success. The number one purpose of nutrition is animal health, with production needs—be it milk, protein, fat, reproduction, or growth—being met after maintenance and health needs are satisfied.

Research on calf and heifer growth and its effect on breeding age, calving age and milk production shows a positive response to biological normal growth. Good sources for

Many dairy farms have five rations: 1) The one on paper (or computer); 2) The one delivered to the cow/heifer; 3) The one the cow/heifer eats; 4) The one digested and utilized by the rumen microbes; and 5) The one digested and utilized by the cow/calf/heifer.

guidelines on setting goals for an individual dairy farm are Dairy Calf and Heifer Association, Penn State Extension or any other university extension website.

Every calf should start their life with high-quality (IgG>50g/l), clean (bacteria in colostrum reduces IgG absorption rate) colostrum at 10% of their body weight within the first two hours after birth. The second feeding of their life should also be colostrum. The third through the sixth feeding can be colostrum, the second and/or third milking from the cow or a mixture of all three products.

Milk from the second and third milking contains higher milk solids, protein, fat and Vitamin A than milk from later milkings. Calves should be fed whole milk or a milk replacer that will provide the needed

nutrients for maintenance and the desired rate of growth to obtain biological growth that meets the goals set for the dairy. A good quality textured calf starter of 22% to 26% protein should be added by Day 3 to 5, with fresh feed every day. You should work with the herd nutritionist and veterinarian to balance a ration and employ best management practices for each group of animals on the dairy.

Epigenetics, in simple terms, is the environmental impact on the expression of genes, without changing the DNA sequence of the genes. In the fetus, this is called fetal programing—where the environmental stimulus or insult on the dam has effects on the fetus, in turn affecting that offspring’s health and production later in life.

From conception to delivery, the fetus is continuously

growing, with 75% of physical size in the last two months. The growth early in development is when organogenesis is occurring in the fetus. It is also when the caruncular area of the uterus and the placenta are developing the maternal-fetal vasculature that is essential for oxygen and nutrients to the fetus from the dam. This is of particular importance from the time of placenta attachment at 90 days to the needed blood flow increase from 120 days to term.

Systems that are impacted include respiratory, digestive (colostrum absorption and scours), reproductive efficiency, weaning weight, muscle growth and development and adipose deposit (marbling, back fat and brown fat in new born calf).

Nutrition—providing adequate protein, energy, vitamins and minerals—as well as not over conditioning animals and always having fresh, clean water available have positive effects on fetal programing.

Other environmental factors include heat (cooling dry cows), cold, wet and/or windy conditions, cow comfort, low stress handling, pen moves, vaccinations, and any other factors that would cause transient decrease in maternal nutrition.

Nutrition, health, comfort and management are all tied together to serve the animals best interest.

Dr. Rich Ernsberger Westway Feed Products, a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

15

Take a team approach to navigating the transition The transition period represents the time in the dairy cow’s life with the greatest opportunities and yet the time with the greatest potential consequences.

During no other time is there more at stake. How a cow comes through the transition will ultimately impact performance and profits in this lactation and future lactations.

To make the most of the transition period, it takes all members of the dairy team—including the nutritionist, veterinarian and herd manager—to work together toward a common goal of a healthy, productive herd.

Working toward solution-based outcomes When it comes to the transition pen, the first step is

identifying herd challenges, goals and desired outcomes so protocols can be implemented to monitor ongoing performance.

For example, a dairy that identifies ketosis as a challenge will be focused on finding the cause and developing a plan to minimize its incidence. One tool they may elect to use is BHBA monitoring, a simple blood test that can identify subclinical ketosis in fresh

cows.

By creating a protocol, the team can routinely monitor fresh cows for ketosis and more quickly identify a rise in incidence to allow for adjustments to feeding and management practices.

In many cases, identifying the desired outcome is the f i rs t s te p. O n c e a d a i r y knows the final outcome they wish to achieve, the team can work together to

put action plans in place. For these plans to be successful, t h e wh o l e tea m m u s t b e involved in the discussion and work together to determine the path forward.

Lay the groundwork for transition success The communication among team members is the basis for See TEAM, on page 16

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16

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Solving the riddle of record keeping From the comic book character the Riddler, “If you break me, I do not stop working; if you touch me, I may be snared; if you lose me, nothing will matter. What am I?” Questions and more questions. Life seems to be full of questions, plenty for just one individual but add a family and more shortly follow. Run a farm, add some cows and employees to the mix and, brother, hang on! They’ll never stop.

Can you relate?

In addition to the typical farm questions, consumers are becoming more concerned and involved in the udder-to-glass process. So now, not only do you have your questions needing answers, but others are showing up at the barn door asking additional questions.

We’re talking about questions asked by individuals who may not always be motivated by curiosity, but rather driven by an anti-agricultural agenda.

Sometimes you might not be able to tell if they are a helpful

Probably the best — and maybe the most difficult — gadget we need to add to the tool box to answer questions — and be the hero — is good record keeping.

When setting out a plan and path using written protocols for animal handling and treatments, your veterinarian, your nutritionist or your Extension agent are great sources of help.

Jim Gordon friend or a mortal enemy, the Joker.

In order to find answers, it often seems as if this world needs a superhero, a Bruce Wayne or a Peter Parker. Well, Bruce, there may be some good news and some bad news for you.

Good news is you don’t need a bat cave or shiny tights to be the hero. Bad news is you may need to change where you spend your time and increase the number of gadgets on the farm.

Probably the best—and maybe the most difficult—gadget we need to add to the tool box to

a real problem. Allow the fresh cow managers to openly share what they’re seeing with the nutritionist and veterinarian, so they can be aware of how cows are responding to the ration and implemented management practices.

• Have protocols in place.

Talk through the protocols in place with the fresh cow managers, herd manager, nutritionist and veterinarian. Review these protocols and discuss how they are implemented and what improvements can be made so they are most effective.

As part of the meeting, conduct hands-on training so everyone is on the same page when it comes to executing the protocols, recording interventions and reporting findings.

• Communicate frequently.

Dairy nutritionists and veterinarians who have been most successful in the transition pen point to ongoing dialogue as one of the key factors. As soon as one party identifies a potential issue, they call the other to discuss it, even if a team meeting is weeks away. In many cases, this proactive approach

answer questions — and be the hero — is good record keeping.

Sorry if you were expecting a bite by a radioactive spider or becoming adopted by Wayne Enterprises, therefore providing unlimited resources. The reality is good record keeping can give a boost to your operation and identify (maybe not unlimited) new resources to increase productivity, answer your questions about individual animal productivity and build trust with consumers. It will also empower you to silence the critics of animal agriculture.

Written protocols for animal See RIDDLE, on page 17

Team Continued from page 15

success in navigating the transition period. Working together allows for open dialogue and idea sharing, without the pointing of fingers or placing blame.

To make the team most effective in the transition pens, implement the following practices: • Host routine meetings.

Have a standing meeting on the calendar where the team members can discuss any issues they’ve seen in the fresh cow pen, and address their concerns before they become

prevents significant problems later on.

• Keep focus on the transition. With such a lasting impact on herd productivity and profitability, keep the transition period top-of-mind as you make changes on the dairy. Even when the challenge areas seem few, routine monitoring and goal setting is imperative for success.

Dr. Joel Pankowski Field Technical Services, Arm & Hammer Animal Nutrition, a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

17

Riddle Continued from page 16

handling and treatments are a good place to start. Setting out a plan and path will help you interpret the data coming out of your record keeping system. This is where your sidekick can come in, you can call them Robin. The role of Robin can be played by your veterinarian, your nutritionist or your extension agent. Their years of schooling and practical experience will aid in developing these documents for benchmarking results and interpreting data.

Next is bringing in gadgets of data collection. Great technology advancements are being made to capture animal behavior and employee behavior.

For your cows, cattle monitoring systems through electronic pedometers can give you indication of active heats for breeding, health status for treatment and general cow comfort to evaluate cow density and bedding options.

For employees, there are new check-in/check-out drug inventory monitoring systems. These systems aim to help producers monitor drug use on the farm and will provide visibility to inventory shrink and a convenient way of applying treatments to individual animals.

Finally, it’s about analysis. This is a combination of using the gadgets and taking time to seek the answers.

Multiple programs exist from various software vendors associated with data collection. Cow monitoring software, herd management programs like DC305 to PCDart, and other homemade versions using Excel will help gather data for review and organize information to be translated into actionable items.

Here again, hero, you’re not alone. Go back to your sidekicks and have them help interpret

data. Your veterinarian is a good source to help you understand the correlation between data and needed actions to improve health and decrease costs.

A good record keeping system will help you answer your questions and those posed by others, regardless of motivation. In its essence, the system will inspire trust in your management decisions, driving costs down and building consumer confidence.

Oh, yes, the answer to the riddle. Did you come up with it? It’s trust. If we lose it, nothing else will matter.

Dan Ellsworth A N I M A RT, a c o r p o ra t e sponsor of PDPW

Join today!

Three types of membership Dairy Farm Member One membership per dairy entity covers all managers, spouses and employees. While each dairy entity has one vote, every person within the dairy—operator, spouse and employees—enjoys the member rate when attending events.

Associate Member Membership is open to any individual interested in the dairy industry. This is a non-voting membership. Associate members enjoy the member rate when attending PDPW events.

Corporate Member Open to any group, company or organization interested in the dairy industry. This is a non-voting membership.

This membership qualifies every employee within your organization for the member rate when attending PDPW events.

To learn more or to join PDPW, call PDPW at 800-947-7379 or go to www.pdpw.org.

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18

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Dairy industry contributes more than $43.4 billion to Wisconsin’s economy This past September was an exciting month for the Wisconsin dairy industry as new numbers revealed just how big of a deal dairy cows are to Wisconsin’s economy.

The UW-Extension released its full report in September on the Economic Impact of Wisconsin Agriculture, based on the 2012 USDA-NASS (National Agricultural Statistics Service) Agriculture Census, and, according to the report, agriculture has an $88.3 billion impact on the state’s economy—up from $59 billion in 2007.

Wisconsin’s dairy industry is the largest sector of agriculture and accounts for nearly half of the total economic impact contributing $43.4 billion in industrial sales to the state’s economy. That’s an increase of 63.7 percent.

The study, authored by Steven Deller, a UW-Extension community development specialist and professor in the UW-Madison agricultural and applied economics department, is a follow-up to a previous study published in 2009 using 2007 data.

According to the study, despite the combined effects of the drought of 2012 and the Great Recession, agriculture remains a critical component of Wisconsin’s economy. The study highlights the overall strength of the dairy industry and the role it plays in fueling the state’s economy, particularly growing industry segments which include creamery butter and dry, condensed and evaporated dairy products.

Through diverse industry segments, it is clear dairy contributes more to Wisconsin’s state economy at $43.4 billion than citrus does to Florida, $9 billion or potatoes to Idaho, $6.7 billion.

With Wisconsin’s 1.2 million cows pumping economic life throughout the state, it is clear why dairy would be the largest contributor to the state’s economy.

If you were to look at how much each Wisconsin dairy cow generates, the numbers are astounding. The average Wisconsin dairy cow generates $34,000 a year in economic activity, which is then circulated back into the community through local schools, safety services, roads, retail activities

and on and on. In fact, the dairy industry fuels the state’s economy at more than $82,500 per minute.

The study also indicates 78,000 jobs in agriculture are generated by the dairy and food processing sectors, or about one in 10 people working in Wisconsin hold a job related to this key industry. These jobs include farmers, their employees and those providing them with goods and services—veterinarians, crop and livestock consultants, feed and fuel suppliers, equipment dealers and lenders—as well as those employed in equipment manufacturing and food processing. That agriculture has grown 50 percent in terms of its total economic impact over a five year period is

impressive, and is due in part to the hard working individuals who produce quality products for markets here in the United States and abroad.

“Dairy continues to flourish as a strong and vital industry in our state,” said James Robson, CEO of the Wisconsin Milk Marketing Board. “As an organization, we are honored to promote and serve the many dairy families and businesses that help generate $43.4 billion dollars for the Wisconsin economy.”

It is because of organizations like PDPW and others that support producers and industry professionals who share the common bonds of dairy and are committed to continuing education of producers and industry professionals and promotion the state’s award-winning dairy products. Development and innovation will continue to fuel the industry, which will allow Wisconsin to maintain its presence as a leader in the dairy industry moving forward.

The full report “Contribution of Agriculture to the Wisconsin Economy: Updated for 2012” is available at http://wp.aae.wisc. edu/wfp/contribution-of-agric u l t u re - to - t h e -w i s c o n sin-economy.

Additional Wisconsin Infographics and other statistics are available at www.dairydoingmore.org/economicimpact/ statistics/infographics.

Patrick Geoghegan Wisconsin Milk Marketing Board, a mission sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

19

Instilling a culture of care: What does it look like from the cow’s perspective?

Culture on a dairy farm is not something we often think about. A dairy farm is a very busy place, and we are often preoccupied with all the work has to be done.

There are real differences in how dairy farms operate, the way that they look at cows and the role the cow has on the farm. We are all aware of recent publicity that has shown some dairies in a very poor light.

How do dairy producers build a culture that puts the cow’s well-being first?

The first step needs to involve a bit of self-examination. In “Start with Why” Simon Simek writes about how successful companies and leaders have a very clear purpose or “why.” We all know “what” to do and “how” to do it, but, if we don’t clearly focus on “why” we are in the dairy business, then the best SOPs in the world won’t be worth the paper they are printed on.

What is the “why” on your d a i ry ? Do yo u l ive yo u r “why”?

If animal care is a core principle on your dairy would you fire a person (even your relative) that you found not following your standards? Do you have a standard? Does your “what” and “how” on the dairy match up with your “why”? If animal care is your “why” how quick are you to attend to a lame cow? Do we do it today or do we wait till the vet or trimmer gets to it?

Employees can figure out

Being true to your “why” will make your dairy a great place with happy, healthy cows and people the real “why” of a dairy pretty quickly. Is the boss just paying lip service or do they really believe in what they preach? Martin Luther King didn’t have SOPs; he had a dream.

Cows are very responsive to the care which they receive.

The better we care and feed them, the better they take care of us.

Today’s modern dairy cow still has many of the same characteristics as the first domesticated cattle. They are still prey animals and, as such, need to be treated differently than predator animals such as humans.

So people might misread cows and give them human characteristics. If not familiar with how cows react, a person might think they are dumb brutes, uncooperative and unwilling to change—when in fact, they are smart, sensitive, cooperative and willing.

If you want to be successful w i t h c ows, yo u n e e d to understand how they think and work. Many of the principles of low stress livestock handling were first described

by Bud Williams and have been incorporated into many training programs currently available in the industry.

So what do cows want?

They need a quality consistent ration, a comfortable place to rest, freedom from pain, injury and disease, the ability to express normal behavior and to be free from fear and distress. How we manage our dairies and the people that care for the cows has everything to do with meeting these needs.

To instill a culture that puts

the cow’s well-being at the center requires that we first know ourselves. Why are we in the dairy business? If cow care is not the first priority of the people that are in contact with your cows, you need to hire people who are.

As a leader of your dairy, you get to set the culture of your business. Being true to your “why” will make your dairy a great place with happy, healthy cows and people.

Floyd Sutton Key Account Manager, Zinpro Performance Minerals , a mission sponsor of PDPW

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Position your operation as interest rates rise

Will 2015 be the year the tide turns for interest rates?

The dairy industry has recently enjoyed an incredible period of low interest rates.

Regardless of rate product—be it fixed or variable, low rates have been a great benefit for producers who rely on credit lines for operating need, or who have invested in new facilities, equipment or land with longer-term loans.

The Federal Funds rate—the short-term interest rate set by the Fed and upon which other short-term U.S. interest rates are based—has been effectively zero since 2009, during the days of what was termed the financial meltdown on Wall Street. With the economy slowing improving, the likelihood of higher interest rates is increasing as the Fed begins to change their policy.

Now is a great time for dairy farmers to understand and manage the effect of rising interest rates for their business.

Cost of borrowing expected to rise There is growing consensus by economists and lenders alike that the cost of borrowing is expected to begin to rise during the middle of 2015 or early 2016.

No one knows for sure when the Fed will raise interest rates. Once it is decided, policy change is needed to keep inflation at bay and the Fed will begin a series of rate increases.

As the accompanying Federal chart indicates, there is clearly

only one way for rates to move: up. And that begs the question, “By how much?”

The amount increase rates increase will depend on the rate of inflation and unemployment.

The Fed has a 2% target for inflation and, as long as inflation remains close to this target, then most economists believe the Feds would raise rates more slowly than in the past. The key factor is the unemployment rate, which currently has fallen below the Fed’s 6% target to 5.9%.

Some level of concern still remains that there is slack in the labor market, which is why the Fed is holding off until mid-year 2015 to raise the funds rate.

Manage financial risk There is no time like the present to consider the benefits of locking into low fixed rate products.

Fixed rate loans provide

borrowers certainty with established monthly payments and value by paying lower rates over the full term of the loan. This is a well-founded risk management strategy for producers since we know other operating costs are sure to be volatile and will likely reduce their revenue.

Another way for producers to benefit from today’s bargain on interest rates is to take advantage of lender programs to refinance farm machinery they paid for in cash over the last couple years.

This could be a great way use three- to five-year fixed rate programs and build up working capital at reasonable rates preparing producers for the uncertainty that lies ahead for 2015 and beyond.

Producers should not forget about cash management options when considering ways to reduce interest costs. One way is by selecting a lender that offers

a revolving line of credit combined with a cash management account.

The key benefits of this approach to cash management are: business receipts directly delivered to the revolving line of credit, minimizing loan balances and reducing interest costs.

Additionally the investment feature of these accounts earns interest at rates very comparable to short-term CD rates.

Whether it’s margins, cost of production, farm policy or interest rates, dairy producers are constantly dealing with change. Understanding your operation, the options available to you and managing risk effectively, will help you position your operation for long-term, steady success.

Greg Steele Vice President and Industry Specialist, AgStar, a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

21

Watching our greatest investment grow Dairy farmers are among the most savvy, watching their bottom line when it comes to margins, milk quality and production per cow. And, while the year 2014 yielded record high milk prices, there’s a particular investment that might be just as—or more important—than just dollars and data.

That investment is in people of this great industry: the researchers, the crop consultants, the milk marketers, the farm broadcasters and, most of all, the new generation of dairy farmers.

Young dairy farmers are among the minority in this age-old industry. Often criticized by their city counterparts and applauded by their rural leaders, they hold the future in their hands, on the edge of their plows and at the brim of their bulk tank.

For obvious reasons, they are an important part of this industry as we look to the future.

They are the ones to be the innovators and progressive thinkers, looking for ways to improve their farm and provide for their future. They’ll test products and protocols, and share with other farmers how to boost their bottom line. They’ll forever change the way dairy farming works, and they’re already beginning to.

It’s not just the way these young farmers will do dairy in the future. It’s the way they’ll be involved in industry organizations and serve as leaders. The investment most important here is not innovation, it’s the progressive thinking behind these young, future leaders.

Fortunately for them, opportunities abound for ways to get more involved in developing dairy policy, promotion initiatives, industry standards and so

Young producers learn more than how to raise cattle, care for youngstock and work the land. They also learn the values of being a dairy farmer and what it means to be a part of this industry.

much more. These opportunities come in the form of young producer groups formed by cooperative boards and agricultural organizations.

Most of these young producer groups are fairly new to the industry, when it was first realized a few years ago the value that younger farmers have for the future of agriculture.

Farmers and young professionals participate in these groups for various reasons. Some are looking to make friends, near and far. Some are looking for new ideas on how to improve their operation, and they are hoping to hear real experiences from other farmers. Others might simply be looking for a way to get more involved in an industry they love.

Whatever the reason, bringing these individuals together creates a great opportunity. They have new ideas they bring to the table, and fresh ways of thinking.

They challenge the way things have been done simply to understand if it’s still the right way of doing things.

Given the right circumstances and strong support from other leaders in an organization, these bright ideas can take hold and grow into greater opportunities

in the future.

Before these younger producers become the leaders within an organization, they first get to work alongside their current leaders.

This is a chance to learn the way things currently happen, what challenges are present and which

ones are anticipated to come. More importantly, it’s a chance to share values and ethics, ensuring values are never compromised.

Education is their most powerful tool, and they are eager to learn and ask questions. In fact, having that sincere curiosity is their greatest asset. Bring them with you to industry events and chat with these young producers about their opinions. Share ideas that never came to fruition and see if they can be reinvigorated.

It’s a fairly simple concept: the best way to stay green in this age-old industry is to keep learning, to keep asking questions of your generation and the next.

Julie Martin Director of Communications and Marketing, FarmFirst Dairy Cooperative, a corporate sponsor of PDPW

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

U.S. vs. international dairy prices, Dec. 2014 While U.S. dairy product and milk prices have remained strong through November when compared to international prices, recent downward price convergence has been experienced.

Continued forward month convergence into 2015 could potentially result in significant declines in domestic dairy product and milk prices.

Butter prices Of the three component prices used in formulating Class III milk prices, U.S. butter prices experienced the most significant divergence from world prices leading up to the fourth quarter of 2014.

From June to September, U.S. butter prices increased 35.8% while average Europe and Oceania butter prices declined 20.8% over the same time period. When adjusting Europe and Oceania prices to the U.S. standard 80% butterfat, the divergence in prices at the end of September created a $1.55/lb. spread between U.S. and average international butter prices, a 10-year high.

Since September, international butter prices have continued to decline, but at a far lesser rate than domestic prices. Average Europe and Oceania butter prices declined 3.3% from September to November while domestic butter prices have declined 34.9%.

CME futures and GlobalDairyTrade (GDT) butter prices suggest that convergence between domestic and international butter prices is expected to continue into 2015, driving down the U.S./ international butter price spread to less than $0.45/lb.

Cheddar cheese prices U.S. cheddar cheese prices also experienced significant divergence from world prices leading up to the fourth quarter of 2014, although not to the extent of domestic butter prices.

U.S. cheddar cheese prices increased 25.8% from June to September while Oceania prices declined 14.0% over the same time period. The divergence in prices at the end of September created a $0.64/lb. spread between U.S. and average international cheddar cheese prices, also a ten year high.

Since September, international cheddar cheese prices have continued to decline, but

at a far lesser rate than domestic prices. Oceania butter prices declined 3.8% from September to November while domestic cheddar cheese prices have declined 24.7%.

CME futures and GDT cheddar cheese prices suggest that the spread between domestic and international cheddar cheese prices is expected to remain at levels far below those recently experienced into 2015, with U.S./international cheddar cheese price spreads just north of $0.25/lb.

Forward Class III milk price projections Forward month butter and cheddar cheese price gains experienced in recent GDT

auctions have also led to a significant convergence in quarterly calculated international and domestic Class III prices.

When calculated in September, 2015 quarterly international Class III prices averaged $13.69/cwt while the U.S./ international price spread averaged $4.07/cwt. When calculated using current November figures, 2015 quarterly international Class III prices have increased to an average of $14.30/cwt, with the average U.S./international price spread being reduced by over 40% to $2.34/cwt.

Although this convergence has resulted in recent declines in domestic Class III prices, calculated quarterly international prices remain significantly below domestic levels.

If price convergence continues, U.S. Class III milk prices could fall to levels considerably closer to the $14.50/cwt range.

Authors’ Note: The information and comments contained herein are provided as general commentary of market conditions and are not and should not be interpreted as trading advice or recommendation. The information and comments contained herein are not and should not be interpreted to be predictive of any future market event or condition. Information contained herein is obtained from sources believed to be reliable, but cannot be guaranteed as to its accuracy or completeness.

Carl Babler, Will Babler and Luke Strub Atten Babler Commodities LLC, a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

23

Are you contemplating robotic milking?

Whether you’re looking for a more flexible work schedule, hoping to focus on cow management or want to bring the next generation into the dairy industry, there is much to learn and understand about robotic milking.

Over the last year I’ve been on a mission to dig deep into the minds of up-and-running robotic milking producers and producers contemplating making the jump. I wanted to know the pros and cons from the current operators as well as the questions still lingering in the heads of the undecided producers.

Here is a list of pointers from producers who have entered into robotic milking over the last year, plus some important steps taken when deciding if

robotics was for them.

Do your research. There are multiple different brands, makes and models of robotic milking systems, and each carries its own special feature that sets them apart from the others.

One robotic brand may have a feature that will accommodate your needs more than the next operator’s needs. Some examples would be the underbrush vs. the teat cup for washing, an under arm vs. a table, a flush floor in the robot vs. no flush floor.

Is there a dealer close by?

This is very important because should something go wrong, you need quick service so you don’t have a long down time on a robot.

Tour some up-and-running facilities and make sure these

operations have been running full speed for a good couple of months.

While a new facility is always exciting to see, the operational end of things may still have some kinks to work out. While on tour ask a lot of questions, including. . .

• Average milk time?

• Production level?

• Fetch rate?

• Entry rate per day, per cow?

Work with an experienced builder who has experience not only in robotic facilities but also in the construction and dairy industry. You might want to ask if the salesperson you interact with has been in the farming and construction industries for a significant amount of time and understands the full picture.

Every producer that I have spoken with who is milking with a robotic system has told me the key to a successful robotic dairy is cow management.

As the producer, you can gather a lot of information about your cows through excessive amounts of data compiled from the robotic computer system. Knowing how to read this data, analyze it and act on it is the key to a successful robotic milking dairy.

Using the system as a management tool gives you the ability to focus on the science of each cow individually.

Once your robotic milking system is operational, you will quickly learn how one small See ROBOTIC, on page 24

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Keeping corn silage hybrid selection simple Each year key decisions are made on a dairy farm influencing the dairy operation’s success and profitability for the next year. One of these decision areas revolves around the planting, harvesting, storage and feedout of corn for silage.

The first step towards success with corn silage is hybrid selection.

A recent University of Minnesota study (Coulter, J. Univ. Minn.

Extension) looking at management decisions which make a difference in corn production ranks corn hybrid selection as the No. 1 agronomic factor. Hybrids can account for 37% to 64% of the impact on yield of corn.

Corn silage hybrid choices are abundant, as are the philosophies around hybrids designed for silage.

The mix of ideas around what makes a good corn hybrid for top animal production is often confusing. Measuring the value of corn silage is complicated due to the series of event which occur from planting through harvest and feedout. Often a decision about the success or failure of a corn silage hybrid has little to do with field performance and more to do with kernel processing and post-harvest ensiling or feeding.

Trying to clear the fog around corn silage hybrid choice starts by figuring out what factors are controlled by genetic choices versus other environmental influences. At the end of the growing season, only a few factors play into how a corn silage hybrid “performs.” For the

The first step towards success with corn silage is hybrid selection.

Hybrids can account for 37% to 64% of the impact on yield of corn.

most part, these key factors are related to agronomics.

Factors which make for high-yielding corn grain production also influence forage yield and quality of corn for silage. Selecting hybrids with good stand establishment, standability, drought tolerance and disease resistance all drive corn performance for silage. These hybrid performance factors all help to increase total yield of leaves, stalks and husks as well as the grain (starch).

Things start to get muddled when thinking about factors that influence energy content and energy availability of the corn forage when fed to milk cows. At the end of the day, you want corn hybrids that consistently deliver the highest energy to the feed bunk. So the question is what quality or nutritional factors influence energy

production of silage?

Nutritionists have to balance dairy rations primarily by using the forages and grain grown on the farm. They need both fiber and grain to make the cow’s rumen work optimally. Corn silage delivers both grain and fiber at the same time. Having highly digestible fiber and grain is key to driving animal intake and performance.

How much will corn hybrid genetics influence these factors? To determine this, we need to understand the genetic range of two plant characteristics, starch content and fiber digestibility.

University studies show the range of fiber digestibility to be relatively small among non-BMR hybrids. In typical corn silage hybrid trials, there is a range among all commercial entries of four to six units of fiber digestibility. On the

each cow to obtain her best production.

Only you can make the decision what is right for your facility when it comes to deciding on

robots or a conventional milking parlor. At the end of the day, the person running the operations is what will make or break a successful farm.

other hand, the variability for starch content is much larger. In addition to top silage yields, the top performing corn silage entries have consistently high starch content and high fiber digestibility. These are the measurable factors which most influence animal performance and drive profitability.

More recently, discussions around starch digestibility have surfaced. University of Wisconsin researchers have concluded that starch digestibility differences do not exist among corn hybrids when harvested as corn silage and properly processed and fermented.

In addition to genetic variability, corn silage producers and nutritionists need to deal with the impact of weather and other environmental influences on corn silage digestibility. Often the year-to-year differences are credited to corn genetic differences.

The reality is that rainfall patterns and temperatures along with soil type, previous crop, fertility and other management factors have a great influence on every hybrid planted.

Keep your corn silage selection process simple. Start with great agronomics, look for top end silage yield and starch content and then look for above average fiber digestibility. These are the key factors driving success with corn silage.

Daniel Wiersma Livestock Information Manager, DuPont Pioneer , a corporate sponsor of PDPW

Robotic Continued from page 23

adjustment in feed can change each animal’s production.

Through much experimenting, you will also learn how to feed

Ashley Ambrosius Agriculture Business Development, Bayland Buildings, Inc., a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

25

Not all calcium supplements are created equal A dairy cow’s ability to maintain normal blood calcium concentrations is challenged during the start of each new lactation. With milk, including colostrum, extremely rich rich in calcium, cows must quickly shift their priorities to adjust for this sudden calcium outflow.

Subclinical hypocalcemia affects about 50% of second and greater lactation dairy cattle fed typical pre-fresh diets.

The main economic problem associated with subclinical hypocalcemia is lowered milk yield, with the loss in milk yield beginning at higher blood calcium concentrations than previously suspected, noted Dr. Garret Oetzel, University of Wisconsin, in a presentation at the 2013 Tri-State Dairy Nutrition Conference. Research now shows that negative effects from subclinical hypocalcemia starts whenever blood total calcium concentrations drop below about 8.5 mg/dl.

At calving, oral supplementation is generally the best way to replenish a standing cow’s drop in blood calcium. Your product choices are nearly endless, and there are almost as many forms of administration as there are breeds of dairy cow.

But you should know that not all calcium supplements are created equal.

Always read the product label. Without reading the product label, you could mistakenly purchase a calcium supplement that is difficult to administer or one that has little to no impact on a cow’s calcium level.

The most common forms of calcium supplements are boluses, drenches, pastes and

must be given to avoid aspiration pneumonia.

Calcium chloride is rapidly absorbed and invokes an acidogenic response that allows the cow to mobilize more of her own calcium from bones. A study by Dr. Jesse Goff showed that six hours after administration of 50 grams of calcium from calcium chloride, calcium levels will still be at 9 to 10 percent over baseline1.

Ask your veterinarian to review your fresh cow calcium supplementation program to ensure your protocol is biologically and cost effective.

At calving, oral supplementation is generally the best way to replenish a standing cow’s drop in blood calcium. A key challenge, however, is choosing a product that has the right types of calcium.

gels. Boluses easily rise to the top in terms of ease and safety of administration.

A key challenge is choosing a product that has the right types of calcium.

The three most common forms are calcium carbonate, calcium propionate and calcium chloride. Let’s look at each of these choices a bit closer.

Calcium carbonate’s reputation for efficacy is rocky at best, because that’s exactly what it is: ground rock. In a presentation at the 2013 Tri-State Dairy Nutrition Conference, Dr. Oetzel reported that “calcium carbonate in water did not increase blood calcium concentrations at all.” Calcium carbonate has been shown to be poorly absorbed and is also alkalogenic, meaning it could hinder the mobilization of calcium from other sources, such as bone.

Calcium propionate is not acidogenic: It doesn’t support mobilization of bone calcium.

While calcium propinate absorbs faster than calcium

1 Goff JP. The monitoring, prevention, and treatment of milk fever and subclinical hypocalcemia in dairy cows. Vet J. 2008 Apr;176(1):50-7

carbonate, it is often given as a liquid, and drenching or pumping liquids can be challenging.

If calcium propionate is administered orally, special attention

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Achieving 10-ton alfalfa is possible A lot of different factors go into a good hay crop. Good ground, good seed, good weather and a little good luck all help contribute to unlocking the full yield potential of your farm.

While 10-ton alfalfa is a high yield target for many farmers, following some key management practices can make that goal realistic.

1) Select the highest yielding seed. The way to maximize your crop is to start with an alfalfa variety that has the highest yield potential available.

University trials, local yield data and on-farm trials are great sources of info to find the best yielding genetics. Areas you should investigate include knowing what diseases to expect pressure from and which varieties will offer protection. In addition, shopping simply for the lowest price alfalfa seed can have negative ramifications, as a yield difference of only .2 tons/ acre allows growers to pay $100.00 more for a bag of seed and break even in the first year if hay is worth $180.00 per ton.

(Assumes 18 lbs./ acre seeding rate, which gets you 2.78 acres per bag.)

2) Implement a soil testing program. A soil test provides the basis of knowledge needed to make other management decisions for each field. Your soils should be tested at least every other year and, if needed, lime applied at least one year before alfalfa establishment to bring your field’s pH between 6.5 and 7.0.

To replenish nutrients that are removed from high yields, fertilizer should be applied each year. After all, 10 tons of alfalfa removes 580 lbs. of potassium

When you follow key management practices, 10-ton alfalfa might be closer than you think.

from the soil, which needs to be accounted for in the fertility plan. Split applications ensure proper nutrients are available all year, especially going into fall.

Other nutrient levels such as sulfur, calcium, magnesium and boron levels should be corrected before problems occur.

3) Focus on establishment.

Good seed-to-soil contact is a must.

A field should be worked in several directions to level it, then rolled before and after planting to leave a footprint no deeper than ¼ inch. If you use a no-till drill, seeding depth should be monitored and adjustments made when field conditions change so seed is placed ¼ inch to ½ inch deep in clay or loam soils, or ¾ inch to 1 inch deep in sandy or light soils.

The first 60 days can determine the yield potential for the stand’s entire life.

4) Seed at least 18 lbs./ acre. Alfalfa yield potential is a function of plants per acre.

Because environmental

conditions vary, using at least 18 lbs. of seed per acre will maximize yield potential and reduce the need for replanting.

5) Scout for insects. We suggest you scout at least twice per week with a sweep net and spray immediately when threshold levels are reached. If you see v-shaped leaf burn from potato leafhoppers or defoliation from alfalfa weevils, yield is already lost and plant health is sacrificed.

6) Consider using a fungicide. Spring and early summer growing conditions can be cool and wet. When these conditions are prevalent, a fungicide treatment can help reduce leaf diseases and improve leaf retention, which, in turn, will produce higher yields.

7) Be open to foliar feeding. It’s a smart move to investigate foliar feeding nutrient packages. They may contain important micronutrients that can enhance yield, and be combined with many insecticides for one-pass application. Seed re p re s e n ta t ive s o r c ro p

consultants can help explain what works in any given area.

8) Avoid soil compaction.

Once compaction occurs, yield potential is already diminished.

This is particularly important when traveling in newly established fields. Larger equipment allows for less passes through the field during harvest, but typically adds weight where traffic does occur. Monitoring field conditions before entering the field with equipment will help minimize compaction and crown injury.

While following these management practices won’t guarantee you will get 10-ton alfalfa, they will help put you in a better position to maximize the yield potential of your alfalfa fields.

Prep your fields. Plant the best genetics. Pray for good weather.

And, with a little luck, 10-ton alfalfa yield could well become your reality.

Chad Staudinger Forage Product Manager, Dairyland Seed, a corporate sponsor of PDPW

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PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

What is your financial literacy score?

As you look to improve your operation’s performance, it’s easy to focus on the day-to-day production management activities. The risk of this alone, however, is that you can lose sight of the broader financial management picture, which affects all of your key business decisions and your dairy operation’s ability to thrive in the future.

The following quiz is designed to help you understand the financial management side of your operation.

Behind the metrics The first three questions relate to profitability and your rate of return. Cost of production drives the bottom line and should be a key component of your risk management decisions.

Your operating expense ratio focuses on the cost to generate your income stream. Managing that cost—and understanding the relationship between your day-to-day decisions and your expense ratio—can help you focus on managing cost of production.

ROA is a measure of profitability compared to your investment to produce that profit.

We’ve all seen operations with too many high-priced tractors to turn a profit. Knowing your ROA can help you determine which investments are adding to or detracting from your bottom line.

The next questions relate to your balance sheet and staying power. Leverage is the measure of how much your credit partners (liabilities) have invested in your operation compared to what you have invested (equity).

The larger the number, the more borrowed capital you have in relation to your own investment.

A leverage ratio of 1.6:1 limits your borrowing capacity for future needs. Equity is the shock absorber, and a high leverage ratio indicates that the shock absorber is worn out.

Working capital measures your operation’s ability to manage short-term hits to its profitability and cash flow. That is, how many months can your position cover operating expenses? Shoot for three to five months, if you want to be able to withstand market volatility.

If you’re an individual borrower, another factor you may want to consider is your credit score. Many dairy operations are sole proprietorships, so their credit score has a significant impact on a lender’s credit decisions. Knowing your credit score, what affects it and how to monitor it can mean the difference between getting a preferred or a high-risk loan rate.

Never too late Keeping track of these metrics isn’t just a once-a-year exercise, it’s something that you should be monitoring continually.

The answers to these questions affect decisions such as buying new equipment or taking advantage of expansion opportunities. If you don’t know the answers, you don’t know how these decisions affect your long-term financial picture.

Of course, you should always start with accurate financial See FINANCIAL, on page 29

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

29

Are your cows really eating what you think you are feeding?

A total mixed ration assumes that every bit of feed eaten by the cow has the same exact nutrition. It also assumes that every cow that is supposed to get this ration is eating the same exact ration.

However, this does not usually happen in the real world on a dairy farm.

Typically what we see in the real world are four rations: 1) the ration formulated on paper; 2) the ration that is mixed by the feeder; 3) the ration consumed by the cow; and 4) the ration pushed out as refusal.

Formulating the right diet.

When formulating the diet, we assume that we have all the current information on moisture and ingredient nutrient analysis. While this maybe true for most dry feeds, this is often not the case for wet feeds like silages. Due to sampling error and infrequent sampling of silages, the ration formulated on paper is not the same as the one mixed.

It is good practice to remove all the silage from the face, push and lift the silage into a blended pile, which allows good mixing.

Then take 10 samples from this pile, mix the samples and take a sub-sample that will fit into a

Numerous factors can cause significant variation in the TMR along the bunk, allowing inconsistent nutrition among all the cows within a pen.

quart-sized plastic bag.

The contents in this bag should be analyzed for moisture and nutrients and then this information used in the ration formulation software. Depending on the variability of the silage, this task should be performed several times per week.

See EATING, on page 30

AGRICULTURAL CONCRETE

THE NATION'S LEADER IN AGRICULTURAL CONCRETE THE "TANK BUILDER"

Financial Continued from page 28

records. The phrase “garbage in, garbage out” is particularly appropriate. If your records aren’t accurate, your calculations could end up steering you in the wrong direction.

If your score is low right now, don’t despair. Financial literacy is something you can improve.

Work with your team of advisers to find out the answers.

When you start to know more about your financial position, you’ll find yourself making better business decisions and you’ll be prepared to take advantage of new opportunities.

Bradley Guse Senior Vice President, Agribusiness Banking, BMO Harris Bank, a corporate sponsor of PDPW

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30

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

Cornerstone Dairy Academy™: 2 days, 2 dynamic programs Every career needs a cornerstone, a firm foundation on which you build. If you are in a dairy-related field and either transitioning into management, looking to make a smooth career transition or just beginning your career, the Professional Dairy Producers want to help you succeed.

Conducted the day prior and the first day of the 2015 PDPW Business Conference in Madison, Wis., Cornerstone Dairy Academy™ is a two-day, two-program event on March 17-18 designed to give you the soft skills—foundational characteristics—that can propel your career forward. These soft skills are the very ones employers cite as a top consideration when hiring or promoting employees into leadership positions.

Participants will have their choice of two program options on Day 1:

• “INFLUENTIAL LEADERSHIP: Interact and Influence!”

These interactive sessions will explore the importance of working well with others to solve complex problems in the workplace. Topics will include teamwork skills, communicating with different generations, personality and leadership styles, conflict resolution and business etiquette.

• “VISIONARY LEADERS: Ethics, Leadership and Outlook.”

Participants will discover their leadership traits and identify which character strengths can positively influence others for success in business. Those strengths will be woven with the mega forces and trends of agriculture as presented by leading

agricultural economist Dr. David Kohl. Participants will learn how to be impact players who lead others through a turbulent, changing global economy.

Both tracks culminate with the opportunity to put concepts into practice at the 2015 PDPW Business Conference, March 18.

“The future of the dairy industry depends on its ability to attract, develop and retain qualified people,” says Shelly Mayer, executive director of PDPW. “The combination of technical and soft skills is the foundation for a successful career. With Cornerstone Dairy Academy, PDPW is offering foundational business and leadership training not found anywhere else in the dairy industry.”

Any dairy producer or other professional in the dairy industry, as well as students pursuing

dairy related careers, may apply for this training. Age is not a consideration for selection. Employers are encouraged to urge employees to apply.

Cornerstone Dairy Academy is an application-based program with a limited number accepted into each program. Tuition for Cornerstone Dairy Academy includes lodging, meals, training and admission to Day 1 of the PDPW Business Conference, with a significant percentage of tuition underwritten by Professional Dairy Producers Foundation.

To be considered for Cornerstone Dairy Academy, individuals must apply by Feb. 15. Applicants will be notified of acceptance by Feb. 27. Program details can be found at www.pdpw.org or by calling PDPW at 800947-7379.

Eating Continued from page 29

Mixing the right diet. Mixing the right diet means loading the exact amount of each ingredient into the mixer and then mixing all the ingredients together so every bite eaten by the cow matches what was formulated on paper.

Most feeders do a good job of loading the right amount of ingredients into the mixer, but even the best feeders will have loading errors of 10 to 30 pounds per ingredient on average.

Feeder accuracy can be improved by parking the mixer so it is level and out of the wind.

Another important factor—especially when multiple pens are fed by a single load of feed—is making sure the right amount mixed ration is delivered to each pen.

A survey of TMR sorting by Martel2 showed the following: Ration type

Incidence

Percentage Sorted

Lactating

13/28

46%

Non-lactating 12/16 75% Nine of the 13 sorted lactating rations and all 12 of the sorted non-lactating were rations in which the forage was processed in the mixer wagon and was not processed ahead of time by a hay grinder or processor. If forage is to be processed to the proper length by the mixer wagon, then a routine maintenance schedule is needed to replace blades, kicker plates and augers.

Ten factors that can influence the TMR not matching the formulation are: 1. Worn augers, blades and kicker plates 2. Un-level mixer 3. Poor processing of hay, straw or baleage 4. Loading position on the mixer 5. I n g re d i e n t l o a d i n g

sequence 6. Liquid distribution 7. Load size 8. Auger speed on vertical mixers 9. Forage restrictor settings on vertical mixers 10. Mix time after the last added ingredient Each of these factors can cause significant variation in the

TMR along the bunk, allowing inconsistent nutrition among all the cows within a pen.

The ration the cow consumes. Whether all the cows eat the exact TMR that was delivered to them depends a lot on how well the dry forages are processed.

If the forage is not processed enough and if the TMR is too dry, cows will sort against the long forage particles and eat more of the fine particles contained in the concentrate portion of the TMR. 1Oelberg and Stone. 2014. Monitoring Total Mixed Rations and Feed Delivery Systems. Vet Clin Food Animal.

Pgs. 721-744.

2Martel. 2010. Personal communication.

Tom Oelberg, Ph.D. Dairy Field Technical Specialist, Diamond V, a corporate sponsor of PDPW

PDPW – DAIRY’S BOTTOM LINE • JANUARY 2015

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Hone your dairy financial skills No matter a dairy farm’s size or its production system, the written documents of farm business analyses are the basic tools of decision making.

If you are among the dairy owners who are at the top of their game when it comes to managing milk production, but have not embraced the financial side of your business and typically shy away from analyzing your financial statements, then the Feb. 10 PDPW Dairy Financial Workshop in Wisconsin Dells is for you. Workshop trainers Steve Schwoerer, dairy specialist with Badgerland Financial, and Gary Siporski, a former president and CEO with the Citizens State Bank of Loyal and now part of the Vita Plus Corporation team, will show you how to grow your financial skills and your business.

Co-presenting information tag-team style, Siporski and Schweorer will conduct five important sessions: “Why You Need to Know Your Numbers,” The 5 Most Important Numbers,” “Working with the Numbers,” “Sitting in the Banker’s Chair” and “Action Steps.”

These sessions will: • Help you know and understand essential financial numbers so you can measure your financial strength and make sound management decisions.

• Zero in on key financial ratios that should be monitored on your dairy and explain what these numbers tell you about your operation and how to use these numbers to make management decisions.

• Put your learning to the test as you and your team delve into a financial assessment of a case study farm and get a handle of

Dairy Financial Workshop February 10, 2015

Glacier Canyon Conference Center 45 Hillman Road Wisconsin Dells, Wis. For more information, call PDPW at 800-947-7379.

given gems that can make a difference to their dairy and come to understand the business side of milking cows in terms of their own financial statements, ratios

Steve Schwoerer

Gary Siporski

the financial strength of the operation. You and your team members will address “How would you manage this farm?” and “How would you prepare for a visit to the bank?”‌ • Have you and your team assume the role of a lender and look at your case study from the “other side.” You’ll also see how your feedback compares that from a real-world ag lender.‌ • Devote the final 30 minutes to you applying what you learned to your situation. You have the workshop’s two expert trainers on hand to answer your questions.

Developed by dairy producers for dairy producers, this PDPW workshop starts at 9 a.m. and ends at 4 p.m. During these seven hours, participants will be

and measurements.

PDPW’s Dairy Financial Workshop is an accredited training program with the University of Wisconsin School of Ve t e r i n a r y M e d i c i n e (UW-SVM), and veterinarians may receive up to 6.3 CEUs for the training.

To learn more or to register, please call PDPW at 800-9477379 or visit www.pdpw.org.‌

Twohig Rietbrock Schneider & Halbach “Attorneys for Agriculture”

We are proud to be members of PDPW and Wisconsin’s rural community.

(920) 849-4999

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